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We completed a review of the Community Development Programs Center of Nevada’s (Center) Neighborhood Stabilization Program (program). We performed the review because of the OIG’s mandate to provide oversight of Housing and Economic Recovery Act of 2008 (HERA) programs. We selected the Center because it received more than $4.9 million in program funds from Clark County and the City of Henderson. In addition, the Center has an agreement with the City of North Las Vegas to rehabilitate homes for resale and rental. Our objective was to determine whether the Center efficiently and effectively administered grant funds in compliance with HERA and other applicable program requirements, to include determining whether there were adequate controls and procedures in place to administer the program and program expenditures were eligible. We found that the Center did not always efficiently and effectively administer grant funds in compliance with HERA and other applicable program requirements. Specifically, it violated HUD requirements and its developer agreement with the City of North Las Vegas when it entered into a conflict-of-interest contract with a company that is 50 percent owned by the Center’s executive director. In addition, the Center was unable to support rehabilitation costs for two projects and did not check the debarred status of subcontractors.

We recommend that HUD require the grantee to ensure that the Center (1) stops awarding contracts to the general contractor that is 50 percent owned by its executive director unless granted a conflict-of-interest waiver, as permitted in 24 CFR 570.611; (2) provides documentation to support $10,831 in rehabilitation costs billed to the City of North Las Vegas or submits a new request for payment that reflects only the supported costs; (3) updates its policies and procedures to ensure that future rehabilitation costs are properly supported and procured in a cost-effective manner; and (4) follows its recently developed procedures to check the debarred status of all subcontractors.