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HUD OIG reviewed the City of Chattanooga’s (City) Neighborhood Stabilization Program (program). We selected the City for review based on its low percentage of obligations and the approaching September 6, 2010, deadline for obligating funds. Our objective was to determine whether the City administered its program in accordance with U.S. Department of Housing and Urban Development (HUD) rules and regulations.

The City generally administered its program in accordance with HUD’s rules and regulations. However, it was sometimes inconsistent in identifying obligations and was not always accurate in its reporting to HUD.

OIG recommends that the Director of the Knoxville Office of Community Planning and Development continue to monitor the City’s progress in obligating its program funds to ensure that it meets the September 6, 2010, deadline. OIG also recommends that the City be required to develop and implement improved internal controls for tracking obligations and reporting.