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Document

We completed a review of the City of New York, Mayor’s Office of Housing Recovery Operations’ administration of the Build it Back Single Family Program, funded with Community Development Block Grant Disaster Recovery (CDBG-DR) funds provided by the U.S. Department of Housing and Urban Development (HUD) to assist in the disaster recovery and rebuilding efforts resulting from Hurricane Sandy.  The objective of the audit was to determine whether City officials had adequate controls to ensure that the use of CDBG-DR funds was consistent with the Build it Back Single Family Program guidelines established under the HUD-approved action plan.

Our review determined that City officials implemented policies that did not always ensure that CDBG-DR funds were disbursed in accordance with the action plan and Federal requirements.  Specifically the policies implemented did not ensure that all eligible homeowners were reimbursed in accordance with the action plan and the Program and CDBG-DR-assisted homes complied with HUD’s Lead Safe Housing Rule requirements.  In addition, City officials did not maintain complete and accurate Program files and records.  These deficiencies resulted from City officials’ decision to provide additional CDBG-DR assistance to homeowners with Small Business Administration (SBA) loans and reduce operational costs.  Further, City officials believed that the Program would meet HUD’s Lead Safe Housing Rule requirements after reimbursement and wished to avoid recapturing grants from homeowners who did not allow the Program to complete the lead hazard work.  Additionally, City officials did not establish adequate monitoring controls to ensure that revised record-keeping procedures were consistently followed.  As a result, they could not assure HUD that the use of CDBG-DR funds benefited eligible homeowners in a fair and equitable manner, assisted homes were lead safe, and Program records were properly maintained.

We recommend that HUD instruct City officials to (1) submit an amended action plan for approval to ensure that it agrees with the City’s policies regarding the use of $4.5 million and planned use of $1.3 million in additional CDBG-DR assistance to homeowners with SBA loans and $32,107 in assistance above the Program’s 60 percent reimbursement rate, (2) reimburse $101,398 in additional grants owed to 11 homeowners, and (3) provide documentation to support that more than $1 million in CDBG-DR funds was disbursed for lead-safe homes.

Recommendation Status Date Issued Summary
2017-NY-1001-001-B Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to execute new grant agreements to show material changes in grant amounts resulting from duplication of benefits recalculations.
2017-NY-1001-001-C Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to repay the Program from non-Federal funds $32,107 in overpaid grants to homeowners whose grant amounts (1) were not revised to show recalculated duplication of benefits and (2) exceeded the Program’s 60 percent reimbursement rate.
2017-NY-1001-001-D Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to reimburse $101,398 in additional grants owed to the 11 homeowners whose grant amounts should have been materially increased as a result of recalculated duplication of benefits.
2017-NY-1001-002-B Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs coordinate with the Office of Healthy Homes and Lead Hazard Control to provide technical assistance and instruct City officials to document the negative lead test results in CMS for one home and the removal of identified lead hazards and lead clearance reports for four homes, thus ensuring that $182,660 in CDBG-DR assistance was disbursed for lead-safe homes. If the negative test results are not documented, City officials should repay the $182,660 from non-Federal funds.
2017-NY-1001-002-C Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs coordinate with the Office of Healthy Homes and Lead Hazard Control to provide technical assistance and instruct City officials to provide supporting documentation that lead-based paint testing was performed, identified hazards were removed, and clearance was achieved for the 41 properties for which homeowners received $833,199 in CDBG-DR assistance. If supporting documentation is not provided, City officials should repay the $833,199 from non-Federal funds.
2017-NY-1001-002-D Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs coordinate with the Office of Healthy Homes and Lead Hazard Control to provide technical assistance and instruct City officials to advise homeowners of their obligation under the terms of the reimbursement grant agreement to allow the Program to perform lead-based paint testing or hazard removal. Homeowners who refuse to allow the Program to complete lead hazard work or provide evidence that the property achieved clearance must repay the grant.
2017-NY-1001-002-E Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs coordinate with the Office of Healthy Homes and Lead Hazard Control to provide technical assistance and instruct City officials to reconcile the discrepancy in the lead test results. If it is determined that the home tested positive for a lead-based paint hazard, City officials should provide supporting documentation showing that the hazard has been removed and the home has achieved clearance, thus ensuring that $29,019 in CDBG-DR assistance was disbursed for a lead-safe home. If the lead test results are not reconciled and the lead safety of the home is not documented, City officials should repay the $29,019 from non-Federal funds.
2017-NY-1001-003-A Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to complete the planned document and data cleanup process in CMS before file closeout to ensure that duplicative documents are archived, the most recent documents are identified and filed in the appropriate subfolders, and all files are auditable and comply with the requirements and the City’s record-keeping procedures.
2017-NY-1001-003-B Abierta Noviembre 02, 2016 We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to ensure that all financial reports are accurate and agree with supporting documentation in the Program files.