We audited the City of Huntington Park’s Community Development Block Grant (CDBG) program. We selected the City based on the high risk assessment score and prior findings identified by the U.S. Department of Housing and Urban Development (HUD). The objective of the audit was to determine whether the City administered its CDBG funds in accordance with HUD requirements, focusing on grant expenditures and procurement.
The City did not administer its program in accordance with HUD requirements. Specifically, it (1) did not meet HUD’s code enforcement requirements, (2) did not follow its own or HUD procurement procedures, (3) did not properly support its cost allocations, and (4) did not ensure that one project met the CDBG national objective. This condition occurred because the City lacked adequate procedures and controls and disregarded HUD requirements and its staff was not always aware of program requirements. Overall, this activity resulted in the City’s spending $7,323 on ineligible costs, not being able to support its use of $813,919, and putting another $328,918 in CDBG funds at risk for similar questionable use.
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the City to (1) repay the program $7,323 from non-Federal funds, (2) support the eligibility of $813,919 in CDBG costs, (3) implement policies and procedures to ensure that $328,918 in CDBG funds is used in accordance with program requirements, and (4) provide training or obtain technical assistance on CDBG program requirements.
Recommendations
Community Planning and Development
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Status2017-LA-1005-001-AOpenClosed$7,323.00Questioned 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 August 18, 2020Repay the program $7,323 from non-Federal funds for ineligible code enforcement costs.
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Status2017-LA-1005-001-BOpenClosed$576,997.00Questioned 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.
Support the $576,997 in code enforcement costs (activities 499, 512, and 531), including meeting code enforcement and cost allocation requirements, or repay the program from non-Federal funds.
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Status2017-LA-1005-001-COpenClosed$328,918.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Implement revised code enforcement program policies and procedures to meet CDBG requirements. This will help ensure that the remaining $328,918 budgeted for code enforcement activity 531 is put to better use.
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Status2017-LA-1005-001-DOpenClosed$110,000.00Questioned 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.
Support the reasonableness of the $110,000 Graffiti Removal program (activities 504 and 520) cost allocations or repay the program from non-Federal funds.
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Status2017-LA-1005-001-EOpenClosed$31,186.00Questioned 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.
Support the $31,186 After School program (activity 501) costs, including the reasonableness of the contract costs and meeting the limited clientele national objective, or repay the program from non-Federal funds.
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Status2017-LA-1005-001-FOpenClosed$95,736.00Questioned 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.
Support the reasonableness of the $95,736 in cost allocations charged as CDBG administrative (activity 522) costs or repay the costs from non-Federal funds.
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Status2017-LA-1005-001-GOpenClosedClosed on August 18, 2020
Implement additional policies and procedures to ensure that salaries and wages and cost allocations are charged in compliance with HUD requirements.
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Status2017-LA-1005-001-HOpenClosedClosed on August 18, 2020
Implement additional procedures and controls to ensure that documentation is obtained to support that the limited clientele national objective was met.
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Status2017-LA-1005-001-IOpenClosedClosed on July 15, 2024
Obtain training or technical assistance on CDBG program requirements.