The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Adams County, Colorado’s Community Development Block Grant (Block Grant) program to determine whether Adams County’s Community and Economic Opportunity Department (Department) had adequate controls over the administration of its Block Grant funds.

The Department did not have adequate controls over its Block Grant funds. Specifically, it did not (1) have written policies and procedures for the administration of its Block Grant funds, (2) monitor the use of its Block Grant funds, (3) maintain documentation showing that its activities met national objectives, (4) compare disbursement requests to existing contracts to ensure that Block Grant funds were spent in accordance with the contract, and (5) have a process in place to eliminate known conflicts of interest.
As a result, Adams County spent more than $1.2 million on ineligible Block Grant activities, awarded $307,912 in Block Grant funds without amending its written agreements with the subrecipients, and did not ensure that more than $1.6 million in Block Grant activities met a national objective.

We recommend that HUD ensure that Adams County reimburses its Block Grant funds from nonfederal funds for any ineligible Block Grant expenditures, provides supporting documentation showing that the Block Grant funds met a national objective, implements an acceptable internal control structure by preparing and implementing effective policies and procedures, and receives technical assistance from HUD to ensure compliance.