We audited the Harris County Community Services Department’s Community Development Block Grant (CDBG) program based on our risk analysis and as part of our annual audit plan to review community planning and development funds. The audit objective was to determine whether the Department properly administered and adequately documented its CDBG program activities in accordance with U.S. Department of Housing and Urban Development (HUD) regulations and spent CDBG funds for eligible activities.
In general, the Department properly administered and adequately documented its CDBG program activities in accordance with HUD regulations and spent CDBG funds for eligible activities. However, there were instances of noncompliance with procurement regulations and inadequate subrecipient oversight. Specifically, the Department did not (1) include required procurement language in its contracts, (2) include required eligibility restrictions in its subrecipient agreements, and (3) update its prequalified list of contractors. These conditions occurred because the Department was unaware of some requirements, believed other requirements were unnecessary, and was satisfied with its list of contractors. The Department agreed to correct the deficiencies as we identified them
We recommend that the Director of the Houston Office of Community Planning and Development require the Department to confirm that it has implemented procedures to ensure that its future contracts and subrecipient agreements address the procurement and eligibility issues identified in this report.