Sneak Preview: NYC Urged To Improve CDBG-DR Fund Oversight

January 15, 2015 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) New York City’s Office of Management and Budget planned to strengthen controls over its Community Development Block Grant Disaster Recovery Assistance (CDBG-DR) reimbursements to ensure that all grant costs charged are eligible and necessary and are adequately documented, in response to a recent Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) audit.

The New York City Office of Management and Budget administers CDBG-DR funds that HUD awarded to the city as a result of damages caused by Hurricane Sandy. In the audit, OIG reviewed the city’s $183 million reimbursement to a nonprofit subrecipient, the Health and Hospitals Corp., for activities at two New York City hospitals.

OIG found that that the city did not always disburse CDBG-DR funds in accordance with federal regulations. It said that the city did not provide adequate documentation that would support the salaries and fringe benefits that Health and Hospitals Corp. charged to the grant, and did not justify expenses that OIG deemed unreasonable and unnecessary. In addition, the city did not adequately monitor the subrecipient, nor did it document meeting one of CDBG’s national objectives.

“These deficiencies were attributed to weaknesses in the city’s management controls over its disbursement procures and monitoring procedures and the city official’s failure to follow the requirements of the city’s grant agreement,” OIG said. “As a result, city officials could not assure HUD that CDBG-DR funds were disbursed for eligible, reasonable and necessary program expenses in compliance with HUD rules and regulations.”


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