We audited the County of Riverside’s Community Development Block Grant program due to the delayed expenditure of funds for fiscal year 2014 and previous audit findings regarding policies and procedures. The Office of Inspector General had conducted a review of the County and identified issues with its program-specific policies and procedures, which were addressed (audit report number 2010-LA-1004). Our objective was to determine whether the County administered its program in accordance with U.S. Department of Housing and Urban Development (HUD) rules and requirements.
The County did not always administer its program in accordance with HUD rules and requirements. It incurred $761,744 in program expenses without supporting that these expenses met program eligibility requirements. This condition occurred because the County did not always follow its own policies and procedures in managing its program funds and source documentation to ensure compliance with HUD rules and requirements. As a result, it spent $761,744 in program funds on unsupported costs and placed its projects at risk of not meeting HUD’s national objectives for the program. After we completed our fieldwork, the County provided additional documentation to support $717,439 of the questioned program expenses. However, it was not able to provide documentation for the remaining $44,305 in questioned costs.
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the County to (1) support the $44,305 in questioned costs and (2) fully implement its program internal policies and procedures to comply with HUD rules and requirements.