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In accordance with our goal to review Housing and Economic Recovery Act of 2008 grantees and because of weaknesses identified by the U.S. Department of Housing and Urban Development (HUD), the Office of the Inspector General (OIG) initiated a review of the City of San Antonio’s activities funded by its Neighborhood Stabilization Program 1 grant. The objective was to determine whether the City administered its grant in accordance with program requirements.

The City did not administer its program in accordance with program monitoring, cost eligibility, and affordability requirements. This condition occurred because the City did not understand the program rules. As a result, it could not support more than $1.1 million in program expenditures, including more than $1 million that it used to acquire, renovate, and resell residential properties without the required affordability provisions and $124,555 for unsupported residential renovation reimbursements. The City also paid more than $2.5 million for renovation contracts that it could not show were competitively procured or reasonably priced.

The HUD San Antonio Office of Community Planning and Development began a monitoring review of the City’s program activities shortly after we began our review. We worked closely with the San Antonio office and discussed issues identified in both reviews. During our field work, the San Antonio office began working with the City to initiate corrective actions to address the identified deficiencies. Accordingly, our report does not contain any recommendations.