We audited the Municipality of Bayamon’s Emergency Shelter Grants and Emergency Solutions Grants programs. We selected this auditee based on congressional and hotline complaints alleging that the Municipality improperly used Emergency funds to transport people from Puerto Rico to mainland U.S. cities to receive rehabilitation treatment. Our main audit objectives were to determine whether allegations included in the complaints had merit and whether the Municipality’s Emergency programs were administered in compliance with the U.S. Department of Housing and Urban Development’s (HUD) requirements.
Although the Municipality assisted in the transportation of persons from Puerto Rico to mainland U.S. cities to receive treatment, HUD funds were not used to pay for the transportation costs of the participants. However, the Municipality improperly used Emergency funds to pay for travel costs of employees who went to mainland U.S. cities to follow up on clients. The Municipality’s financial management system did not properly identify the source and application of more than $1.14 million in Emergency funds and allowed the use of more than $189,000 for ineligible expenditures. In addition, it did not support the eligibility of more than $38,000 in program charges and reported inaccurate information in HUD’s information system. As a result, HUD lacked assurance that funds were adequately accounted for, safeguarded, and used for requested and eligible purposes and in accordance with HUD requirements.
We recommend HUD require the Municipality to (1) complete the implementation of the new accounting system in accordance with HUD requirements, (2) submit all supporting documentation showing the eligibility and propriety of $982,851 in Emergency funds, and (3) reimburse its program $189,227 from non-Federal funds in ineligible expenditures.