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Hotline

Report Fraud, Waste and Abuse
September 08, 2009
2009-NY-1801
2009-ny-1801.pdf

We conducted a review of the City of Little Falls, New York’s (the City) Small Cities Community Development Block Grant (CDBG), and HOME Programs administered by its Urban Renewal Agency (URA). We selected the City for review based on a hotline complaint that alleges mismanagement of HUD funding for the CDBG and HOME programs administered by the City and its URA. The objectives of the review were to determine the merits of the hotline complaint, specifically whether the City and its URA complied with HUD requirements while administering its CDBG and HOME programs. The review determined that the City and its URA have not complied with HUD requirements while administering its CDBG and HOME programs; thus the allegations in the report have all been substantiated. The City and its URA have begun to address the allegations and are attempting to correct deficiencies that exist within their HUD funded programs. However, the review of the URA’s operations determined that the agency’s books and records could not be relied upon to provide current or accurate data, and are considered not auditable at this time.

We recommend that HUD instruct the State of New York’s Office of Community Renewal and Housing Trust Corporation to (1) coordinate their efforts to conduct a comprehensive monitoring of the City and its URA to ensure that they are adequately administering the City’s HUD-funded Small Cities CDBG grants and HOME program in compliance with applicable HUD and State of New York requirements, (2) fully reconcile the sources and uses of all grant funds for each CDBG and HOME project and cash account that it administers, and develop procedures to ensure that the appropriate cash accounts are used for grant income and expense transactions, (3) account for, reconcile, and report on all program income transactions, (5) develop administrative control procedures to ensure compliance with all HOME program disbursement and reporting requirements, and (6) establish procedures to ensure the proper monitoring and maintenance of CDBG and HOME program activity files.