We audited the Jefferson Parish Community Development Department in response to a citizen complaint and in accordance with our annual audit plan to review the U.S. Department of Housing and Urban Development’s (HUD) community planning and development programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships programs. Our objective was to determine whether the Parish (1) ensured that payments to contractors were supported, reasonable, and necessary and (2) properly monitored and ensured completion of the contractors’ work in accordance with contract and HUD requirements for its CDBG- and HOME-funded property rehabilitation program.
The complaint had merit. The Parish did not always administer its rehabilitation program in accordance with program requirements. Specifically, it did not always ensure that payments to contractors were eligible, supported, and reasonable as it made payments (1) for duplicate payments and overpayments, (2) for work not completed and excessive material costs, (3) without adequate invoice documentation or cost analyses for change orders, (4) without performing independent cost estimates before the bidding process, and (5) for properties not brought up to code. In addition, the Parish did not properly monitor and ensure completion of its contractors’ work. This occurred because the Parish did not have adequate written policies and procedures, lacked adequate staffing levels, and its staff members were not always aware of their responsibilities. As a result, the Parish could not provide reasonable assurance to HUD that its program met its purpose or that it followed HUD and other requirements, putting more than $216,000 in allocated HOME funds at risk of mismanagement. In addition, the Parish paid more than $1 million in questioned costs, and left homeowners in unsafe and unsanitary living conditions.
We recommend that HUD require the Parish to (1) develop and implement written procedures and take actions to ensure that it better spends more than $216,000, (2) repay $9,489, (3) support or repay more than $1 million, (4) develop and implement written procedures and management controls, and (5) correct the deficiencies identified during the onsite inspections and in the remaining homes.
Recommendations
Community Planning and Development
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Status2018-FW-1001-001-AOpenClosed$216,663.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on July 20, 2020We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to develop and implement a HUD-approved written plan and procedures and take actions that will correct and prevent the deficiencies noted in the finding, improve program administration effectiveness, strengthen the control environment, ensure compliance with HUD regulations and its own policies and procedures, and ensure that it has the continuing capacity to carry out its HOME program activities as required. Implementing this recommendation should ensure that the $216,663 in HOME funding allocated for the Parish’s property rehabilitation program is better used.
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Status2018-FW-1001-001-BOpenClosed$9,849.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on February 08, 2022We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to Repay its program from non-Federal funds for $9,849 in payments made to contractors for duplicate payments and overpayments.
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Status2018-FW-1001-001-COpenClosed$1,020,121.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on June 03, 2022We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to support or repay its program from non-Federal funds $1,020,121 for payments made (1) for work that the contractor(s) did not perform and excessive material costs; (2) that lacked adequate supporting documentation for change orders, independent cost estimates, and invoice documentation; or (3) for the 10 HOME-funded rehabilitated homes not brought up to code.
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Status2018-FW-1001-001-DOpenClosedClosed on May 10, 2019
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to establish and implement desk and onsite monitoring policies and procedures to ensure that documentation is maintained to support that (1) adequate supporting documentation for payments is filed, tracked, and maintained; (2) the necessity for all change orders is verified and reasonableness of the costs is assessed; (3) cost estimates are completed before the bidding process; (4) work is completed before pay requests are approved and payments are made to the contractor; and (5) contractors are properly monitored throughout the rehabilitation process, including progress and final inspections.
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Status2018-FW-1001-001-EOpenClosedClosed on August 04, 2023
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to correct the property deficiencies identified during the onsite inspections related to the 20 contracts as applicable.
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Status2018-FW-1001-001-FOpenClosedClosed on August 04, 2023
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to inspect the remaining 33 homes for compliance with the contract specifications and HUD requirements and correct deficiencies as applicable.
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Status2018-FW-1001-001-GOpenClosedClosed on May 13, 2019
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to establish and implement complaint policies and procedures and ensure that its staff is aware of the procedures to ensure that participant complaints are properly handled in a timely manner.
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Status2018-FW-1001-001-HOpenClosedClosed on May 14, 2019
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to review and adjust staffing levels as needed to ensure adequate coverage.
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Status2018-FW-1001-001-IOpenClosedClosed on May 14, 2019
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the Parish to provide training to staff members to ensure that they are aware of policies and procedures and their responsibilities related to expenditures, monitoring, and addressing participant complaints.