We audited the Sacramento Housing and Redevelopment Agency’s Community Development Block Grant (CDBG) program, based on an Office of Inspector General risk assessment and U.S. Department of Housing and Urban Development (HUD) concerns. The objective of our audit was to determine whether the Agency used the City of Sacramento’s CDBG funds in accordance with HUD requirements and adequately monitored its subrecipients.
The Agency adequately monitored its subrecipients. However, it did not always use CDBG funds in accordance with HUD requirements or its own policies. Specifically, it did not (1) seek competition or maintain adequate documentation for four of its activities, (2) properly classify three capital improvement projects, or (3) ensure that one activity continued to meet national objective requirements. Additionally, the Agency paid for $283 in unallowable costs. This condition occurred because the Agency disregarded HUD regulations and its own procurement policy. As a result, HUD had no assurance that $385,414, which the Agency spent on four activities, was a fair and reasonable cost. Also, the Agency did not properly classify three activities totaling $119,150.
We recommend that the Director of HUD’s San Francisco Office of Community Planning and Development require the Agency to (1) provide supporting documentation for four procurements made without adequate competition totaling $385,414; (2) support that three feasibility studies met a final cost objective, reclassify the activities as administration and planning, or repay the program $55,200 from non-Federal funds; (3) reimburse its program $283 from non-Federal funds for unallowable costs; (4) provide training to its employees regarding allowable costs;; and (5) provide training on CDBG and procurement regulations to staff involved in CDBG activities.
Recommendations
Community Planning and Development
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Status2018-LA-1006-001-AOpenClosed$272,569.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on March 11, 2019Support that the 59 contracts awarded for the emergency repair program were fair and reasonable or repay its program $272,569 from non-Federal funds.
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Status2018-LA-1006-001-BOpenClosedClosed on November 30, 2018
Obtain technical assistance from HUD to revise its Emergency Repair Program to meet CDBG requirements.
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Status2018-LA-1006-001-COpenClosed$50,000.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on March 06, 2019Support that the contract awarded for the food incubator study was fair and reasonable and met a final cost objective or repay its program $50,000 from non-Federal funds.
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Status2018-LA-1006-001-DOpenClosed$48,895.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on November 13, 2018Support that change orders executed outside the scope of the Colonial Heights Library contract were fair and reasonable or repay its program $48,895 from non-Federal funds.
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Status2018-LA-1006-001-EOpenClosed$13,950.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on March 06, 2019Support that the contract awarded for the Boys and Girls Club feasibility study was fair and reasonable and met a final cost objective or repay its program $13,950 from non-Federal funds.
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Status2018-LA-1006-001-FOpenClosedClosed on November 13, 2018
Provide procurement training to its staff members who work on CDBG program activities and ensure that staff members comply with HUD requirements and use its current procurement policy.
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Status2018-LA-1006-001-GOpenClosed$55,200.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on November 13, 2018Support that the entrepreneur center feasibility study met a final cost objective or repay its program $55,200 from non-Federal funds.
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Status2018-LA-1006-001-HOpenClosed$283.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on March 18, 2019Reimburse its program $283 from non-Federal funds for unallowable bottled water costs.
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Status2018-LA-1006-001-IOpenClosed$141.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on March 18, 2019Review all invoices provided from its minor repair subrecipient between January 1, 2015, and December 31, 2017, and repay the program from non-Federal funds for all bottled water service payments not identified in this audit report.
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Status2018-LA-1006-001-JOpenClosedClosed on November 13, 2018
Provide training to its employees regarding allowable costs to ensure that all costs submitted by contractors and subrecipients are eligible for reimbursement.