We audited the Community Development Block Grant (CDBG) program administered by the City of Durham, North Carolina (City). The objective of the audit was to determine whether the City administered its program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We selected the City for review based on HUD's risk assessment and previous monitoring reviews.
The City did not administer its CDBG program in accordance with all of HUD's requirements. Specifically, the City was deficient in (1) documenting national objectives, (2) monitoring, (3) procuring services, (4) reporting program income, and (5) preparing accurate consolidated annual performance and evaluation reports. These deficiencies occurred because the City lacked effective management controls over its CDBG program activities to ensure compliance with all applicable HUD requirements. As a result, it had no assurance that more than $1.3 million in CDBG funds met HUD requirements.
We recommend that the Director of the Greensboro Office of Community Planning and Development require the City to establish and implement effective written procedures for documenting compliance with HUD's requirements for (1) national objectives and monitoring, (2) procurement, (3) program income, and (4) preparing performance reports. We also recommend that HUD require the City to record unreported program income in HUD's Integrated Disbursements and Information System (system), expend the funds on eligible CDBG activities, and repay the interest earned on unreported program income. In addition, we recommend that HUD require the City to provide adequate supporting documentation to show that CDBG funds disbursed were awarded to the lowest responsive and responsible bidder, met one of the three national objectives, and were properly monitored.