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September 25, 2015
  • Community Planning and Development
2015-PH-1005
2015-PH-1005.pdf

We audited the State of Maryland’s Community Development Block Grant Disaster Recovery-funded Housing Recovery program.  We conducted the audit because the program was the largest funded program in the State’s first action plan.  Our objectives were to determine whether the State (1) assisted eligible applicants, (2) avoided duplicating assistance, (3) incurred eligible expenses that were properly supported, (4) procured services and products properly, and (5) constructed homes properly, in accordance with applicable U.S. Department of Housing and Urban Development (HUD) and Federal requirements.

The State could not show that replacement homes were designed and constructed to increase energy efficiency and minimize their environmental footprint as required.  Specifically, the State’s subgrantee could not show that it constructed replacement homes that complied with the Green Building Standard.  This condition occurred because the subgrantee lacked procedures to ensure that replacement homes complied with the Green Building Standard.  Also, the State lacked procedures to monitor its subgrantee’s compliance with the Standard.  As a result, HUD had no assurance that $1.9 million in program funds paid to the subgrantee and $293,000 in program funds not yet paid to the subgrantee was spent to design and construct 13 replacement homes in a manner that increased energy efficiency and minimized their environmental footprint.  The subgrantee (1) assisted eligible applicants, (2) avoided duplicating assistance, (3) incurred eligible expenses that were properly supported, and (4) procured services and products properly.

We recommend that HUD require the State to (1) provide documentation to show that the 13 homes, with related program costs totaling $1.9 million, meet the Green Building Standard or repay HUD for any amount that it cannot support and (2) continue to develop and implement procedures to ensure that future replacement homes comply with the Standard, thereby ensuring that $293,000 in program funds not yet paid to the subgrantee is put to better use.