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The City of Atlanta (City) received a $12.3 million Neighborhood Stabilization Program (NSP) grant from HUD that was authorized under Title III of the Housing and Economic Recovery Act. Also, the City applied for an additional $57.9 million in NSP funds under the American Recovery and Reinvestment Act of 2009. We selected the City for review due to the amount of its NSP funding and because of performance concerns identified during our previous audit of the City’s HOME Investment Partnerships Program (HOME). Our objective was to determine whether the City has the capacity to effectively and efficiently administer its NSP.

The City has developed the organizational structure needed to administer its NSP and has hired a sufficient number of qualified staff to implement the program. However, the City needs to expedite actions to meet the program’s 18-month obligation deadline due to delays in executing implementation contracts and obligating funds, past performance problems that still require attention, procurement inconsistencies, and a lack of procedures for some components of its NSP.

We recommend that the Director of HUD’s Atlanta Office of Community Planning and Development require the City to (1) expedite the implementation of the remaining $10.9 million approved for NSP activities to prevent further delays that may prevent its ability to timely obligate funds, (2) expedite execution of implementation contracts with developers or subrecipients, (3) review and verify the accuracy of evaluator scores for leveraged funds and fund commitments for all contractors and determine whether further action is needed, (4) amend executed contracts to include leveraged funds if the contractor(s) competed for funding based on the City’s leveraging requirement, proposed to provide leveraged funds, and the City evaluated the contractor(s) proposal against other contractors, giving consideration to proposed leveraging (5) develop and implement procedures for land banking and (6) implement procedures for entering and monitoring obligations in HUD’s reporting system, demolition, and tracking program income in HUD’s reporting system.