oversight

The Philadelphia, Pennsylvania, and Baltimore, Maryland, CPD Offices Did Not Adequately Document Their Monitoring of CDBG Program Grantees

Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-07-09.

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

                                                               Issue Date
                                                                     July 9, 2009
                                                               Audit Report Number
                                                                     2009-PH-0002




TO:        Nadab O. Bynum, Director, Office of Community Planning and Development,
            Philadelphia Regional Office, 3AD
           Charles E. Halm, Director, Office of Community Planning and Development,
            Baltimore Field Office, 3BD


FROM:      John P. Buck, Regional Inspector General for Audit, Philadelphia Region, 3AGA

SUBJECT:   The Philadelphia, Pennsylvania, and Baltimore, Maryland, CPD Offices
            Did Not Adequately Document Their Monitoring of CDBG Program Grantees

                                  HIGHLIGHTS

 What We Audited and Why

           We audited the U.S. Department of Housing and Urban Development’s (HUD)
           monitoring of its Community Development Block Grant (CDBG) program
           grantees under the jurisdiction of the Philadelphia, Pennsylvania, and Baltimore,
           Maryland, Community Planning and Development (CPD) field offices as part of
           our annual audit plan. Our audit objective was to determine whether those offices
           adequately monitored their CDBG program grantees to ensure that they used their
           grant funds to assist low- and moderate-income families through eligible activities
           according to HUD requirements.

 What We Found


           The Philadelphia and Baltimore CPD field offices did not adequately document
           their monitoring of CDBG program grantees. Specifically, the field offices did
           not always maintain documentation to demonstrate that their monitoring was
           complete and did not always notify grantees of the findings and concerns
           identified during on-site monitoring within the required time limit.
What We Recommend


           We recommend that the Directors of HUD’s Philadelphia and Baltimore CPD
           field offices reemphasize to their staffs the importance of following established
           monitoring procedures, specifically to ensure that all correspondence,
           documentation, and work papers relating to the monitoring and conclusions are
           maintained in the official monitoring files; monitoring officials use the required
           monitoring exhibits; monitoring officials answer all of the questions and fill in all
           of the text boxes in the monitoring exhibits; and staffs prepare and send
           notification of the monitoring results to the grantees within the required 45-day
           time limit.

           In addition, we recommend that the Directors of HUD’s Philadelphia and
           Baltimore CPD field offices develop and implement a written quality assurance
           procedure and/or mechanism to ensure that monitoring conclusions are
           appropriately supported by complete documentation and that monitoring letters
           are submitted to grantees within the 45-day requirement.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.

Auditee’s Response


           We discussed the report with the Philadelphia and Baltimore CPD field offices
           during the audit and at exit conferences on June 11 and June 15, 2009,
           respectively. The Philadelphia field office provided written comments to our
           draft report on June 19, 2009. The Baltimore field office chose not to provide
           written comments. The field offices agreed with the recommendations in the
           report. The complete text of Philadelphia field office’s response can be found in
           appendix D of this report.




                                             2
                             TABLE OF CONTENTS

Background and Objective                                                    4

Results of Audit
        Finding: The Philadelphia and Baltimore CPD Field Offices Did Not   5
        Adequately Document Their Monitoring of CDBG Program Grantees

Scope and Methodology                                                       12

Internal Controls                                                           13

Appendixes
   A.   Grantees Reviewed                                                   15
   B.   Schedule of Deficiencies                                            16
   C.   Findings and Concerns Not Reported within 45 Days
                                                                            17
   D.   Auditee Comments
                                                                            18




