We audited the U.S. Department of Housing and Urban Development’s (HUD) Office of Community Planning and Development’s (CPD) risk assessment and monitoring of its State Community Development Block Grant (CDBG) recipients. We started this assignment due to significant findings reported on the State of Oklahoma CDBG-Disaster Recovery (CDBG-DR) audit (2016-FW-1010) and HUD’s lack of monitoring the State since fiscal year 2011. Our reporting objective was to determine whether CPD appropriately assessed State CDBG grantees’ risk to the integrity of CPD programs and adequately monitored its grantees.
CPD did not appropriately assess State CDBG grantees’ risk to the integrity of CPD programs or adequately monitor its grantees. This condition occurred because its field office staff did not follow CPD risk assessment and monitoring requirements and field office management responsible for reviewing staff performance did not correct noncompliance of staff performing these responsibilities. In addition, the headquarters desk officer review function was administrative in focus and failed to note noncompliance. As a result, CPD cannot be assured that its field offices correctly identified the high-risk grantees or conducted adequate monitoring to mitigate risk to the integrity of CPD programs.
We recommended that the General Deputy Assistant Secretary for Community Planning and Development (1) develop and implement a review process at the headquarters level to ensure compliance with established policy for risk analysis and monitoring, (2) require referenced supporting documentation be uploaded into its system and implement guidance for field offices to maintain supporting documentation in their official files, (3) develop and implement a policy that requires field offices to rate grantees of at least medium risk that have not been monitored within the last 3 years, and (4) update monitoring exhibits to guide staff to document procedures performed and provide sufficient explanation to verify procedures performed and conclusions drawn.
Recommendations
Community Planning and Development
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Status2017-FW-0001-001-AOpenClosedClosed on June 28, 2018
We recommend that the General Deputy Assistant Secretary for Community Planning and Development develop and implement a quality review process at the headquarters level to ensure consistent compliance with its policy for risk analysis, to include but not be limited to reviewing supporting documentation for conclusions drawn.
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Status2017-FW-0001-001-BOpenClosedClosed on January 14, 2021
We recommend that the General Deputy Assistant Secretary for Community Planning and Development, develop and implement a policy requiring field offices to rate grantees of at least medium risk that have not been monitored in their respective program area within the last 3 years on factors that require assessments of capacity, program complexity, and monitoring findings resulting in repayment or grant reductions.
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Status2017-FW-0001-001-COpenClosedClosed on January 14, 2021
We recommend that the General Deputy Assistant Secretary for Community Planning and Development, develop and implement guidance for field offices to maintain supporting documentation in their official files with an adequate explanation of procedures performed to verify risk scores assigned, which could include upgrading CPD’s systems to allow for the attachment of supporting documentation for risk analyses.
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Status2017-FW-0001-001-DOpenClosed
We recommend that the General Deputy Assistant Secretary for Community Planning and Development, develop and implement a quality control review process at the headquarters level to ensure compliance with monitoring requirements for reports and exhibits, to include but not be limited to explaining procedures performed and adequately explaining and providing supporting documentation for conclusions drawn.
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Status2017-FW-0001-001-EOpenClosedClosed on June 28, 2018
We recommend that the General Deputy Assistant Secretary for Community Planning and Development, require field offices to upload referenced supporting documentation into CPD’s system for findings and concerns developed during the monitoring review.
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Status2017-FW-0001-001-FOpenClosedClosed on January 14, 2021
We recommend that the General Deputy Assistant Secretary for Community Planning and Development, update exhibits to require staff to document procedures performed, provide sufficient explanation to verify procedures performed and conclusions drawn, and reference appropriate supporting documentation.