We audited the New York State Community Development Block Grant Disaster Recovery (CDBG-DR) assistance-funded New York State Tourism and Marketing program based on the amount of funds drawn down to date and weaknesses identified in prior Office of Inspector General audits. State officials allocated $30 million in CDBG-DR funds to the Tourism and Marketing program, of which $22.4 million had been obligated and disbursed as of September 30, 2015. The objective of the audit was to determine whether State officials established and maintained financial and administrative controls to ensure efficient and effective program administration.
State officials did not always establish and maintain financial and administrative controls to ensure efficient and effective program administration. Specifically, cost estimates were not always obtained for procurements so there was a lack of assurance that almost $22 million in CDBG-DR funds allocated and disbursed for the Tourism and Marketing program were for reasonable and necessary costs. In addition, State officials did not ensure subrecipient budgets were complete so that they could effectively monitor program progress and hold subrecipients accountable. We attribute these conditions to State officials not placing sufficient emphasis on ensuring compliance with all procurement requirements and not knowing how the entire CDBG-DR funds would be spent for the Tourism and Marketing program.
We recommend that HUD direct State officials to (1) provide documentation showing that approximately $22 million disbursed for contracts complies with applicable procurement requirements and repay any amounts determined to be unsupported from non-Federal funds and (2) include complete budgets in written agreements with subrecipients to ensure that CDBG-DR funds are used for their intended purposes.