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We audited the Office of the Commissioner for Municipal Affairs’ (OCMA) Puerto Rico State Community Development Block Grant program.  We selected OCMA for review based on concerns regarding the slow progress of the Municipality of San Sebastian’s fine arts center.  The objective of this audit was to determine whether OCMA effectively used State Block Grant funds on a fine arts center that met a national objective of the program and fully provided the intended benefits.

OCMA did not ensure that State Block Grant funds used for the construction of San Sebastian’s fine arts center project provided the intended benefits and met a national objective of the program.  These deficiencies occurred because OCMA did not properly monitor the use of State Block Grant funds for the arts center to ensure that the activity met program objectives.  As a result, more than $1 million in State Block Grant funds were not effectively used to meet program objectives.

We recommend that HUD (1) reevaluate the feasibility of the project to determine the eligibility of the $1,014,211 in State Block Grant funds disbursed, and (2) instruct the Office for the Socioeconomic and Community Development to submit a plan for how it will proceed with the fine arts center project.