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We performed an audit of HUD's Office of Healthy Homes and Lead Hazard Control (OHHLHC) grant program for Lead Hazard Reduction Demonstration (LHRD). Our audit was initiated based on a complaint to the hotline alleging that the managers of OHHLHC changed the scores assigned by the application review panel to award grants to applicants that were not ranked high enough to receive funding under the 2009 NOFA. Our objective was to determine whether (1) OHHLHC awarded grants in accordance with the selection criteria specified in the fiscal year 2009 notice and (2) the allegation in the complaint had merit. We found no intent to change scores in order to fund certain applicants thus the allegation could not be substantiated. The scores were changed to correct errors in the waiver matching requirement percentage during the threshold review. We also found five LHRD applicants that incorrectly receive two bonus points because they were not in designated empowerment zones.

We recommend that HUD’s OHHLHC Director ensure that (1) the Programs Division Director verifies the accuracy of the threshold reviews before sending the applications to the application review panel, (2) the quality control reviews are completed and documented before submitting the application review panel report for approval, and (3) the review panel members do not perform quality control reviews of applications that they reviewed. We also recommend that the OHHLHC Programs Division Director adhere to the new procedures requiring the reviewers to verify that applicants are in designated empowerment zone.