We audited the Office of the Commissioner for Municipal Affairs’ (OCMA) Puerto Rico State Community Development Block Grant (CDBG) Section 108 Loan Guarantee program as part of our strategic plan, based on concerns regarding the slow progress of the Vieques sports complex project. The objective of this audit was to determine whether OCMA used Section 108 loan proceeds on a project that met a national objective of the CDBG program and fully provided the intended benefits.
OCMA did not ensure that the Municipality completed a Section 108 Loan Guarantee project to construct a sports complex. The project was abandoned and not completed, materials and equipment acquired for its construction were unaccounted for, and the intended benefit was not realized. These deficiencies occurred because no corrective action plan was implemented and the completion of the sports complex was not feasible. As a result, program objectives were not met, preventing low- and moderate-income persons from receiving the intended benefits. HUD also lacked assurance of the allowability of more than $10.8 million in State CDBG funds invested in the unfinished project.
We recommend that HUD require OCMA to (1) submit a plan for the sports complex project within 30 days, without proposing the use of additional HUD funds to implement it, (2) support the eligibility of more than $10.8 million spent for the sports complex, (3) ensure that the Municipality maintains adequate documentation related to the Vieques sports complex project, (4) submit supporting documentation showing the eligibility and propriety of $37,215 drawn from HUD, and (5) correct any inaccurate information in HUD’s information system related to the sports complex.
Recommendations
Community Planning and Development
-
Status2014-AT-1801-001-BOpenClosed$10,838,880.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Provide all supporting documentation associated with the $10,838,880 (Footnote 13) Total disbursements of $10,876,095 were adjusted to consider $37,215 questioned in recommendation 1D. in State CDBG, Section 108, and program income proceeds disbursed for the development of the sports complex, if HUD determines the plan to be feasible (recommendation 1A). HUD must determine the eligibility, reasonableness, and allocability of the funds disbursed. OCMA must reimburse its State CDBG program from non-Federal funds any amount determined ineligible.
-
Status2014-AT-1801-001-DOpenClosed$37,215.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Submit supporting documentation showing the eligibility and propriety of $37,215 drawn from HUD or reimburse the State CDBG program from non-Federal funds.