We audited the City of Chicago’s Department of Public Health’s (Department) Lead Hazard Reduction Demonstration Grant Program based on our analysis of the U.S. Department of Housing and Urban Development’s (HUD) Office of Lead Hazard Control and Healthy Homes grantees in Region 5’s jurisdiction. Our audit objective was to determine whether the Department administered the Program in accordance with HUD’s and its own requirements.
The Department did not administer the Program in accordance with HUD’s and its own requirements. Specifically, it did not (1) properly procure its subcontractor, (2) make appropriate reimbursements to the subcontractor for Program activities, (3) ensure that income was properly calculated for households residing in assisted units, (4) ensure that landlords gave preference in renting assisted units to targeted families, (5) properly document its lead inspection results to support that Program activities were necessary, (6) ensure that Program funds were adequately protected, and (7) ensure that it accurately report the number of assisted units to HUD. As a result, the Department lacked support that more than $512,000 in Program funds was used in accordance with HUD’s requirements and did not have more than $122,000 in Program funds available for eligible activities. In addition, HUD and the Department lacked assurance that more than $386,000 in Program funds was protected and available for program use.
We recommend that the Director of HUD’s Office of Lead Hazard Control and Healthy Homes require the Department to support that the contract for grant administration services was cost reasonable or reimburse the program, reimburse its programs for duplicate reimbursements and for four units that had been sold within 3 years, support the eligibility of households residing in assisted units and that landlords gave preference in renting units or reimburse the program, and implement adequate procedures and controls to address the findings cited in this audit report.