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We audited the City of Birmingham, AL’s Community Development Block Grant Disaster Recovery (CDBG-DR) grant.  We selected the City for review based on concerns by the U.S. Department of Housing and Urban Development’s (HUD) Birmingham Office of Community Planning and Development in regard to the City’s administration of its disaster recovery program.  Our audit objectives were to determine whether the City ensured that (1) administrative costs were properly allocated, (2) only eligible projects were selected and only eligible applicants participated in the program, (3) adequate policies and procedures were implemented for program management, (4) funds were spent only for activities that were eligible and supported, (5) it adequately monitored activity and performance, (6) there was no duplication of benefits, and (7) procurement of goods or services was conducted according to applicable requirements. 

The City generally administered its CDBG-DR funds in accordance with HUD requirements.  It ensured that administrative costs were allocated correctly, only eligible projects and applicants participated in the program, funds were spent only for eligible activities that were adequately monitored, there was no duplication of benefits, procurement of goods and services was conducted according to applicable requirements, and all applicable projects were completed under the national objective of being located in a low- and moderate-income area.  However, the City did not conduct internal audits of the CDBG-DR program and did not develop or update, finalize, and implement its policies and procedures for its internal audits and the transition from 24 CFR (Code of Federal Regulation) 85.36 to 2 CFR Part 200 for its procurement contracts. 

We recommend that the Director of the Birmingham Office of Community Planning and Development require the City to (1) develop and implement HUD-approved policies and procedures to ensure that the process for conducting an internal audit complies with HUD regulations; (2) immediately conduct an internal audit; and (3) update, finalize, and implement its procurement policies to comply with 2 CFR Part 200.

Recommendations

Key Details
(mouse over or click items for details)
  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Community Planning and Development

  •   2017-AT-1008-001-A

    Closed on November 02, 2017

    Develop and implement HUD-approved policies and procedures to ensure that the process for conducting an internal audit complies with HUD regulations and the policies and procedures are submitted and certified to HUD.

  •   2017-AT-1008-001-B

    Closed on November 02, 2017

    Immediately conduct an internal audit of the CDBG-DR grant funds.

  •   2017-AT-1008-001-C

    Closed on November 02, 2017

    Update, finalize, and implement its procurement policies to comply with 2 CFR 200.317-326.