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We audited the City of Toledo’s Community Development Block Grant funded under the American Recovery and Reinvestment Act of 2009 as part of the activities in our fiscal year 2013 annual audit plan.  We selected the City’s Block Grant based upon recent media attention regarding the City’s programs, a request by the Honorable Marcy Kaptur, and a referral from the Office of Inspector General’s Office of Investigation.  Our objective was to determine whether the City effectively administered its grant in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.

The City did not ensure that Federal regulations and its own policies were followed in the administration of its Recovery Act Block Grant funds.  Specifically, it did not always ensure that assisted households were income eligible.  As a result, HUD and the City lacked assurance that Recovery Act Block Grant funds were used for eligible households.

Further, the City did not always (1) obtain price quotes from at least three contractors and (2) ensure that it paid reasonable prices for its roof and exterior repair projects.  As a result, HUD lacked assurance that the City’s procurements were conducted in a manner that provided full and open competition, and HUD and the City lacked assurance that Recovery Act Block Grant funds were used appropriately.

We recommend that the Director of HUD’s Columbus Office of Community Planning and Development require the City to (1) support or reimburse more than $74,000 to HUD from non-Federal funds for transmission to the U.S. Treasury for the inappropriately assisted households or unreasonable or excessive costs for roof and exterior repairs and (2) develop and implement adequate procedures and controls to address the findings cited in this audit report.

ARRA