We audited the State of Louisiana, Office of Community Development’s disaster assistance programs, administered by the State’s subrecipient, St. John the Baptist Parish, as part of our annual audit plan to review disaster assistance programs under the 2013 Disaster Relief Appropriations Act. Our objective was to determine whether the Parish, as the State’s subrecipient, met the requirements of its agreement with the State and followed U.S. Department of Housing and Urban Development (HUD) requirements related to its program participant, procurement, and expenditure activities when administering its disaster assistance programs.
We found that the Parish, as the State’s subrecipient, did not always meet the requirements of its agreement and follow HUD requirements when administering its disaster assistance programs, as it (1) did not always ensure that its contractor had adequate documentation to support the eligibility of disaster assistance program participants, (2) violated procurement requirements when it did not perform an independent cost estimate for one contract, and (3) did not maintain detailed information regarding time worked on disaster projects to support salary expenditures. This condition occurred because the State’s onsite reviews did not address all program areas and its administrative manual did not include guidance for all contract types. In addition, the Parish did not have consistent program policies, understand procurement requirements, and have adequate procurement and written expenditure policies. As a result, the State could not provide reasonable assurance to HUD that the Parish would properly administer and spend Community Development Block Grant disaster assistance funds in accordance with requirements, putting at least $5.3 million obligated for the disaster assistance programs at risk of mismanagement, and paid more than $1.5 million in questioned costs.
We recommend that HUD require the State to develop and implement written procedures and actions that would correct and prevent the deficiencies outlined in the finding to better ensure that the Parish spends at least $5.3 million in accordance with requirements. We also recommend that HUD require the State to (1) ensure that the Parish supports program participant eligibility, review the remaining 293 program participant files for eligibility, and support or repay more than $1.5 million, (2) provide assistance to the Parish on procurement requirements, and (3) review the Parish’s procurement and expenditure policies for adequacy.