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AUDIT REPORT
CITY OF UTICA
COMMUNITY PLANNING AND DEVELOPMENT
PROGRAMS
UTICA, NEW YORK
2002-NY-1003
September 5, 2002
OFFICE OF AUDIT
NEW YORK/NEW JERSEY DISTRICT
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Issue Date
September 5, 2002
Audit Case Number
2002-NY-1003
TO: Michael F. Merrill, Director, Community Planning and Development, 2CD
FROM: Alexander C. Malloy, Regional Inspector General for Audit, 2AGA
SUBJECT: City of Utica
Community Planning and Development Programs
Utica, New York
Pursuant to a request from the U.S. Department of Housing and Urban Development (HUD)
Director, Community Planning and Development, Buffalo New York, we completed an audit of
two development projects within the City of Utica, New York: the Utica Historic Marina Project
and the Parkway Recreation Center Project. The primary objectives of the review were to
determine whether: (1) the two projects were eligible activities that met a national objective of the
Community Development Block Grant (CDBG) Program; (2) the costs charged for the projects
were necessary, reasonable, and in accordance with Federal regulations; and (3) the City of Utica
(Grantee) had proper budgetary and accounting controls. The results of our audit are contained
herein and include two findings with recommendations for corrective actions.
In accordance with HUD Handbook 2000.06 REV-3, within 60 days please give us, for each
recommendation without management decisions, a status report on: (1) the corrective action taken;
(2) the proposed corrective action and the date to be completed; or (3) why action is considered
unnecessary. Additional status reports are required at 90 days and 120 days after report issuance for
any recommendations without a management decision. Also, please furnish us copies of any
correspondence or directives issued because of the audit.
Should you or you staff have any questions, please contact William H. Rooney, Assistant Regional
Inspector General for Audit, at (212) 264-8000, extension 3976.
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Management Memorandum
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2002-NY-1003 Page ii
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Executive Summary
We completed an audit of two development projects administered by the City of Utica, New York
(Grantee): the Utica Historic Marina Project and the Parkway Recreation Center Project. The
purpose of our audit was to determine whether: (1) the two projects were eligible activities that met
a national objective of the CDBG Program; (2) the costs charged for the projects were necessary,
reasonable, and in accordance with Federal regulations; and (3) the City of Utica (Grantee) had
proper budgetary and accounting control. Our review raised concerns regarding the two projects.
These concerns are discussed below.
Utica Historic Marina Project
The Utica Historic Marina Project, which is part of the
Utica Historic Marina Canal Corridor Initiative, a HUD initiative, related to the
Project may not meet its job New York canal system, may not meet its job creation goal.
creation goal This occurred because the Grantee failed to develop a plan
to ensure that the required job creation goal would be met
for low and moderate income families. To be an eligible
activity, CDBG funds must be used to achieve one of the
CDBG national objectives. One of the national objectives is
to benefit low and moderate income families. As a result,
we consider cost of $213,750 that was incurred with Small
Cities CDBG funds from Oneida County, New York, as
unsupported pending a HUD eligibility determination.
Regarding a pending Section 108 CDBG Loan Guarantee of
$250,000 under Oneida County’s Small Cities CDBG
Program, we recommend that HUD should not provide final
approval to the Section 108 Loan Guarantee until both the
County and the Grantee provide assurances that an
acceptable number of jobs will be created.
In connection with the above, it should be noted that the
Grantee expended $902,799 of the Grantee’s CDBG
Entitlement Funds on the Marina Project. However, HUD
disagreed with the expenditure of these funds and directed
the Grantee to reimburse its CDBG Program $902,799.
Accordingly, we questioned these costs pending the
Grantee’s reimbursement to its CDBG Program.
Parkway Recreation Center
The Grantee used CDBG funds to help finance the
Activity may not meet a renovation of a Ski Chalet in spite of a warning by HUD
National Objective that the activity may not meet a national objective of the
CDBG Program. This occurred because the Grantee
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Executive Summary
decided to rehabilitate and connect an existing Ski Chalet
that abutted the new recreation facility that the Grantee
constructed for its youth. Our review disclosed that the
Grantee referred to the construction of the new recreation
facility as Phase 1 and to the Ski Chalet as Phase II of its
Parkway Recreation Center Project. HUD told the Grantee
that the use of CDBG funds to rehabilitate the Ski Chalet
may not meet a national objective. Despite this warning, the
Grantee charged the CDBG program at least $255,158 of
costs associated with the renovation of the Ski Chalet
(Phase II). Since the Ski Chalet activity may not meet a
CDBG national objective, the costs, $255,158, that we
identified as being associated with the activity are
considered unsupported pending a HUD eligibility
determination.
