U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Hotline

Report Fraud, Waste and Abuse
September 30, 2009
2009-CH-1020
ig0951020.pdf

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the City of Flint’s (City) HOME Investment Partnerships Program (Program). The audit was part of the activities in our fiscal year 2009 annual audit plan. We selected the City based upon our analysis of risk factors relating to Program grantees in Region V’s jurisdiction and a citizen complaint to our office. Our audit objectives were to determine whether the City effectively committed and disbursed Program funds and followed HUD’s requirements.

The City did not effectively commit and disburse Program funds. It inappropriately reported in HUD’s Integrated Disbursement and Information System (System) at least $2.5 million in Program funds as subgrants, did not cancel subgrants in HUD’s System totaling $400,000 in Program funds, did not reduce a subgrant in HUD’s System by nearly $1,000 in Program funds, and could not provide written agreements supporting nearly $141,000 of subgrants in HUD’s System. As a result, the City must commit nearly $870,000 in Program funds for eligible subgrants and/or activities by September 30, 2009.

The City also inappropriately drew down and disbursed more than $1 million in Program funds that were not used for eligible Program costs for more than 15 days after the City drew down the Program funds from its HOME trust fund treasury account (treasury account) and/or HUD’s five-year disbursement deadlines as of July 31, 2007, and June 30, 2008. As a result of the inappropriate draw downs and disbursements, the City avoided not meeting HUD’s five-year disbursement deadlines and losing more than $499,000 in Program funds.

We recommend that the Director of HUD’s Detroit Office of Community Planning and Development reduce the City’s line of credit in its treasury account by nearly $680,000 for the Program funds that the City did not appropriately commit by HUD’s 24-month commitment deadline and drawdown and disburse by HUD’s five-year disbursement deadlines. We also recommend that the Director require the City to cancel incorrect subgrants in HUD’s System totaling more than $1.5 million in Program funds, provide written agreements supporting subgrants or decommit nearly $141,000 of Program funds in HUD’s System, reduce subgrants by more than $30,000 in Program funds, and implement adequate procedures and controls to address the findings cited in this audit report. These procedures and controls should help ensure that Program funds are committed and disbursed in accordance with federal requirements and the City does not lose more than $730,000 in Program funds over the next month.