We audited the State of Illinois’ Community Development Block Grant Disaster Recovery program. The audit was part of the activities in our fiscal year 2015 annual audit plan. We selected the State’s program based on a congressional request from the Honorable Mark Kirk to review the State’s awards of program funds under the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 for three projects. Our objective was to determine whether the State’s Department of Commerce and Economic Opportunity ensured that program funds used for the three projects met Federal requirements.
The Department did not ensure that program funds used for the three projects met Federal requirements. It could not provide sufficient documentation to support that two of the three projects met a national objective and the use of program funds for one of the projects. Further, program funds loaned for one of the projects were not repaid as required by the Department’s grant agreement with the subrecipient and the Department could not ensure that two of the subrecipients appropriately procured services for three contracts associated with two of the projects. As a result, HUD and the Department lacked assurance that more than $1.7 million in program funds was used and more than $4.3 million in program funds will be used in accordance with Federal requirements. In addition, the Department did not have $250,000 in program funds available for eligible program-funded projects.
We recommend that the Director of HUD’s Chicago Office of Community Planning and Development require the State to (1) support or reimburse its program from non-Federal funds for the three projects that lacked evidence of compliance with Federal requirements, (2) support that one project met a national objective or deobligate the program funds, (3) reimburse its program from non-Federal funds for the program funds not repaid, and (4) implement adequate controls to address the findings cited in this audit report.