                                             3
                            BACKGROUND AND OBJECTIVE

The Community Development Block Grant (CDBG) program is authorized under Title I of the
Housing and Community Development Act of 1974 (Act), as amended, and governed by 24 CFR
[Code of Federal Regulations] Part 570. The administrative office is the Assistant Secretary for
Community Planning and Development, U.S. Department of Housing and Urban Development
(HUD), Washington, DC. The CDBG program is a flexible program that provides communities
with resources to address a wide range of unique community development needs. The CDBG
entitlement program allocates annual grants to larger cities and urban counties, on a
noncompetitive basis, to develop viable communities by providing decent housing, a suitable
living environment, and opportunities to expand economic opportunities, principally for low- and
moderate-income persons. The entitlement program receives 70 percent of the annual funding
allocation. Cities and counties that do not meet the criteria to receive funds as entitlement
grantees participate in the CDBG program on a competitive basis through the state in which they
are located. The nonentitlement program receives 30 percent of the annual funding allocation.

There are five Community Planning and Development (CPD) field offices within Region III.
They are Philadelphia (covers eastern Pennsylvania and all of Delaware), Pittsburgh (covers
western Pennsylvania and all of West Virginia), Baltimore (covers Maryland), Richmond (covers
Virginia), and Washington, DC (covers Washington, DC). HUD provided CDBG funds totaling
nearly $797 million to 107 grantees in Region III on an entitlement basis in fiscal years 2007 and
2008. The following chart provides details.

                                     Fiscal year 2007         Fiscal year 2008
                Field office             funding                  funding        Two-year total
               Philadelphia1          $174,523,428             $168,639,007       $343,162,435
                 Pittsburgh           $ 82,474,328             $ 79,614,601       $162,088,929
                Baltimore1            $ 56,098,857             $ 76,938,015       $133,036,872
                Richmond              $ 61,989,899             $ 59,840,783       $121,830,682
              Washington, DC          $ 18,767,297             $ 18,033,221       $ 36,800,518
                   Total              $393,853,809             $403,065,627       $796,919,436

The field offices are responsible for their jurisdictions and operate independently of each other
within the guidelines provided. Each field office performs an annual risk assessment for the
CDBG entitlement program grantees to identify candidates for monitoring using risk analysis
factors such as financial, physical, management, satisfaction, and services. In addition,
subfactors such as dollar value, complexity of programs, number of programs administered, and
compliance issues are critical in determining those grantees defined as high risk.

Our audit objective was to determine whether the Philadelphia and Baltimore field offices
adequately monitored their CDBG program grantees to ensure that they used their grant funds to
assist low- and moderate-income families through eligible activities according to HUD
requirements.

1
    We performed our work at the Philadelphia and Baltimore offices.

                                                          4
                                RESULTS OF AUDIT

Finding: The Philadelphia and Baltimore CPD Field Offices Did Not
Adequately Document Their Monitoring of CDBG Program Grantees
The Philadelphia and Baltimore CPD field offices did not properly maintain documentation to
demonstrate that their monitoring was complete and did not notify grantees of findings and
concerns identified during on-site monitoring within the required time limit. These conditions
occurred because monitoring officials did not follow established monitoring policy and
procedures to document monitoring reviews completely and notify grantees of monitoring results
within the required time limit. The cost of not adequately documenting monitoring can be
substantial and potentially embarrassing, especially when HUD seeks to take enforcement
actions that are challenged by the grantee. When HUD does not inform grantees of its
monitoring findings and concerns in a timely manner, it runs the risk of having the grantee
expend funds inappropriately. Further, proper monitoring will become even more critical as a
result of the significant increase in grantee funding provided under the Neighborhood
Stabilization program and the American Recovery and Reinvestment Act of 2009 (Recovery
Act).



 Monitoring Was Properly
 Based on Risk Assessments


              The Philadelphia and Baltimore field offices based their monitoring on risk
              assessments performed on 51 grantees for fiscal years 2007 and 2008 as required.
              The field offices created annual work plans and an individual monitoring strategy
              for each grantee selected for monitoring. Our review of the monitoring files for
              13 grantees that received $67.9 million (appendix A) showed that the monitoring
              teams identified findings and concerns during their on-site monitoring visits at
              eight of the 13 grantees. In addition, for all 13 grantees, we found at least some
              documentation to show that the field offices performed a review to determine the
              grantees’ compliance with timely funds expenditure requirements and that the
              field offices properly followed up on recommended corrective action to address
              findings and concerns, which they communicated to the grantee in their
              monitoring letters.

