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We audited the City of Erie, PA’s Community Development Block Grant program because we received a complaint regarding its code enforcement program and we had not audited the City’s program since 1997.  The complaint alleged that the City targeted low- to middle-income residents in certain neighborhoods requiring expensive repairs to their homes and properties, which could result in legal actions and liens if the homeowners did not make repairs by a deadline, generally 30 days.  Our audit objective was to determine whether the City properly used its Block Grant funds for its code enforcement and community policing activities in accordance with U.S. Department of Housing and Urban Development (HUD) and Federal requirements. 

The City did not always properly use its Block Grant funds for code enforcement and community policing activities according to HUD and Federal requirements.  The complaint was correct in that the City conducted code enforcement inspections in areas where most residents were low- and moderate-income.  Block Grant funds are intended to benefit these residents.  However, the City did not maintain documentation to (1) show that it complied with program eligibility requirements, and (2) support expenses.  These conditions occurred because the City lacked policies and procedures for its Block Grant-funded code enforcement and community policing activities and misunderstood HUD requirements.  As a result, the City’s use of nearly $1.7 million in program funds was unsupported.

We recommend that the Director of HUD’s Pittsburgh Office of Community Planning and Development require the City to (1) provide documentation to support $671,838 in code enforcement costs or repay the program from non-Federal funds for any amount it cannot support, (2) provide documentation to support $1 million in community policing costs or repay the program from non-Federal funds for any amount it cannot support, and (3) develop and implement policies and procedures to ensure that its code enforcement and community policing activities costs comply with applicable program requirements, thereby ensuring that program funds totaling $597,801 can be put to better use.