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We audited Gloucester Township, NJ's administration of its Community Development Block Grant funds that it received under the American Recovery and Reinvestment Act of 2009. We selected the Township for an audit because we received two complaints alleging that it misused stimulus funds and overpaid for services and because of our mandate to audit Recovery Act activities. Our audit objective was to determine whether the Township obligated, expended, and reported its Block Grant funds provided under the Recovery Act according to the Recovery Act and applicable HUD requirements.

We found that the Township did not always administer its Block Grant Recovery Act funds in accordance with the Recovery Act and applicable HUD requirements. It did not (1) always maintain documentation to demonstrate that it competitively awarded contracts, (2) create contracts for sewer reconstruction work, (3) execute a subrecipient agreement and monitor the subrecipient, (4) ensure that contractors complied with the Davis-Bacon Act, and (5) accurately report information on the Federal reporting Web site. We found no evidence to substantiate the alleged misuse of Recovery Act funds. The overpayment for services alleged in the complaint was related to snow removal costs. The Township did not use Recovery Act funds to pay for these costs.

We recommend that HUD require the Township to (1) provide documentation to demonstrate that $28,850 expended on a sewer reconstruction project was fair and reasonable or reimburse its program from non-Federal funds for any amount that it cannot support, (2) obtain and review the contractor’s weekly payrolls related to its expenditures for the activities identified in the audit to ensure that contractors paid employees prevailing wages according to the Davis-Bacon Act, (3) develop and implement controls to ensure that it complies with all applicable procurement requirements, (4) develop and implement controls to ensure that it creates subrecipient agreements when needed and monitors its subrecipients, (5) develop and implement controls to ensure that contractors comply with Davis-Bacon Act requirements, and (6) report accurate job creation information for the reporting period ending March 31, 2012.