The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), audited the Kansas City, MO, Health Department’s Lead Safe KC program due to increased media attention on lead-based paint poisoning in the Kansas City area. Further, we had never conducted an audit of the more than $21.6 million in grants received by the Health Department since 1997. Our audit objective was to determine whether the Health Department (1) properly and consistently calculated income for program participants, (2) spent grant funds on items that qualified as lead hazards, (3) properly spent grant funds for relocation of owner-occupants, and (4) properly notified owners in accordance with U.S. Department of Housing and Urban Development requirements.
The Health Department (1) did not consistently and correctly calculate annual income for program participants; (2) sometimes replaced windows that did not qualify as lead hazards; (3) did not determine whether relocation was a hardship for owner-occupants; and (4) did not properly notify property owners of lead-based paint disclosure requirements, timely risk assessment results, clearance reports, and ongoing reporting and maintenance recommendations.
We recommend that the Health Department (1) repay $19,173 spent on ineligible assistance; (2) complete a cost breakdown for the $10,731 spent for a rental property, which included assistance to an ineligible unit; (3) recalculate the annual income for participants assisted with the 2014 lead hazard control grant to support the $1.8 million spent and repay the U.S. Treasury from non-Federal funds for any property found to be ineligible; and (4) provide support showing the $79,738 spent on windows replacement qualified or repay the U.S. Treasury from non-Federal funds.
Recommendations
Lead Hazard Control
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Status2018-KC-1002-001-AOpenClosed$19,473.00Questioned 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 April 13, 2021Repay the U.S. Treasury $19,173 spent on ineligible assistance from non-Federal funds.
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Status2018-KC-1002-001-BOpenClosed$10,731.00Questioned 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 March 23, 2021Complete a cost breakdown to support the $10,731 spent on a rental property, which included assistance to an ineligible unit, and repay the ineligible assistance to the U.S. Treasury from non-Federal funds.
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Status2018-KC-1002-001-COpenClosed$1,803,705.00Questioned 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 April 01, 2021Recalculate annual income for participants assisted with the 2014 lead hazard control grant to support the $1,803,705 spent. For any assistance the Health Department cannot support with complete income calculations, it should repay the U.S. Treasury from non-Federal funds, less any amount repaid as a result of recommendations 1B and 2A.
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Status2018-KC-1002-001-DOpenClosedClosed on November 01, 2019
Develop and implement policies and procedures that clarify the definition of annual income to be used, calculation components, and the documentation required to calculate income.
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Status2018-KC-1002-001-EOpenClosedClosed on November 01, 2019
Develop and implement procedures for quality control reviews to ensure that annual income is properly calculated.
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Status2018-KC-1002-001-FOpenClosedClosed on January 08, 2021
Provide training on HUD’s income requirements to employees responsible for calculating income.
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Status2018-KC-1002-002-AOpenClosed$79,738.00Questioned 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 March 23, 2021Provide support showing the $79,738 spent on window replacement qualified or repay the U.S. Treasury from non-Federal funds.
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Status2018-KC-1002-002-BOpenClosedClosed on November 01, 2019
Develop and implement policies and procedures to ensure that all windows replaced meet lead hazard qualifications.
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Status2018-KC-1002-002-COpenClosedClosed on November 01, 2019
Develop and implement quality control procedures to ensure that all bid specifications are reviewed for qualified items based on the risk assessment results.
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Status2018-KC-1002-003-AOpenClosedClosed on November 01, 2019
Update the Health Department’s work plan to include policies and procedures for defining, determining, and documenting relocation hardship for all participants.
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Status2018-KC-1002-004-AOpenClosedClosed on November 01, 2019
Develop and implement policies and procedures to ensure that the property owners receive the required information concerning lead-based paint disclosure requirements, risk assessment results, summaries of treatments and clearances, and ongoing maintenance activities, including how to report paint deterioration.