The City did not (1) maintain procurement documents for acquisition and rehabilitation services and consultant services to show fair and open competition at a reasonable price, (2) always disburse program expenses in compliance with its own procedures and HUD regulations, and (3) submit the required reports to HUD on time and post HUD quarterly performance reports on its website. These issues occurred because the City did not implement its procurement controls. In addition, the City experienced high staff turnover, which did not allow it to administer these programs in compliance with HUD regulations. As a result, the City did not give vendors the opportunity to bid in fair and open competition for the services needed in the targeted areas. Also, the City disbursed a total of $272,206 in questioned program expenses. In addition, the City’s late submission of required reports to HUD and lack of posting performance reports on its website prevented HUD, the general public, government entities, and other stakeholders from knowing the progress of its program-funded projects and activities.
We recommend that HUD require the City to (1) implement procurement controls to maintain complete procurement documents, (2) provide adequate documents to support $270,656 in program expenses, and (3) submit future required reports to HUD on time and post the missing and future HUD quarterly performance reports on its website.
Recommendations
Community Planning and Development
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Status2021-LA-1001-001-AOpenClosed
Implement its procurement controls to ensure that it is able to locate and maintain the complete procurement documents for at least 3 years after the closeout of NSP1 and NSP3 in compliance with its own procedures and HUD regulations.
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Status2021-LA-1001-002-AOpenClosed$270,656.00Questioned 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 the required documents to support $161,131 in NSP1 and $109,525 in NSP3 funds for expenses for acquisition, rehabilitation, and administration. If the City cannot provide the required documents, it should repay the U.S. Treasury from non-Federal funds.
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Status2021-LA-1001-002-BOpenClosed$1,550.00Questioned 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.
Repay the U.S. Treasury from non-Federal funds for the $1,550 overpaid to acquire a foreclosed NSP3 property.
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Status2021-LA-1001-002-COpenClosed
Obtain technical assistance from HUD to ensure that it is able to manage the programs and comply with program regulations before processing future expenses related to NSP1 and NSP3 projects and activities.
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Status2021-LA-1001-003-AOpenClosed
Follow its NSP procedures and HUD regulations to complete and submit its future NSP1 and NSP3 HUD quarterly performance reports and annual single audit reports within the required timeframes until the closeout of the respective programs or until HUD is assured that these reports are consistently submitted on time.
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Status2021-LA-1001-003-BOpenClosed
Follow its own procedures and HUD regulations to post the missing 21 NSP1 and 22 NSP3 HUD quarterly performance reports, as of June 30, 2019, on its official website; and, post the future NSP1 and NSP3 HUD quarterly performance reports on its website until the closeout of the respective programs or until HUD is assured that these reports are consistently posted on its website.
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Status2021-LA-1001-003-COpenClosed
Obtain technical assistance from HUD to ensure that the City is able to submit its quarterly performance reports and annual single audit reports on time and post the performance reports on its website to comply with program regulations.