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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the City of East St. Louis, Illinois’ (City) Community Development Block Grant (Block Grant) program. Our objective was to determine whether the City properly verified the eligibility of Block Grant-funded housing rehabilitation recipients.

We found that the City awarded Block Grant funds to 143 recipients without adequately verifying their eligibility to receive housing rehabilitation assistance. Specifically it did not verify eligibility criteria such as evidence of flood insurance, homeowners insurance, code compliance, and income eligibility.

We recommended that HUD require the City to provide supporting documentation or reimburse its Block Grant program for more than $1.2 million expended on ineligible recipients. Additionally, we recommended that HUD require the City to develop and implement a quality assurance plan to ensure that all program recipients meet program eligibility requirements and provide training to ensure future compliance.