We audited the City of Camden, NJ’s administration of its Community Development Block Grant program. We conducted the audit because the City was authorized $6.6 million in Block Grant funds for fiscal years 2013 through 2015 and we had not audited its program since 1996. Our audit objective was to determine whether the City ensured that its program activities met national objectives and complied with applicable U.S. Department of Housing and Urban Development (HUD) procurement and environmental review requirements.
The City did not ensure that its activities always complied with national objective, procurement, and environmental review requirements. Of 10 activities reviewed, 7 did not comply with requirements. One activity did not meet a national objective, and the related costs were incurred and paid after the subrecipient agreement had expired. For this and six other activities, the City did not (1) prepare independent cost estimates before making purchases, prepare cost analyses before modifying the contracts, or show evidence of competition; and (2) conduct environmental reviews or properly document that projects were exempt from environmental review requirements. As a result, the City made ineligible disbursements totaling $317,803, and it could not show that disbursements totaling $2.8 million complied with applicable requirements. The City began taking corrective actions at the end of the audit and began providing some documentation to resolve the deficiencies regarding environmental reviews. HUD needs to assess the documentation to determine whether it was adequate to show that projects were exempt from environmental review requirements.
We recommend that HUD require the City to (1) repay its program $317,803 for the disbursements made after the subrecipient agreement expired; (2) provide documentation for the six activities that did not comply with procurement requirements to show that costs paid for products and services were fair and reasonable or repay its program from non-Federal funds any amount that it cannot support; and (3) provide documentation for seven activities, with draws totaling $2.8 million, to show that either it conducted an environmental review or the activity was exempt from an environmental review or repay its program from non-Federal funds any amount that it cannot support.