              Monitoring is the principal means by which HUD ensures that programs and
              technical areas are carried out efficiently, effectively, and in compliance with
              applicable laws and regulations; assists program grantees in improving their
              performance, developing or increasing capacity, and augmenting their
              management and technical skills; and stays abreast of the efficacy of CPD-
              administered programs and technical areas within the communities that these

                                                5
           programs serve. Regulations at 24 CFR 570.900(a)(1) require HUD to at least
           annually conduct reviews and audits to determine whether recipients have carried
           out their activities in a timely manner, have carried out those activities and their
           certifications in accordance with the requirements and the primary objectives of
           the Act and other applicable laws, and have continued capacity to carry out those
           activities in a timely manner.

Monitoring Conclusions Were
Not Always Supported by
Proper Documentation

           Monitoring officials did not always maintain appropriate documentation to
           support their conclusions. HUD Handbook 6509.2, REV-5, chapter 2-14(C)5,
           requires each CPD field office to document its monitoring of grantees by
           obtaining and completing monitoring exhibits, which are similar to checklist
           questionnaires, with any supporting documentation obtained during the
           monitoring such as but not limited to contracts, budget forms, grantee policies,
           and work write-ups to be attached to the appropriate exhibit and clearly labeled,
           indicating what they are and what part of the monitoring they support. Chapter 2-
           14(A) of the handbook also requires all monitoring conclusions to be supported
           and all correspondence, documentation, and working papers relating to the
           monitoring and conclusions to be maintained in the official field office files. For
           the CDBG program, there are about 40 different monitoring exhibits used to
           monitor various program requirements. The combination of exhibits needed to
           monitor a grantee depends on the mix of activities in that grantee’s action plan.
           However, in the monitoring files for 7 of the 13 grantees (54 percent) reviewed,
           there were instances in which answers to some exhibit questions were not
           supported by documentation copied or reviewed by the monitoring official during
           the monitoring review when they should have been. For example, below are
           questions from monitoring exhibits that required documentation to support the
           monitoring official’s conclusions.




                                             6
           The monitoring officials did not obtain appropriate documentation to support the
           conclusions drawn. The exhibit questions shown above required the monitoring
           official to perform an analysis to determine whether costs were reasonable and
           whether ineligible activities were funded. Thus, an independent analysis should
           be performed by the monitoring official to demonstrate whether the grantee is
           carrying out its activities in accordance with HUD requirements. However, it
           appears as though the monitoring officials relied on explanations provided by the
           grantee rather than determining whether the grantee maintained the
           documentation necessary to demonstrate that the costs were reasonable and
           whether ineligible activities were assisted. Monitoring officials need to obtain
           and maintain documentation to support their conclusions as required.
           Documentation preserves valuable results, both positive and negative. The cost to
           HUD of not maintaining such documentation is substantial and potentially
           embarrassing, especially when HUD seeks to take enforcement actions that are
           challenged by the grantee.

Monitoring Officials Did Not
Answer All Questions and Did
Not Use Required Forms

           Monitoring officials did not always provide answers to monitoring questions and
           did not use required forms to document summary information. HUD Handbook
           6509.2, REV-5, chapter 1-7, requires that exhibits in the handbook be used. All
           monitoring conclusions and exhibit questions must be clearly answered, to which
           includes providing answers to all “Yes/No/N/A” boxes and the “basis for
           conclusion” text box to prevent confusion regarding the determinations made by
           the monitoring official. However, in the monitoring files for 7 of 13 grantees
           reviewed (54 percent), the monitoring official did not answer all of the questions
           or include summary information regarding the monitoring that was needed to
           complete the exhibit (see appendix B). The following are examples from
           monitoring exhibits in which the monitoring official did not answer the question
           or provide the basis for conclusion:




                                            7
           Further, none of the monitoring files for all 13 grantees reviewed (100 percent)
           contained evidence that the monitoring officials used the required monitoring
           summary form. The form is used to document the exit conference including key
           information such as the names and titles of the attendees, the grantee’s
           agreement/disagreement with the monitoring results, and the basis of any
           objections to the results.

