oversight

City of Aurora, Colorado's Capacity to Administer Recovery Act Funding

Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-09-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Telephone: (303) 672-5452       http://www.hud.gov/offices/oig/                         Fax: (303) 672-5006



                                                         U.S. Department of Housing and Urban Development
                                                         Office of Inspector General
                                                         Region VIII Office of Audit
                                                         UMB Plaza - 24th floor
                                                         1670 Broadway
                                                         Denver, Colorado 80202-4801



                                                         MEMORANDUM NO: 2009-DE-1802

September 30, 2009

MEMORANDUM FOR: LeRoy Brown, Director, Office of Community Planning
                  and Development, 8AD

       //signed//
FROM: Ronald J. Hosking, Regional Inspector General for Audit, 8AGA

SUBJECT: City of Aurora, Colorado’s Capacity to Administer Recovery Act Funding

                                        INTRODUCTION

In accordance with our goal to review funds provided under the American Recovery and
Reinvestment Act of 2009 (Recovery Act), we conducted a capacity review of the City of
Aurora’s (City) operations. Our objective was to determine whether there was evidence to
indicate that the City lacked the capacity to adequately administer Recovery Act funding.

                                METHODOLOGY AND SCOPE

Our review of the City was limited to gaining an understanding of internal controls over the
administration of Recovery Act funds. To meet our objective, we reviewed Recovery Act
documentation and funding agreements. We interviewed the City’s management and staff and
briefly reviewed the City’s documentation such as policies and procedures, organizational charts,
and job descriptions. Additionally, we reviewed the City’s action plan, including substantial
amendments, and grant agreements. Our review of this documentation was limited to our stated
objective and should not be considered a detailed analysis of the City’s internal controls or
operations.

We used the Internal Control – Integrated Framework, generally referred to as the Committee of
Sponsoring Organizations (COSO) report, as a framework to evaluate the City’s capacity to
administer its Recovery Act funding. The COSO report was published in 1992 and was a joint
project of five organizations which formed the Committee of Sponsoring Organizations of the
Treadway Commission. This report describes the five interrelated components of internal
control: control environment, risk assessment, control activities, information and
communication, and monitoring.
 Telephone: (303) 672-5452       http://www.hud.gov/oig/oigindex.html          Fax: (303) 672-5006

                                            BACKGROUND

Under the Recovery Act of 2009, the U.S. Department of Housing and Urban Development (HUD)
allocated more than $1.6 million in funding to the City. This amount included more than $1 million
in Homelessness Prevention and Rapid Re-Housing Program funding and $660,366 in additional
Community Development Block Grant (CDBG) Recovery Act funding.

For the Office of Community Planning and Development’s formula programs for fiscal years
2007 to 2009, the City was awarded more than $11.4 million. This amount included funding
under CDBG, the HOME Investment Partnerships Program (HOME), and Emergency Shelter
Grants (ESG). Below is a chart showing the allocations per program per fiscal year.

                                                HOME
        Fiscal year           CDBG            (including                ESG       Total
                                                ADDI*)
            2009             $2,472,351        $1,301,829          $108,245     $3,882,425  
            2008             $2,431,204        $1,183,497          $108,298     $3,722,999  
            2007             $2,513,507        $1,242,846          $108,407     $3,864,760  
                             $7,417,062        $3,728,172          $324,950    $11,470,184  

        *ADDI=American Dream Downpayment Initiative

Additionally, under the Recovery Act, the City submitted an application to HUD requesting more
than $14 million in Neighborhood Stabilization Program II funding. The City was previously
awarded more than $4.4 million under the Housing and Economic Recovery Act of 2008 for the
Neighborhood Stabilization Program I.

                                       RESULTS OF REVIEW

We did not find evidence to indicate that the City lacked the capacity to adequately administer its
Recovery Act funding. Based on our limited review, the City had

    •   Written policies and procedures,
    •   A staffing plan,
    •   Plans for the use of funds, and
    •   A proven track record of past performance.

The City had written policies and procedures for its community development programs and was
updating them to incorporate the Recovery Act programs. Its substantial amendments to the
action plan outlined the planned staffing and the use of the funds. The most recent HUD reviews of
the City’s HOME and CDBG programs determined that its past performance complied with HUD
program requirements.




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 Telephone: (303) 672-5452   http://www.hud.gov/oig/oigindex.html        Fax: (303) 672-5006



                                   AUDITEE COMMENTS

We discussed the results of our review with the City at the informal exit conference on August
12, 2009. We provided the City the draft memorandum on September 17, 2009, and requested its
comments within seven days. Since there were no findings or recommendations noted, the City
agreed that an additional exit conference was not necessary. In an email dated September 23,
2009, the City concurred with the memorandum and offered no additional comments.

                                   RECOMMENDATIONS

Based on the results of the capacity review, this memorandum contains no recommendations.




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