We audited Luzerne County, PA's administration of its Community Development Block Grant funds that it received under the American Recovery and Reinvestment Act of 2009. We selected the County for an audit because we received a complaint alleging that the County may have misappropriated Block Grant funds and because of our mandate to audit Recovery Act activities. Our audit objective was to determine whether the County obligated, expended, and reported its Block Grant funds provided under the Recovery Act according to the Recovery Act and applicable HUD requirements.
We found that the County generally administered its Block Grant Recovery Act funds in accordance with Recovery Act and applicable HUD requirements. However, a nonprofit subrecipient improperly awarded a contract for street improvements valued at $145,152, and the County did not screen subrecipients to prevent debarred, suspended, or ineligible subrecipients from participating in funded activities. We found no evidence to substantiate misappropriation of Recovery Act funds.
We recommended that HUD require the County to (1) provide documentation to demonstrate that $145,152 expended for street improvement work was fair and reasonable or reimburse its program from non-Federal funds for any amount that it cannot support, (2) provide training to its subrecipients on proper procurement procedures and the use of change orders, and (3) develop and implement controls to screen its subrecipients against the General Services Administration’s Excluded Parties List System.