In accordance with our goal to review American Recovery and Reinvestment Act of 2009 funds, we reviewed the City of New Orleans’ Homelessness Prevention and Rapid Re-Housing Program. Our objective was to determine whether the City had adequate financial and programmatic controls to meet Program requirements.
The City did not have adequate financial and programmatic controls over its Program to ensure that it expended and reported funds in accordance with requirements. Specifically, the City (1) paid Program costs with administrative funds, (2) exceeded its administrative budget, (3) charged costs incurred for its other grant programs to the Program, (4) did not always ensure that its subgrantee supported participant eligibility determinations, (5) did not ensure that its subgrantee properly tracked and recorded participant data in HMIS, (6) did not ensure that its subgrantee maintained approved budget revisions or amended its contracts to ensure that it did not exceed contract costs, and (7) did not ensure that its or its subgrantee’s financial records reconciled to the expenditures in IDIS. These conditions occurred because the City (1) did not adequately maintain and track its budget to ensure that it made payments from the correct cost category and within budgeted amounts, (2) circumvented controls to pay expenditures from incorrect cost categories, (3) had no written policy to process expenditures until 2 months after the Program ended, and (4) did not provide always adequate oversight to its subgrantee. As a result, the City incurred $134,770 in ineligible and $159,987 in unsupported costs. It also allowed $28,430 in data entry errors in the HMIS and potentially paid $465,506 in duplicate financial assistance. Thus, the City could not provide reasonable assurance that it had access to accurate information about the use of Recovery Act funds.
We recommend that the Director of the U. S. Department of Housing and Urban Development’s (HUD) New Orleans Office of Community Planning and Development require the City to (1) repay $134,770; (2) support or repay more than $159,000; (3) review the remaining $192,681 charged to the administrative cost category for eligibility; (4) correct $28,430 in data entry errors in the homeless management information system (HMIS); (5) review potential duplicate assistance shown in its HMIS, correct the data as warranted, and repay any duplicate amounts, thereby putting $465,506 to better use; and (6) require the City to reconcile its financial records to its subgrantee and the Integrated Disbursement and Information System (IDIS).