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Report Fraud, Waste and Abuse
April 07, 2011
2011-NY-1801
ig1121801.pdf

As part of our audit of the East Orange Revitalization and Development Corporation (Corporation), we reviewed the City of East Orange’s (City) compliance with the HOME Investment Partnerships Program (HOME) in regard to the eligibility of an awarded capacity building grant and developer fees awarded to the Corporation. This review raised issues in regard to the City’s compliance with HOME program requirements, Federal regulations, and HOME grant agreements.

The City did not always comply with HOME program requirements, Federal regulations, and HOME grant agreements. Specifically, City officials authorized the Corporation to use HOME program funds for (1) an ineligible capacity building grant, and (2) developer fees in excess of limits imposed by a HOME grant agreement between the City and the Corporation.

We recommended that the Director of the New Jersey Office of Community Planning and Development instruct the City to (1) reimburse the HOME program’s line of credit $185,038 from non-Federal funds for the disbursed portion of the capacity building grant that should not have been awarded to the Corporation, (2) reprogram $14,962 associated with the undisbursed portion of the capacity building grant to other eligible HOME program activities, (3) reimburse the HOME program’s line of credit $94,827 from non-Federal funds for the disbursed portion of the excessive developer fees., (4) reprogram $36,758 associated with the undisbursed portion of the excessive developer fees, and (5) establish and implement procedures to ensure that City officials comply with HOME program requirements, Federal regulations, and contractual agreements.