We are recommending that HUD ensure that the Grantee
repays the $902,799 of ineligible costs to the CDBG
Program from non-Federal funds. We also recommend that
HUD make eligibility determinations regarding the
unsupported costs involving both the Marina and Parkway
Recreation Center Projects Finally, we recommend that
Recommendations HUD should not provide final approval to the Section 108
Loan Guarantee until assurances are provided that an
acceptable number of jobs will be created.
On July 30, 2002, we held an exit conference at City Hall,
Exit Conference Utica, New York that was attended by the following
Grantee and HUD officials:
City of Utica, New York
Timothy Julian, Mayor
Mark Mojave, Commissioner, Department of Urban and
Economic Development
James Schlager, Finance Director, Department of Urban
and Economic Development
HUD-Office of Inspector General (OIG)
William H. Rooney, Assistant Regional Inspector General
John Cameron, Senior Auditor
Richard Roseboom, Senior Auditor
2002-NY-1003 Page iv
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Executive Summary
The Grantee’s written response to our draft findings was
provided to us on August 14, 2002. The response is
summarized at the end of each finding and is shown in its
entirety in Appendix A of this report.
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Executive Summary
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2002-NY-1003 Page vi
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Table of Contents
Management Memorandum i
Executive Summary iii
Introduction 1
Findings
1. Utica Historic Marina Project May Not Meet The Job
Creation Goal 3
2. The Ski Chalet Project May Not Meet a National
Objective of the CDBG Program 9
Management Controls 15
Follow Up On Prior Audits 17
Appendices
A Schedule of Questioned Costs and Funds Put to Better Use 19
B Auditee Comments 21
C Utica Photos 25
D Distribution 27
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Table of Contents
Abbreviations
CDBG Community Development Block Grant
CCI Canal Corridor Initiative
FT Full Time
HUD U.S. Department of Housing and Urban Development
OIG Office of Inspector General
PT Part Time
2002-NY-1003 Page viii
Introduction
HUD approved the Utica Historic Marina Project as part of the Canal Corridor Initiative. The Canal
Corridor initiative commenced with a Notice of Funding Availability that was published in the
Federal Register of December 3, 1996 (Volume 61, Number 233). The Notice announced the
availability of Small Cities CDBG and Section 108 Guaranteed Loans to fund eligible development
activities related to the New York State Canal System.
Oneida County, New York obtained HUD approval for the Small Cities funding to develop a
Marina, located in Utica, New York. Although Oneida County, New York obtained the funding for
the Utica Historic Marina Project funding, the City of Utica (Grantee) designed, implemented, and
administered the Project.
The Grantee also administers its own CDBG Entitlement Program under Title 1 of the Housing and
Community Development Act of 1974, as amended. The Grantee used some of its CDBG
Entitlement funds to develop the Marina and to construct the Parkway Recreation Center. Both the
Utica Historic Marina Project and the Parkway Recreation Center are the subject of this audit.
A Mayor and Common Council govern the Grantee. The Grantee’s office is located at City Hall,
Utica, New York. The Mayor is Timothy Julian; the Commissioner of the Department of Urban and
Economic Development is Mark Mojave; and the Comptroller is Joan Scalise.
The audit objectives were to determine whether: (1) the two
Audit Objectives projects were eligible activities that met a CDBG national
objective; (2) the costs charged for the projects were
necessary, reasonable, and in accordance with Federal
regulations; and (3) the City of Utica (Grantee) had proper
budgetary and accounting control.
To accomplish our audit objectives, the following audit
Audit Scope and procedures were performed:
Methodology
• Interviewed HUD staff at the Buffalo, New York
Office.
• Examined pertinent HUD files to obtain various
background information.
• Reviewed pertinent requirements for the Canal
Corridor Initiative and the Section 108 Loan
Guarantee Program, and the CDBG Program.
• Interviewed officials at Oneida County, New York.
