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We initiated a review of the City of Los Angeles’ Community Development Block Grant (CDBG) program due to concerns that CDBG-funded assets may be at risk.  We performed our review to address questionable costs identified during a prior Office of Inspector General review (audit report 2014-LA-0001).  Our objective was to determine whether the City maintained the required documentation for its CDBG-funded projects to support its vested interest and ensure that national program objectives were met.

We recommend that the Director of the HUD Los Angeles Office of Community Planning and Development require the City to (1) provide and implement a plan of action to show use and progress of the projects in question, (2) review its CDBG-funded projects in its portfolio that were managed by its former redevelopment agency to ensure that all required executed agreements are in place with the relevant parties, and (3) review its CDBG-funded projects in its portfolio that were managed by its former redevelopment agency to ensure that all projects meet national objective.

The City did not always maintain the required documentation for its CDBG-funded projects to support its vested interest and ensure that national program objectives were met.  More than $1.9 million in CDBG funds was at risk of not being used to meet the specified national program objectives.  These funds may be lost due to the City not ensuring that  developers completed  projects to meet  national program objectives.