We audited the U.S. Department of Housing and Urban Development’s (HUD) monitoring of grantee compliance with the Community Development Block Grant (CDBG) timeliness spending requirement. The objectives of the audit were to determine whether HUD’s guidance for ensuring compliance with the CDBG entitlement spending requirement had been implemented effectively by the field offices; specifically, whether HUD needs to implement additional program guidance to ensure a standardized process by which grantees are monitored by their field offices.
HUD’s guidance for ensuring compliance with the CDBG timeliness spending requirement was not always implemented effectively by local HUD offices. In addition, HUD officials did not adequately document their rationale for not sanctioning untimely grantees. As a result, more than $8.3 million in CDBG funds that could have been reduced from the subsequent years funding of ten untimely grantees was not.
We recommend that the Deputy Assistant Secretary for Grant Programs (1) strengthen controls over procedures relating to the HUD Entitlement Communities Division monthly timeliness report, (2) strengthen CDBG timeliness spending grantee notification procedures to ensure that the notification of new untimely grantees becomes a higher priority, (3) establish procedures requiring documentation of its rationale for not sanctioning grantees not complying with the CDBG timeliness spending requirement, and (4) establish procedures pertaining to grantees that minimally do not comply with the timeliness spending requirement.