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Introduction
• Reviewed Oneida County files pertaining to the Utica
Historic Marina Project.
• Interviewed officials at the Grantee’s Department of
Urban and Economic Development.
• Reviewed Grantee’s Project files pertaining to the
Marina and Parkway Recreation Center.
• Reviewed the applicable costs charged for the Marina
and Parkway Recreation Center for appropriateness
and eligibility.
• Reviewed the Grantee’s budgetary and accounting
processes relating to the Marina and Parkway
Recreation Center.
• Performed site visits to the Marina and Parkway
Recreation Center Projects.
• Examined procurement records relating to the two
projects.
Regarding the Marina, $487,500 of Small Cities funds were
budgeted for the Project. In addition, the Grantee provided
$902,799 of its Entitlement funds for the Project. As
explained in Finding 1, we essentially reviewed all of the
applicable costs charged for this project. Regarding the
Parkway Recreation Center Project, the Grantee budgeted
$1,053,693. As explained in Finding 2, we used the non-
representative method to select a sample of 21 invoices
amounting to $431,230.
We performed the audit field work from November 2001
through June 2002. The audit covered period from January 1,
1997 through October 31, 2001, and was extended where
necessary. The audit was conducted in accordance with
generally accepted government auditing standards.
A copy of this report was provided to representatives of the
Grantee and Oneida County, New York.
2002-NY-1003 Page 2
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Finding 1
Utica Historic Marina Project May Not Meet
The Job Creation Goal
The Utica Historic Marina Project, which is part of the Canal Corridor Initiative, a HUD initiative
involving grants from the Small Cities CDBG Program and loans from the Section 108 Loan
Guarantee Program to fund development activities related to the New York canal system, may not
meet its job creation goal. This occurred because the Grantee failed to develop a plan to ensure
that the required job creation goal would be met. As a result, we consider cost of $213,750 that was
incurred with Small Cities CDBG funds from Oneida County, New York, as unsupported pending a
HUD eligibility determination. Regarding a pending Section 108 CDBG Loan Guarantee of
$250,000, which is under Oneida County’s Small Cities CDBG Program, we recommend that HUD
should not provide final approval to the Section 108 Loan Guarantee until both the County and the
Grantee provide assurances that an acceptable number of jobs will be created.
In connection with the above, it should be noted that the Grantee expended $902,799 of the
Grantee’s CDBG Entitlement Funds on the Marina Project. The Grantee attempted to justify the
expenditures that were made with these funds by stating that the Marina would service low and
moderate income families. However, HUD disagreed and directed the Grantee to reimburse its
CDBG Program the $902,799. At the completion of our fieldwork, the Grantee had not reimbursed
the money to its CDBG Program.
Background of Utica Historic Marina Project
Background of Utica Historic
Marina Project The following chronology of key events provides
background on the Utica Historic Marina Project.
September 1997:
HUD approves the Canal Corridor Initiative
application from Oneida County, New York. The
Marina Project, located in Utica, New York, was part
of the approved application.
The Marina Project was expected to cost $500,100
with $487,500 of the funds coming from HUD:
$237,500 of Small Cities CDBG funds and a
$250,000 Small Cities Section 108 Loan. All of the
HUD funding flowed through Oneida County, New
York to the City of Utica, New York (Grantee).
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Finding 1
The HUD approved Canal Corridor application stated that
the Marina would create 60 jobs. (35 full time and 25 part
time).
August 1998:
Grantee expands scope of The Grantee greatly expanded the planned scope of the
Marina Project; estimated Marina Project. The Grantee obtained professional cost
cost now $2.6 million estimates of $2.6 million for the Marina project. The
Grantee did not provide any documentation as to the source
of the additional funding.
August 2000:
The Grantee provided the County with a revised Small
Cities Section 108 Loan Guarantee application for the
Marina Project. The total budget was over $2,500,000.
Almost $2,000,000, was budgeted as Grantee funds. The
Grantee did not mention that it was using its CDBG
Entitlement funds for the Marina Project.
The application also included a letter from the Grantee
dated August 10, 2000, regarding the funding sources for
the Marina Project. The letter stated that the Grantee would
provide an additional $2,000,000 as part of its capital plan.
