The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the City of Spokane, WA’s Lead-Based Paint Hazard Control program funded by the American Recovery and Reinvestment Act to determine whether the City complied with procurement, matching, and reporting requirements when executing its grant. This audit was part of the mandate to monitor grant activities funded by the Recovery Act. We selected the City because it received the largest Lead Hazard Control grant in the HUD’s Region 10 (Alaska, Idaho, Oregon, and Washington) that had not already been audited by our office.
The City failed to ensure cost reasonableness for four Lead Hazard Control contracts. In addition, the City did not maintain adequate records of its matching contributions, nor did it accurately report the final total expenditure amount, the number of jobs created, and the amount of its vendor payments in FederalReporting.gov. We recommend that HUD require the City to (1) conduct cost analyses for the four contracts totaling more than $1.1 million and reimburse any unsupported amount, (2) support $426,130 in eligible matching funds or return almost $1.4 million in grant funds, (3) make the necessary changes to the reported final total expenditure and final vendor payments figures, and (4) obtain training on HUD’s procurement and matching requirements.