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Report Fraud, Waste and Abuse
December 25, 2007
  • Community Planning and Development
2008-AT-1003
2008-1003.pdf

We reviewed the City of Jacksonville/County of Duval, Florida's (City) Community Development Block Grant program (CDBG). We conducted the review as part of the U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General's annual audit plan. Our objectives were to determine whether the City complied with CDBG regulations and requirements related to (a) use of competition when purchasing goods and services, (b) eligibility of public facilities/improvements costs, (c) financial management systems, (d) charging direct and indirect costs, (e) eligibility of housing rehabilitation participants, and (f) contracting with and monitoring of subrecipients.

The review did not identify reportable conditions for most of the cited objectives. However, the City needs to improve controls to ensure proper justification for sole source procurements and that subrecipients only use program funds for specific City-approved activities. We identified subrecipients that did not properly document or justify sole source procurements totaling $156,000 for four purchases. We also identified one instance in which the City reimbursed a subrecipient $34,552 for costs that were not for the activity component the City approved. These conditions occurred because the City did not adequately review the subrecipients' use of sole source procurements and because it did not adequately review a subrecipient's request for payment. As a result, the City could not adequately support the reasonableness of $156,000 in CDBG disbursements and the $34,552 paid for costs not associated with the City-approved activity.

We recommend that the Director of HUD's Office of Community Planning and Development require the City to establish and implement controls to ensure compliance with requirements for sole source purchases and that subrecipients are only reimbursed for costs incurred for activities approved in their funding request. The City should be required to reimburse the program for any portion of the $190,552 that it cannot support as being reasonable and having been incurred for the City-approved activity. Any reimbursements should be made from nonfederal funds.