The letter also reiterated that 5 full-time (FT) and 10 part-
time (PT) jobs would be created. The 10 PT jobs equate to
5 FT jobs; therefore, the total FT jobs to be created would
be 10.
March 2001:
The Grantee requested $237,500 of Small Cities CDBG
funds from the County. The County sent the Grantee
$213,750.
June 2001:
As of this time period the Grantee provided over $900,000
of it CDBG Entitlement Funds for the Marina Project. The
Grantee wrote to HUD stating that this was an eligible use
of CDBG funds because it considered the Marina as a
public use facility available to low and moderate income
families. Note: under the Canal Corridor Initiative the
Marina was considered an economic development project,
2002-NY-1003 Page 4
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Finding 1
whereby jobs would be created for low and moderate
income families.
November 2001:
Use of $902,799 in CDBG
Entitlement Funds is ineligible HUD officially told the Grantee that the $902,799 of
CDBG Entitlement funds expended on the Marina Project
by the Grantee was ineligible because the activity did not
benefit low and moderate income families. HUD directed
the Grantee to repay its CDBG Entitlement Program with
non-Federal funds.
February 2002:
The Grantee filed its annual consolidated plan. The plan
included $300,000 of local funds for partial repayment of
the $902,799 of ineligible costs mentioned above.
However; a written agreement did not exist between HUD
and the Grantee regarding repayment of the remaining
funds.
Small Cities CDBG Funds Tied to Marina Project May
Not Meet Job Creation Criteria
If jobs are not created at the HUD approved the Small Cities CDBG funds for the Marina
Marina the additional HUD Project based upon at least 10 jobs being available for low
funds may be ineligible and moderate income families. However, our discussions
with County and Grantee officials indicated that the Marina
Project had not created any jobs. Furthermore, Grantee
officials told us that there are no solid numbers available or
plans in place regarding how many or what types of jobs the
Grantee anticipates creating.
Our review disclosed that the Grantee expended $213,750 of
Small Cities CDBG funds on the Marina Project. The funds
were provided by HUD through Oneida County, New York
as part of the Canal Corridor Initiative Program. In addition,
the County and the Grantee are awaiting HUD’s approval on
a $250,000 Small Cities Section 108 Loan
In accordance with Title 24, Code of Federal Regulations
(CFR) Part 570.209 (b)(3)(i)(A) $50,000 is the amount HUD
uses as its benchmark for job creation and amount of CDBG
assistance. For example, if only three jobs are created, than in
theory only $150,000 of CDBG funds should be provided.
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Finding 1
Since the Marina Project had not created any jobs, and the
Grantee and County do not have a plan regarding how many
jobs will be created, we consider the $213,750 of Small
Cities CDBG funds provided for the Marina Project as
unsupported costs pending a HUD eligibility determination.
Also, HUD should not provide final approval to the Small
Cities Section 108 Loan Guarantee until both the County and
Grantee provide assurances that an acceptable number of
jobs will be created.
Auditee Comments Regarding the $902,799 of ineligible costs, the Grantee has
already provided $300,0001 to its CDBG Program from
non-Federal funds. The Grantee completed its first
monitoring of the Marina regarding jobs. Although, there
is no time frame in which to accomplish the job goals, the
Grantee believes that it will be achieved. (See Appendix A,
for the Grantee’s entire response.)
OIG Evaluation of HUD needs to ensure that the Grantee continues to
Auditee Comments reimburse its CDBG Program from non-Federal funds and
HUD must ensure that jobs are created within a reasonable
time period.
We recommend that HUD:
1A. Ensure that the Grantee reimburses its CDBG
Program the balance of the $902,799 of ineligible
costs from non-Federal funds.
1B. Follow up on the Grantee’s progress regarding its
job creation goals at the Marina Project and give the
Grantee a specified period of time to meet the job
creation goals.
1C. Apply the $50,000 per job standard and make a
determination how much of the $213,750 of Small
Cities CDBG funds are eligible costs.
1D. Require the Grantee to reimburse the County for any
Small Cities CDBG funds that is determine to be
ineligible.
1
After the completion of our field work, at our exit conference the Grantee provided us with evidence that it
reimbursed its CDBG Program $300,000.
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Finding 1
1E Should not provide final approval to the $250,000
Section 108 Loan Guarantee until both the County
and the Grantee provide assurances that an acceptable
number of jobs would be created.
