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We audited the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant code enforcement program due to results from our external audits, which showed that grantees did not adequately understand and failed to ensure compliance with program requirements.  Our audit objective was to determine (1) whether HUD’s code enforcement guidance under its Office of Community Planning and Development (CPD) Notice CPD-14-016 was adequate to ensure that grantees met the intent of the program, (2) whether HUD followed its internal controls for developing the guidance, and (3) the adequacy of HUD’s monitoring of grantee code enforcement.

We determined that (1) HUD’s code enforcement guidance should be improved and additional training should be provided to better aid grantees in meeting the intent of the program, (2) HUD did not completely follow its internal controls for developing its code enforcement guidance, and (3) HUD’s monitoring of grantee code enforcement was generally adequate.

We recommend that the Acting General Deputy Assistant Secretary for Community Planning and Development (1) update and revise Notice CPD-14-016 to further improve the code enforcement guidance, (2) provide mandatory training on the revised Notice to the local field offices and grantees that use CDBG funds for the code enforcement program to ensure compliance with requirements, and (3) ensure that it is issued with the appropriate clearance.