We audited the City of Norfolk’s Community Development Block Grant program based on our annual audit plan and a risk analysis, which indicated that the City had the most open activities in Virginia. Our objective was to determine whether the City justified its program activities by ensuring that they were properly supported by adequate documentation and met national objectives as required.
The City could not provide adequate documentation to justify nearly $2.5 of about $4 million it spent on 12 of 16 sample activities reviewed. In addition, 14 of the 16 activities were required to meet a national program objective; however, the City could not demonstrate that the activities met or would meet their designated objectives. Of the 14 activities, 10, associated with about $4.1 million in program fund draws, were more than 10 years old. Further, the City was unable to provide documentation within a reasonable timeframe to support about $5 million it had drawn for 15 additional activities in our audit sample. These problems occurred because the City demonstrated poor record keeping and inadequate planning related to its program activities. As a result, many activities reviewed were extensively delayed, and the City could not demonstrate during the audit that it used significant program funds it drew to meet designated program objectives, such as benefiting low- and moderate-income persons and eliminating slums or blight.
We recommended that the U. S. Department of Housing and Urban Development require the City to (1) provide documentation or evidence to justify unsupported program costs or repay the costs to its program from non-Federal funds, (2) provide a plan to complete extensively delayed program activities, (3) implement policies to improve its record keeping and ensure that program funds are fully supported by adequate documentation, and (4) implement effective planning policies to ensure that program activities are not subjected to long delays.