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Report Fraud, Waste and Abuse
April 07, 2011
2011-NY-1009
ig1121009.pdf

We audited the East Orange Revitalization and Development Corporation (Corporation). We selected the Corporation based on a request for an audit from the Newark U.S. Department of Housing and Urban Development (HUD) Office of Community Planning and Development. The objective of the review was to determine whether the Corporation complied with HOME Investment Partnerships Program (HOME) requirements and Federal regulations.

Corporation officials did not always comply with HOME program requirements and applicable Federal regulations. Specifically, they (1) did not repay the City of East Orange’s (City) HOME program $37,712 in principal and accumulated interest for an overdue predevelopment loan, and (2) expended $737,437 in HOME grants without maintaining adequate and complete documents to ensure its compliance with HOME program requirements and applicable Federal regulations.

We recommended that the Director of HUD’s New Jersey Office of Community Planning and Development instruct the City to (1) direct the Corporation to repay to the City’s HOME program a total of $37,712 in principal and accumulated interest for an overdue predevelopment loan, (2) direct the Corporation to provide documents to support its compliance with HOME program requirements and applicable Federal regulations or reimburse the City’s HOME program $737,437, (3) obtain and review documents associated with the Corporation’s qualifications to determine whether it is qualified to be designated as a community housing development organization, and (4) direct the Corporation to establish and implement internal controls that will ensure compliance with HOME program requirements and applicable Federal regulations.