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Finding 1
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2002-NY-1003 Page 8
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Finding 2
The Ski Chalet Project May Not Meet National
Objective of the CDBG Program
The Grantee used CDBG funds to help finance the renovation of a Ski Chalet in spite of a
warning by HUD that the activity may not meet a national objective of the CDBG Program.
This occurred because the Grantee decided to rehabilitate and connect an existing Ski Chalet that
abutted the new recreation facility that the Grantee constructed for its youth. Our review
disclosed that the Grantee referred to the construction of the new recreation facility as Phase 1
and to the Ski Chalet as Phase II of its Parkway Recreation Center Project. Regarding this
Project, HUD told the Grantee that the construction of the new recreation facility was an eligible
CDBG activity; but, the use of CDBG funds to rehabilitate the Ski Chalet may not meet a
national objective. Despite this warning, the Grantee charged the CDBG Program at least
$255,158 of costs associated with the renovation of the Ski Chalet (Phase II). Since the Ski
Chalet activity may not meet a CDBG national objective, the costs totaling $255,158, that we
identified as being associated with the activity are considered unsupported pending a HUD
eligibility determination.
Background In 1998, the Grantee’s former Mayor conceived a plan to
construct a recreation center within the City of Utica’s limits
to provide activities for the City’s youth. On May 6, 1998,
the Utica City Council introduced the Parkway Recreational
Center activity. Initially, the Grantee budgeted $1,000,000 of
State funds to construct the new recreation facility.
In May 1999, the Grantee increased the budget to over
$2,000,000. The Grantee’s Department of Urban and
Economic Development showed the following sources of
funds for the Project:
State Funds $1,000,000
Capital Fund 450,000
Utica Foundation 150,000
CDBG 551,425
Total $2,151,425
Parkway Recreation Center Within a few months of securing funding for the Project a
Project expands into a second new scope of work was determined that significantly
phase expanded the activity.
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Finding 2
Additionally, the Grantee also decided to rehabilitate an
existing Ski Chalet that it owned. Since the Ski Chalet
abutted the new recreation facility, the Grantee connected it
to the new facility. The Grantee referred to the construction
of the new recreation facility as Phase 1, and to the
rehabilitation of the Ski Chalet as Phase II, of its Parkway
Recreation Center Project. In August 1998, the Grantee’s
Architect estimated that the total project cost of both phases
would exceed $4 million.
With the addition of Phase II, the Parkway Recreation
Center’s budget increased from $2,151,425 to $4,387,124.
Moreover, the portion of CDBG funding included in the
budget increased from $551,425 to $1,053,693; thus,
increasing the proposed use of CDBG funds to over
$500,000. As shown below, adding the Ski Chalet to the
Project (Phase II) increased the proposed amount of CDBG
funds for the Parkway Recreation Center by 91 percent.
Parkway Recreation Center
$1,200,000
A $1,000,000
m $800,000
o
$600,000
u
n $400,000
t $200,000
$0
I I & II
Project Phases
2002-NY-1003 Page 10
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Finding 2
Accounting for Project costs
The Grantee’s Department of Urban and Economic
Development’s budget and summary of accounting
for the Parkway Recreation Center, as of February
15, 2002, showed the following:
Funding Source Budget Expended
General Fund $529,040 $501,459
State Grant T 1,000,000 947,063
Capital Fund H-56504-4.44500
t 4,391 4,391
Capital Fund H-81641-4.44104
T 800,000 794,237
t
Capital Fund H-81641-4.44105 500,000 499,200
T
Capital Fund H-81641-4.44106 300,000 286,986
Parks Foundation H-56506-.44101 5,000 5,000
Utica Foundation & Donation 195,000 95,000
CDBG 1,053,693 1,040,944
TOTAL BUDGET $4,387,124 $4,174,280
Criteria
Title 24, Code of Federal Regulation (CFR) Part 85.20,
Standards for financial management systems, requires
grantees and subgrantees to: report accurate, current and
complete disclosure of the financial results of financially
assisted activities; maintain records which adequately
identify the source and application of funds; maintain
effective control and accountability for all grant and subgrant
cash, personal property and other assets; and, compare actual
expenditures and outlays with budgeted amounts for each
grant or subgrant.
