We audited the City of Detroit’s Housing and Revitalization Department’s Lead Hazard Reduction Demonstration Grant Program based on our analysis of the U.S. Department of Housing and Urban Development’s (HUD) Office of Lead Hazard Control and Healthy Homes’ grantees in Region 5’s jurisdiction.[1] Our audit objective was to determine whether the Department administered the Program in accordance with HUD’s requirements.
The Department did not administer the Program in accordance with HUD’s requirements. Specifically, it did not (1) maintain documentation to support that healthy homes assessment and data collection services were cost reasonable, (2) ensure that landlords gave preference in renting vacant assisted units to targeted families, (3) maintain adequate lead inspection documentation to support that lead-based paint hazard control activities were necessary, (4) obtain HUD approval before spending healthy homes supplemental funds in excess of $5,000 per unit, and (5) calculate annual income correctly for one assisted household. As a result, the Department and HUD lacked assurance that more than $616,000 in Program funds was used in accordance with HUD’s requirements.
We recommend that the Director of HUD’s Office of Lead Hazard Control and Healthy Homes require the Department to (1) support that the contract for healthy homes assessment and data collection services was cost reasonable, (2) support that landlords gave preference in renting vacant assisted units to targeted families, (3) support that lead-based paint hazard control activities were necessary, (4) coordinate with HUD to determine whether healthy homes supplemental funds used in excess of $5,000 per unit were used for eligible activities, and (5) implement adequate procedures and controls to address the findings cited in this audit report.
Recommendations
Lead Hazard Control
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Status2020-CH-1001-001-AOpenClosed$361,850.00Questioned 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.
Closed on February 15, 2022Support that healthy homes assessment and data collection services were cost reasonable or reimburse its Program $361,850 from non-Federal funds.
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Status2020-CH-1001-001-BOpenClosed$112,917.00Questioned 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.
Closed on February 03, 2022Support that landlords gave preference in renting eight vacant units to families with children under 6 years of age or reimburse its Program $112,917 from non-Federal funds for the lead-based paint hazard control activities completed at these assisted units.
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Status2020-CH-1001-001-COpenClosed$70,266.00Questioned 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.
Closed on March 03, 2022Support that lead-based paint hazard control activities were necessary at 19 assisted units or reimburse its Program $70,266 from non-Federal funds for the unsupported lead-based paint hazard control activities completed at these assisted units
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Status2020-CH-1001-001-DOpenClosed$51,930.00Questioned 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.
Closed on February 15, 2022Coordinate with HUD’s Office of Lead Hazard Control and Healthy Homes to determine whether $51,930 in healthy homes supplemental funds used for four units in excess of $5,000 per unit was for eligible activities. If the activities are deemed ineligible, the Department should reimburse its Program the appropriate amount from non-Federal funds.
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Status2020-CH-1001-001-EOpenClosed$19,500.00Questioned 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.
Closed on February 15, 2022Support that one household residing in an assisted unit was income eligible or reimburse its Program $19,500 from non-Federal funds for the lead-based paint hazard control activities completed in the assisted unit.
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Status2020-CH-1001-001-FOpenClosedClosed on September 30, 2020
Implement adequate procedures and controls to ensure that (1) documentation is maintained to support that contracted services are cost reasonable, (2) landlords give preference in renting assisted vacant units to families with children under 6 years of age, (3) lead inspection documentation properly supports lead-based paint hazard control activities, (4) HUD approval is obtained when more than $5,000 per unit in healthy homes supplemental funds is budgeted to assist units, and (5) its staff is fully knowledgeable of the Program requirements.