We audited the City of Huntington Park’s Community Development Block Grant (CDBG) program. We selected the City based on the high risk assessment score and prior findings identified by the U.S. Department of Housing and Urban Development (HUD). The objective of the audit was to determine whether the City administered its CDBG funds in accordance with HUD requirements, focusing on grant expenditures and procurement.
The City did not administer its program in accordance with HUD requirements. Specifically, it (1) did not meet HUD’s code enforcement requirements, (2) did not follow its own or HUD procurement procedures, (3) did not properly support its cost allocations, and (4) did not ensure that one project met the CDBG national objective. This condition occurred because the City lacked adequate procedures and controls and disregarded HUD requirements and its staff was not always aware of program requirements. Overall, this activity resulted in the City’s spending $7,323 on ineligible costs, not being able to support its use of $813,919, and putting another $328,918 in CDBG funds at risk for similar questionable use.
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the City to (1) repay the program $7,323 from non-Federal funds, (2) support the eligibility of $813,919 in CDBG costs, (3) implement policies and procedures to ensure that $328,918 in CDBG funds is used in accordance with program requirements, and (4) provide training or obtain technical assistance on CDBG program requirements.