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We audited HUD’s Office of Native American Programs’ (ONAP) Indian Community Development Block Grant (ICDBG) program grant closeout process based on data received from Southwest ONAP and additional analysis that raised concerns regarding ONAP’s oversight of the grant closeout process.  Our objective was to determine whether ONAP had adequate controls to ensure the timely closeout of program grants.

HUD’s ONAP did not have adequate controls over the ICDBG closeout process.  Specifically, ONAP lacked written policies and procedures for management’s oversight to ensure that closeout data were accurately tracked and grants were closed in a timely manner.  This condition occurred because ONAP did not focus on grant closeouts as a priority and did not design sufficient oversight procedures to consistently monitor grant closeout eligibility.  As a result, ONAP did not always initiate timely follow-up action to determine grant closeout eligibility, and management lacked sufficient tracking data to efficiently monitor grant closeouts. 

We reviewed a sample of 58 grants awarded during the audit period from 2007 through 2012 and found that ONAP did not take timely follow-up action to address indications of closeout eligibility for 18 grants totaling $13.1 million.  At the time of our audit, four of these grants totaling nearly $4 million were eligible for closeout yet remained open without timely follow-up action to pursue grant closeout.  Further, ONAP’s PTD reported erroneous data related to grant closeouts for 24 of the 58 sample grants totaling $14.8 million.

We recommend that HUD (1) develop and implement policies and procedures for management’s oversight of the ICDBG closeout process, resulting in nearly $4 million in funds being put to better use; (2) review the PTD and identify and correct inaccurate or missing data; and (3) consider enhancing the PTD  to track the current status of ONAP follow-up actions for grants that appear to be overdue for closeout.