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We audited the Community Development Block Grant Disaster Recovery (CDBG-DR) assistance grant provided to the City of Springfield, MA, by the U.S. Department of Housing and Urban Development (HUD) to assist in disaster recovery and rebuilding efforts resulting from damages caused by presidentially declared disasters.  The audit objective was to determine whether the City properly followed Federal procurement requirements and whether payments to vendors were adequately supported. 

A review of approximately $8.3 million, representing 60 percent of the $13.9 million in CDBG-DR funds obligated, found that the funds were budgeted for eligible and HUD-approved activities.  However, City officials did not ensure that more than $1.9 million met Federal procurement requirements or payments to vendors were adequately supported.  Further, the City did not always document the duplication of benefits in accordance with requirements. 

We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to (1) provide evidence showing that more than $1.4 million was spent for supported, necessary and reasonable costs or repay HUD from non-Federal funds; (2) obtain support for $472,246 or reprogram funds to other allowable activities; and (3) strengthen and follow procurement policies and financial and administrative controls to ensure compliance with Federal requirements.