We audited the City of Albuquerque’s Community Development Block Grant (CDBG) program based on our risk analysis and as part of the Office of Inspector General’s annual audit plan to review community planning and development funds. The audit objective was to determine whether the City administered its CDBG program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.
The City did not always properly administer and adequately document its CDBG program activities in accordance with HUD requirements. Specifically, it did not always follow procurement and conflict-of-interest requirements and did not ensure that executed written agreements included the required language. It did not comply with environmental reviews of its projects as the environmental records were not completed correctly and lacked supporting documentation. In addition, it did not ensure that expenditures were reasonable, eligible, and adequately supported as it exceeded allowed residential rehabilitation limits, did not reconcile its timesheet activities, and failed to follow Federal travel regulations. Further, it did not maintain documentation supporting that its projects met a national objective and did not adequately monitor or report on its subrecipients’ results. These conditions occurred because the City did not have the capacity to implement an effective grant administration program. As a result, it incurred grant costs of more than $2.9 million that were ineligible or unsupported and decreased the effectiveness of the CDBG program.
We recommend that the Director of the Albuquerque Office of Community Planning and Development extend the City of Albuquerque’s high risk grantee designation until the City can show that it has implemented an effective program in compliance with all requirements and has repaid the $1.83 million in ineligible costs and supported $1.06 million in unsupported costs identified in this report.