The results of our review indicated that as of February 15,
2002, the Grantee expended $4,174,280 of the $4,387,124
budgeted for the Parkway Recreation Center Project, of
which $1,040,944 of those expenses were charged to the
CDBG Program.
Title 24, CFR Part 570.200(a)(2) requires that CDBG
grantees must certify that their projected use of funds has
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Finding 2
been developed so as to give maximum feasible priority to
projects that will carry out one of the national objectives: (1)
benefit to low and moderate income families, (2) aid in the
prevention and elimination of slums or blight, or (3) urgency
of need.
Accounting records were not During the review, we examined relevant accounting
adequately maintained records and related documentation that was maintained by
the Grantee’s Comptroller’s Office and the Grantee’s
Department of Urban and Economic Development.
Although the Grantee’s official accounting records are
maintained by the Comptroller’s Office, detailed subsidiary
accounting records for CDBG assisted projects are
maintained by the Department of Urban and Economic
Development. Neither the Comptroller’s office nor the
Department of Urban and Economic Development
maintained detailed records for the Parkway Recreation
Center Project reflecting costs by phases. Therefore, the
Grantee was unable to provide us with total costs incurred
with CDBG funds relative to Phase I and Phase II.
The distinction is important because HUD advised the
Grantee, in correspondence dated November 26, 2001, that
Phase I of the Parkway Recreation Center appears to
service an area that meets the low and moderate income
national objective. However, HUD stated that Phase II (Ski
Chalet) might not meet the low and moderate income
national objective. Accordingly, the use of CDBG funds for
the Ski Chalet may not be eligible.
Since the Grantee could not provide us a detail listing of
disbursements by Phase for the Parkway Recreation Center,
we selected a sample of costs that the Grantee charged to the
CDBG Program. Our objective was to determine whether
CDBG funds were used to pay for costs associated with
Phase II of the Parkway Recreation Center project.
At least $255,158 of the To test costs charged to the CDBG Program for the Project
Parkway Recreation Center during the period June 2000 through May 2001, we used a
costs are Phase II costs non-representative sampling method to select 21 invoices,
which reflected costs of $431,230. A review of the 21
invoices disclosed that 11, reflecting costs of $255,158,
related to expenditures associated with Phase II of the
Parkway Recreation Center Project.
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Finding 2
Since the Grantee did not account for Project costs by each
phase, it is possible that more CDBG costs could have been
incurred for Phase II of the Parkway Recreation Center.
Because HUD told the Grantee that costs applicable to Phase
II might not meet a national objective, the Grantee must
organize its accounting records to differentiate between
Phase 1 and Phase II costs of its Parkway Recreation Project.
Auditee Comments The Grantee believes that HUD based its opinion regarding
the low and moderate income national objective on a
narrow definition of the criteria. The Grantee is prepared to
document the eligible uses of the Phase II, Ski Chalet to the
HUD Area Office. The Grantee will perform a complete
analysis of all CDBG expenditures to distinguish between
Phase 1 and Phase II costs per the OIG’s recommendation.
(See Appendix A, for the Grantee’s entire response.)
OIG Evaluation of HUD has determined that the Ski Chalet may not meet the
Auditee Comments low and moderate income national objective. If the Grantee
can document that the Ski Chalet meets the low and
moderate income national objective, the Grantee should
provide the documentation to the HUD Area Office.
We recommend that HUD:
2A. Make an eligibility determination regarding the
$255,158 of unsupported CDBG costs.
2B. Require the Grantee to distinguish between Phase 1
and Phase II costs of its Parkway Recreation Center
Project.
2C. Make an eligibility determination regarding any
additional CDBG funded Phase II costs identified
by the Grantee’s actions resulting from
Recommendation 2B above.
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Finding 2
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Management Controls
In planning and performing our audit, we obtained an understanding of the management controls
that were relevant to our audit. Management is responsible for establishing effective management
controls. Management controls, in the broadest sense, include the plan of organization, methods
and procedures adopted by management to ensure that its goals are met. Management controls
include the processes for planning, organizing, directing, and controlling program operations. They
include the systems for measuring, reporting, and monitoring program performance.
We determined the following management controls were
Relevant Management relevant to our audit objectives:
Controls
• Program Operations – Policies and procedures
that management has implemented to reasonably
ensure that a program meets its objectives.
