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HUD OIG audited the Neighborhood Stabilization Program (NSP) administered by the City of Miami Gardens, Florida (City). Our objective was to determine whether the City administered its program in accordance with applicable U.S. Department of Housing and Urban Development (HUD) requirements. Specifically, we wanted to determine whether (1) expenditures were allowable and (2) activities met the program’s national objectives.

The City met the national objective when it sold the eight program properties reviewed to qualified low-, moderate-, and middle-income persons. However, it did not adequately support salary expenditures allocated to the program. This condition occurred because the City did not have effective controls in place to ensure that salary allocations were properly documented. Without supporting documentation to substantiate that the salary allocations related to actual services performed by personnel, there was no assurance that the salary expenditures were accurate and program related. As a result, $426,852 allocated to the program for salaries was unsupported.

OIG recommended that the Director of the Miami Office of Community Planning and Development require the City to (1) provide supporting documentation or reimburse its program $426,852 for unsupported salary expenditures from non-Federal funds; (2) develop and implement a salary allocation method that complies with 2 CFR (Code of Federal Regulations ) Part 225; and (3) develop, implement, and enforce written procedures for salary allocation among program and other Federal and non-Federal programs to include documentation requirements for its employees.