The Field Offices Did Not
Inform Grantees of Monitoring
Results within the Required
Timeframe


           In 10 of 13 monitoring reviews (77 percent), the field offices did not send the
           monitoring letters to the grantee within the required time period (see appendixes
           B and C). HUD Handbook 6509.2, REV-5, chapter 2-10, requires the field
           offices to send a monitoring letter to the grantee within 45 days after completion
           of monitoring. The purpose of the monitoring letter is to communicate the
           monitoring results, in sufficient detail, to clearly describe the areas that were
           covered during the monitoring review, the basis for the conclusions drawn, and
           provide opportunities for the grantee to demonstrate that it has complied with

                                            8
            requirements within the time prescribed by the field office. For the 10 instances
            noted, the number of elapsed days before the monitoring letter was sent to the
            grantee ranged from 66 to 213 days after the on-site monitoring was completed.
            On average, the monitoring letters were sent 128 days, or more than four months,
            after the on-site monitoring was completed. The following paragraphs describe
            examples of findings and concerns that the field offices did not communicate to
            the grantee in a timely manner:

                   The Philadelphia field office sent a monitoring letter to a grantee 186 days
                   after it completed the on-site monitoring. In the letter, the field office
                   presented three findings concerning the grantee’s lack of documentation to
                   demonstrate that it complied with eligibility and national objective
                   requirements for three activities.

                   The Baltimore field office sent a monitoring letter to a grantee 213 days
                   after it completed the on-site monitoring. In the letter, the field office
                   informed the grantee that it had cleared a finding concerning the timing of
                   income eligibility determination based on a letter that it received from the
                   grantee stating the corrective actions that it planned to take. In the letter,
                   the field office also notified the grantee of concerns regarding its (1) lack
                   of grievance procedures for beneficiary dispute resolution for its housing
                   rehabilitation program, (2) need to update its systems and procedures
                   manual, and (3) lack of consistency in prevailing rate calculations.

Field Offices Need to Follow
Established Procedures


            The field offices did not adequately document their monitoring because the
            monitoring officials did not follow established monitoring policy and procedures
            detailed in HUD’s Community Planning and Development Monitoring Handbook
            (Handbook 6509.2, REV-5), and they lacked a quality assurance control to ensure
            compliance. The handbook contains adequate policy and procedures for
            monitoring a grantee’s performance. Monitoring officials should be aware of the
            monitoring requirements in the handbook. A lack of a quality assurance control
            also contributed to this condition. Neither field office had developed and
            implemented an internal quality control procedure to ensure that monitoring
            conclusions were supported by documentation, all monitoring questions were
            answered, and the monitoring results were communicated to grantees within
            established timeframes. The Philadelphia CPD Director stated that his office’s
            ability to complete monitoring timely was affected by challenges such as
            voluminous workload, decrease in staff and the associated loss of institutional
            knowledge, competing priorities, and the complexity of the grant programs which
            require consultation with headquarters regarding programmatic issues. The
            Baltimore CPD Director stated that the primary reason for the lateness of the
            letters was a lack of supervisory emphasis on completing the task. In addition,

                                             9
           this Director also stated that using the monitoring exhibit checklists had made
           monitoring a much more time-consuming practice with very little payoff in terms
           of staff performance.

           The field office Directors need to reemphasize to their staffs the importance of
           following established monitoring procedures in HUD Handbook 6509.2, REV-5,
           and develop and implement a quality assurance control to ensure that staff
           performs the monitoring according to the handbook. Monitoring is the principal
           means by which HUD ensures that programs are carried out efficiently,
           effectively, and in compliance with applicable laws and regulations.