• Compliance with Laws and Regulations-
Controls to ensure that the projects meet a
national objective.
• Safeguarding Resources- Controls to ensure that
project costs charged to HUD are necessary,
reasonable, and in compliance with pertinent
Federal regulations.
• Validity and Reliability of Data- Grantee
Budgetary and Accounting controls
We assessed the relevant controls identified above.
It is a significant weakness if management controls do not
provide reasonable assurance that the process for planning,
organizing, directing, and controlling program operations
will meet an organization’s objectives.
Based on our review, we believe the following items are
Significant Weaknesses significant weaknesses:
• Grantee did not ensure that the Projects met a
national objective. Audit Findings 1 and 2. (Program
Operations)(Compliance with Laws and
Regulations).
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Management Controls
• Grantee did not ensure that all project costs charged
to HUD are necessary, reasonable, and in compliance
with federal regulations. Audit Findings 1 and 2.
(Safeguarding Resources).
• Grantee did not have adequate budgetary and
accounting controls. Audit Finding 2. (Validity and
Reliability of Data).
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Follow Up On Prior Audits
There were no prior audit reports specifically pertaining to the Grantee’s Historic Marina and
Parkway Recreation Center Projects.
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Follow Up On Prior Audits
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Appendix A
Schedule of Questioned Costs and Funds Put to
Better Use
Recommendation Unsupported Costs (1) Funds Put To Better Use (2)
Number
1A $902,799
1C $213,750
1E $250,000
2A $255,158
Total $1,371,707 $250,000
1/ Unsupported costs are costs charged to a HUD-financed or HUD-insured program or
activity and eligibility cannot be determined at the time of audit. The costs are not
supported by adequate documentation or there is a need for a legal or administrative
determination on the eligibility of the costs. Unsupported costs require a future decision
by HUD program officials. This decision, in addition to obtaining supporting
documentation, might involve a legal interpretation or clarification of Departmental
policies and procedures.
2/ Funds Put To Better Use pertain to future costs that can be avoided or reprogrammed.
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Appendix A
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Appendix B
Auditee Comments
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Appendix B
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Appendix B
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Appendix B
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Appendix C
UTICA PHOTOS
Ski Chalet
Utica Historical Marina
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Appendix C
Parkway Recreation Center
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Appendix D
Distribution
Mark Mojave, Commissioner
Department of Economic Development
1 Kennedy Plaza
Utica, New York 13502
Timothy Julian, Mayor
City of Utica
1 Kennedy Plaza
Utica, New York 13502
Ralph J. Eannace Jr.
Oneida County Executive
800 Park Avenue
Utica, New York 13501
John Kent
Deputy Commissioner
Oneida County
Department of Planning
321 Main Street
Utica, New York 13601
Sharon Pinkerton, Senior Advisor
Subcommittee on Criminal Justice
Drug Policy & Human Resources
Stanley Czerwinski, Director
Housing & Telecommunication Issues
U.S. General Accounting Office
Steve Redburn, Chief Housing Branch
Office of Management and Budget
The Honorable Fred Thompson
Ranking Member
Committee on Governmental Affairs
The Honorable Joseph Lieberman
Chairman
Committee on Governmental Affairs
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Appendix D
Andy Cochran
House Committee on Financial Services
Clinton C. Jones, Senior Counsel
Committee on Financial Services
Kay Gibbs
Committee on Financial Services
Linda Halliday
Department of Veterans Affairs
Office of Inspector General
William Withrow
Department of Veterans Affairs
OIG Audit Operations Divison
George Reeb
Assistant Inspector General for Health Care Financing Audits
The Honorable Dan Burton
Chairman
Committee on Government Reform
2185 Rayburn Building
House of Representatives
Washington, DC 20515
The Honorable Henry A. Waxman
Ranking Member
Committee on Governmental Reform
2204 Rayburn Building
House of Representatives
Washington, DC 20515
The Honorable Sherwood Boehlert
2246 Rayburn Building
House of Representatives
Washington, DC 20515 3223
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City of Utica, Community Planning and Development Programs, Utica, New York
Published by the Department of Housing and Urban Development, Office of Inspector General on 2002-09-05.
Below is a raw (and likely hideous) rendition of the original report. (PDF)