The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General conducted a review of the City of Augusta, GA’s (City) Neighborhood Stabilization Program (NSP1) to determine whether the City had demonstrated the capacity to properly obligate all NSP1 grant funds and at least 25 percent of the grant toward occupants with incomes below 50 percent of the median income in the locality (LH25) set-aside by the September 5, 2010, statutory deadline. We reviewed 100 percent of the City’s obligations toward its $2.4 million NSP1 grant and performed detailed testing of the procurements for its obligations toward the LH25.
The City demonstrated the capacity to properly obligate its entire $2.4 million NSP1 grant by the September 5, 2010, statutory deadline. This capacity was evidenced by the City’s substantial progress in committing its grant funds during our review.
However, we identified two concerns regarding internal controls and entering obligations before contracts were fully executed.
1.) The City did not have internal controls in place to perform continuous and routine monitoring of its obligation process to ensure that its obligations were processed as intended and were valid.
2.) The City entered its NSP1 obligations into the Disaster Recovery Grant Reporting database in June 2010 for its LH25 set-aside activities. At that time, the obligations were not valid because the contracts for those obligations had not been signed by all parties.
Overall, the City’s actions taken or planned regarding the issues indicated its willingness to make necessary improvements.