We audited the City of Albany, NY’s administration of its supplemental Community Development Block Grant program funded under the American Recovery and Reinvestment Act of 2009 (CDBG-R). The objectives were to determine whether the City administered its CDBG-R program effectively, efficiently, and economically in accordance with applicable rules and regulations, including the Recovery Act, and other U.S. Department of Housing and Urban Development (HUD) requirements.

City officials did not always administer the CDBG-R program effectively, efficiently, and economically in accordance with applicable rules and regulations, including the Recovery Act, and other HUD requirements. Specifically, contrary to program regulations, City officials did not ensure that contract and procurement regulations were followed; activities met a national objective of the program; job creation was adequately tracked and documented; “buy American” provisions of the Recovery Act were adequately monitored; and costs were necessary, reasonable, and adequately supported. In addition, officials made a double payment for electrical work related to a rehabilitation activity and made a payment for a former City employee’s unused vacation time, which was accrued before the award of the CDBG-R grant.

We recommend that the Director of HUD’s Buffalo Office of Community Planning and Development instruct City officials to (1) repay from non-Federal funds the ineligible costs of $5,291 and (2) submit documentation to justify the unsupported costs of $740,682 so that HUD can make an eligibility determination. HUD should require the City to repay any costs determined to be ineligible from non-Federal funds and establish controls to ensure compliance with program requirements.