The U.S. Department of Housing and Urban Development (HUD) awarded the Miami-Dade NSP Consortium more than $89.3 million in Neighborhood Stabilization Program (NSP) 2 funds. We audited two of the consortium members, Neighborhood Housing Services of South Florida, the lead member, and the Urban League of Greater Miami, in accordance with our annual audit plan. The audit objective was to determine whether the two members used NSP2 funds for eligible activities in compliance with HUD requirements and whether the use of the funds was sufficiently supported.
Neighborhood Housing Services did not ensure that some NSP2 funds were used for an eligible purpose and properly supported. Specifically, it drew down $59,523 in NSP2 funds to reimburse payments on a loan used to acquire a piece of land before the NSP2 grant was executed and for a cost item that was not an NSP2-funded activity. In addition, it lacked documentation to justify payroll costs or that purchases of materials and supplies were made. This condition occurred because Neighborhood Housing Services was not aware that HUD did not allow NSP2 funds to be used to retroactively pay for acquisition costs. It also did not adequately manage its resources to ensure that sufficient documentation was maintained. As a result, it charged $59,523 in unallowable costs and $228,037 in insufficiently supported costs to NSP2. Our review of select transactions and events administered by the Urban League disclosed no reportable conditions.
We recommend that the Director of the Miami HUD Office of Community Planning and Development require Neighborhood Housing Services to (1) reimburse NSP2 $59,523 for ineligible disbursements from non-Federal funds; (2) provide documentation to support that $224,868 in NSP2 funds drawn down from four vouchers was eligible or repay the program from non-Federal funds; and (3) provide documentation to support that the differences resulting from the payroll costs for three vouchers, which netted $3,169, were offset in later drawdown vouchers or repay the program from non-Federal funds.
Recommendations
Community Planning and Development
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Status2017-AT-1004-001-AOpenClosed$119,046.00Questioned 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 September 19, 2023Reimburse NSP2 from non-Federal funds for the $59,523 in ineligible disbursements on the five vouchers.
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Status2017-AT-1004-001-BOpenClosed$449,736.00Questioned 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 September 19, 2023Provide documentation to support that the $224,868 in NSP2 funds drawn down from the four vouchers was eligible or repay the program from non-Federal funds.
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Status2017-AT-1004-001-COpenClosed$6,338.00Questioned 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 May 18, 2023Provide documentation to support that the differences resulting from the payroll costs for the three vouchers, which netted $3,169, were offset in later drawdown vouchers or repay the program from non-Federal funds.
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Status2017-AT-1004-001-DOpenClosedClosed on March 29, 2024
Review all administration drawdown vouchers and provide documentation to support that the drawdowns for estimated payroll costs are reconciled with the actual payroll costs for the pay periods. Any calculated overpayment by NSP should be returned to the program to meet program purposes.