The City of New York, NY, Could Improve Its Invoice Review Process Before Disbursing Disaster Funds Under Its Public Housing Rehabilitation and Resilience Program

Date Issued: 
Thursday, September 21, 2017
Publication/Report Type: 
Audit Reports
Report Number: 
2017-NY-1012
Program Area(s): 
Community Development Block Grant, Community Planning and Development, Disaster
State: 
New York
Summary: 

We audited the City of New York’s Community Development Block Grant Disaster Recovery-funded Public Housing Rehabilitation and Resilience Program.  Our objective was to determine whether the City had established adequate controls to ensure that it followed U.S. Department of Housing and Urban Development (HUD), Federal, and City requirements when disbursing disaster funds under its program. 

We found that the City generally had established adequate controls over the use of disaster funds and disbursed funds for eligible and supported costs under the program.  However, it did not have adequate policies and procedures to ensure that its staff always obtained and reviewed adequate documentation to verify contractor invoices before disbursing funds to its subrecipient, the New York City Housing Authority.  Specifically, the City did not obtain and review adequate documentation before disbursing $284,844 of the $19.1 million reviewed during the audit.  This condition occurred because the City believed that performing a cursory review of the contractor invoices was sufficient and relied on the Authority to perform a more detailed review of the supporting documentation.  Although the City later obtained documentation from the Authority to show that the funds were used for eligible and supported costs, it could strengthen its invoice review process to ensure that its staff fully complies with HUD and Federal cost principle requirements when reviewing contractor invoices before disbursing funds to the Authority.

We recommend that HUD require the City to provide documentation showing that it has (1) obtained adequate support for contractor invoices related to disaster funds disbursed under the program and (2) strengthened its invoice review process to ensure that costs are eligible and supported before disbursing disaster funds to its subrecipient under the program.

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