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We audited the State of Mississippi's (State) administration of the $5.058 billion in Community Development Block Grant (CDBG) disaster recovery funds provided to the State in the aftermath of Hurricane Katrina. The State allocated $2.2 billion to help homeowners in southern Mississippi recover from Hurricane Katrina. During our audit on grant eligibility, we identified a few possible duplicate payments when reviewing the State's disbursement database. Therefore, we expanded our review to address these potential duplicates.

We believe that the State's controls were generally functioning properly. However, of 5,928 grants disbursed, the State may have funded 34 (less than 1 percent) duplicate grants. Testing on six grants showed that three were eligible; two were ineligible; and one was unsupported. Based on the grants identified as ineligible and unsupported, it is possible that the State may have funded duplicate grants. We believe that only half of the remaining grants related to duplicate addresses and duplicate Social Security numbers were possible duplicates, since one may have been eligible.

We recommended that HUD require the State to coordinate with HUD to recover $128,267 for ineligible grants; support or recover $53,604 for the unsupported grant; and review the remaining grants, of which $1,695,935 is unsupported, and recover any funds for grants that are deemed ineligible.