We audited the State of Oklahoma because it received $93.7 million in Community Development Block Grant Disaster Recovery (CDBG-DR) allocations for presidentially declared disasters that occurred in 2011, 2012, and 2013. The substantial amount of CDBG-DR funding required a review of the State’s program. Our objective was to determine whether the State obligated and spent its grant in accordance with requirements.
The State did not obligate and spend CDBG-DR funds in accordance with requirements. The State failed to support how it determined activity eligibility, existence, disaster event qualification, reasonableness of cost estimates, prioritization, and fund allocation as required. It routinely did not determine compliance with procurement and environmental requirements. Further, it routinely made payments based on incomplete, insufficient, or no supporting documentation. The State believed that its procedures for obligating and spending Federal funds were its choice based upon its understanding of CDBG requirements. The State’s failure to comply with requirements resulted in unsupported obligations and expenditures of more than $11.7 million and $4.3 million, respectively.
We recommended that the Acting Deputy Assistant Secretary for Grant Programs require the State to (1) develop and implement policies and procedures to document and perform detailed review and testing to establish eligibility, existence, disaster event qualifications, reasonableness of cost estimates, prioritization, and fund allocation, both retroactively and prospectively, which would put $81.9 million to better use; (2) support or properly obligate more than $11.7 million in unsupported obligations; and (3) support or repay more than $4.3 million in unsupported expenditures.