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We conducted a review of the State of Mississippi (State), a $5.5 billion Community Development Block Grant (CDBG) disaster recovery grantee. We initiated the audit as part of the Office of Inspector General (OIG) Gulf Coast Region’s audit plan and examination of relief efforts provided by the Federal Government in the aftermath of Hurricanes Katrina and Rita. Our objective was to determine whether the State ensured that contracts were procured in accordance with its and other applicable policies and procedures under its disaster recovery program (program).

Although the State generally ensured that contracts were procured in accordance with its program policies and procedures, it paid program funds to one contractor that exceeded the contract maximums. This condition occurred because the State did not always ensure that it followed its invoicing verification policies and procedures.

We recommend that the Director of the U.S. Department of Housing and Urban Development’s (HUD) Disaster Recovery and Special Issues Division require the State to support or repay its program $21,964 in unsupported costs and ensure that its staff is knowledgeable of its invoice verification policies and procedures.