We audited the Jefferson Parish Community Development Department in response to a citizen complaint and in accordance with our annual audit plan to review the U.S. Department of Housing and Urban Development’s (HUD) community planning and development programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships programs.  Our objective was to determine whether the Parish (1) ensured that payments to contractors were supported, reasonable, and necessary and (2) properly monitored and ensured completion of the contractors’ work in accordance with contract and HUD requirements for its CDBG- and HOME-funded property rehabilitation program.
                                        
The complaint had merit.  The Parish did not always administer its rehabilitation program in accordance with program requirements.  Specifically, it did not always ensure that payments to contractors were eligible, supported, and reasonable as it made payments (1) for duplicate payments and overpayments, (2) for work not completed and excessive material costs, (3) without adequate invoice documentation or cost analyses for change orders, (4) without performing independent cost estimates before the bidding process, and (5) for properties not brought up to code.  In addition, the Parish did not properly monitor and ensure completion of its contractors’ work.  This occurred because the Parish did not have adequate written policies and procedures, lacked adequate staffing levels, and its staff members were not always aware of their responsibilities.  As a result, the Parish could not provide reasonable assurance to HUD that its program met its purpose or that it followed HUD and other requirements, putting more than $216,000 in allocated HOME funds at risk of mismanagement.  In addition, the Parish paid more than $1 million in questioned costs, and left homeowners in unsafe and unsanitary living conditions.

We recommend that HUD require the Parish to (1) develop and implement written procedures and take actions to ensure that it better spends more than $216,000, (2) repay $9,489, (3) support or repay more than $1 million, (4) develop and implement written procedures and management controls, and (5) correct the deficiencies identified during the onsite inspections and in the remaining homes.

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