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September 19, 2018
  • Community Planning and Development
2018-BO-1005
2018-BO-1005.pdf

We audited the State of Connecticut’s Small Cities Community Development Block Grant program based on an Office of Inspector General risk assessment, which ranked the State as the highest risk grantee in Connecticut.  Our audit objective was to determine whether the State ensured that its grantees properly administered their housing rehabilitation programs.  We also assessed various complaints made against the program to determine whether they had merit and if so, whether they were addressed and resolved.

The State did not ensure that its grantees properly administered their housing rehabilitation programs.  For example, the State did not ensure that its grantees always (1) conducted and documented environmental reviews, (2) properly procured contracts, (3) properly determined homeowner and project eligibility, and (4) correctly charged program costs.  Additionally, the complaints reviewed generally had merit, but they were not all addressed and resolved.  These deficiencies occurred, in part, because the State did not (1) provide adequate oversight and monitoring of its grantees to ensure that they administered program funds in accordance with program requirements and (2) have policies and procedures to assess the validity of all program complaints to ensure that they were addressed and resolved.  As a result, we identified more than $2.9 million in questioned costs.  Additionally, the State did not meet its program goal to assist the maximum amount of homeowners, and the U.S. Department of Housing and Urban Development (HUD) did not have assurance that all costs were eligible, supported, reasonable, and necessary and that valid complaints were reasonably addressed and resolved.

We recommend that the Director of HUD’s Hartford Office of Community Planning and Development require State officials to (1) repay more than $1.1 million in ineligible program costs, (2) repay $434,970 in unreasonable program costs, (3) adequately support or repay more than $1.3 million in unsupported program costs, (4) strengthen controls over program oversight to ensure that grantees comply with their agreements and program requirements, and (5) develop policies and procedures to address program complaints in a timely manner.

Recommendations
Recommendation Status Date Issued Summary
2018-BO-1005-001-A Closed September 19, 2018 Repay from non-Federal funds the $1,190,977 in ineligible costs charged to the program.
2018-BO-1005-001-B Closed September 19, 2018 Repay from non-Federal funds the $434,970 in unreasonable costs charged to the program
2018-BO-1005-001-C Closed September 19, 2018 Support $249,015 in program costs spent on a 2014 grant for which the grantee was unable to provide a tier one environmental review record or repay from non-Federal funds any amount that cannot be supported
2018-BO-1005-001-D Closed September 19, 2018 Support $676,922 for contracts that were improperly procured or repay from non-Federal funds any amount that cannot be supported.
2018-BO-1005-001-E Closed September 19, 2018 Support $422,600 in program income that was not used before additional grant fund drawdowns or repay from non-Federal funds any amount that cannot be supported
2018-BO-1005-001-F Closed September 19, 2018 Strengthen controls over program oversight to ensure that grantees comply with their agreements and program requirements, including tier two environmental reviews, contract procurements, and homeowner and project eligibility, to ensure that (1) all income, including rental income, is considered; (2) loan-to-value ratios do not exceed 90 percent without State approval; and (3) projects do not exceed the program limits without State approval.
2018-BO-1005-001-G Closed September 19, 2018 Strengthen controls over monitoring to ensure that onsite monitoring and monitoring letters are completed in a timely manner and sufficient supporting documentation is required and reviewed by those responsible for grant oversight.
2018-BO-1005-002-A Closed September 19, 2018 Develop and implement policies and procedures to assess the validity of all program complaints to ensure that they are addressed and resolved in a timely manner.
2018-BO-1005-002-B Closed September 19, 2018 Provide additional guidance to its grantees regarding its policy stating that the repair or replacement of paved surfaces should be minimal in cost and incidental to the rehabilitation of the dwelling, including whether grantees are required to consult with the State before starting the work.