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Report Fraud, Waste and Abuse
June 07, 2013
2013-CH-1002
2013-CH-1002.pdf

We audited the City of Toledo’s Community Development Block Grant-funded Code Violation Abatement Program as part of the activities in our fiscal year 2013 annual audit plan.  We selected the City’s Program 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 objectives were to determine whether the City complied with Federal regulations and its own policies in its use of Block Grant funds for Program projects.

The City did not ensure that Federal regulations and its own policies were followed in the administration of the Program.  Specifically, the City did not ensure that the Toledo Municipal Court (1) conducted independent cost estimates and obtained sufficient price quotes for housing rehabilitation services and (2) completed work specifications that sufficiently detailed the services for Program projects.  It also did not ensure that (1) contractors properly performed or provided services, (2) the cost of services was reasonable, (3) HUD’s regulations regarding lead-based paint were followed, and (4) households were income eligible.

As a result, the City used more than $73,000 in Block Grant funds for 23 projects for which the housing rehabilitation services were either improperly performed or not provided or the cost of the services was not reasonable.  Further, the Court did not maintain sufficient documentation to support the use of nearly $24,000 in Block Grant funds for services associated with 10 projects.  Additionally, the City provided nearly $9,000 in Block Grant funds to assist two households that were not income eligible.

We recommend that the Director of HUD’s Columbus Office of Community Planning and Development require the City to (1) ensure that housing rehabilitation services cited in this audit report are properly completed or reimburse its Block Grant program nearly $73,000, (2) provide sufficient supporting documentation or reimburse its Block Grant program nearly $24,000, (3) reimburse its Block Grant program more that $9,000, and (4) implement adequate procedures and controls to address the findings cited in this audit report.