The Field Offices Took Some
Action to Improve Their
Monitoring

           The field office Directors acknowledged that their monitoring could be improved
           and informed us of some actions that they took to improve it. The Philadelphia
           field office held a four-hour on-site training session for the staff in September
           2008 to discuss the policies and procedures of HUD Handbook 6509.2, REV-5.
           A senior management analyst from the Office of the Assistant Secretary for
           Community Planning and Development conducted the training and provided
           feedback on 17 monitoring letters and reports and 81 exhibits that the office had
           uploaded into the monitoring database. The feedback addressed process and
           technical improvements including examples and suggestions to sufficiently
           document the monitoring of grantee performance. During the audit, the Baltimore
           field office Director revised a locally-developed report that the office used as a
           tool to track annual monitoring. The field office Director added a column to the
           report listing the date by which the office needed to send the monitoring letter to
           the grantee to comply with the 45-day requirement.

Effective Monitoring Will Be
More Critical in the Future

           The results presented in this audit report raise concern over the field offices’
           ability to effectively monitor their CPD programs going forward, given the
           significant increase in workload that will occur due to the infusion of funds into
           CPD programs resulting from the Neighborhood Stabilization program and the
           Recovery Act. States, cities, and counties in Region III are scheduled to receive
           more than $531 million under the Neighborhood Stabilization program and the
           Recovery Act. HUD is providing funds under these initiatives to acquire and
           redevelop foreclosed properties that might otherwise become sources of
           abandonment and blight within their communities, stabilize and revive local
           neighborhoods and housing markets with heavy concentrations of foreclosed
           properties, and assist vulnerable families who are on the brink of homelessness or

                                           10
             have recently become homeless. The field office staffs will be engaged
             simultaneously with implementing and managing larger CPD programs and
             monitoring grantees for compliance with more stringent obligation, expenditure,
             and reporting requirements in addition to compliance with other program
             regulations.

Conclusion

             The Philadelphia and Baltimore CPD field offices did not properly maintain
             documentation to demonstrate that their monitoring was complete and did not
             notify grantees of findings and concerns identified during on-site monitoring
             within the required time limit. This occurred because field offices did not
             adequately follow established HUD monitoring policy and procedures, and lacked
             a quality assurance control to ensure compliance. The cost of not adequately
             documenting monitoring can be substantial and potentially embarrassing,
             especially when HUD seeks to take enforcement actions that are challenged by
             the grantee. When HUD does not inform grantees of its monitoring findings and
             concerns in a timely manner, it runs the risk of having the grantee expend funds
             inappropriately. Proper monitoring will become even more critical in the future
             due to the significant increase in funds that HUD will provide to grantees under
             the Neighborhood Stabilization program and the Recovery Act.


Recommendations


             We recommend that the Philadelphia and Baltimore CPD field office Directors

             1A.    Reemphasize to their staffs the importance of following established
                    monitoring procedures to ensure that

                       All correspondence, documentation, and work papers relating to the
                       monitoring and conclusions are maintained in the official monitoring
                       files;
                       Monitoring officials use the required monitoring exhibits;
                       Monitoring officials answer all of the questions and fill in all of the text
                       boxes in the monitoring exhibits; and
                       Staffs prepare and send notification of the monitoring results to the
                       grantees within the required 45-day time limit.

             1B.    Develop and implement a written quality assurance procedure and/or
                    mechanism to ensure that monitoring conclusions are appropriately
                    supported by complete documentation and that monitoring letters are
                    submitted to grantees within the 45-day requirement.


                                              11
                        SCOPE AND METHODOLOGY

We performed our audit at the HUD Philadelphia, Pennsylvania, and Baltimore, Maryland, CPD
field offices from September 2008 through April 2009. The audit covered the field offices’
monitoring activities during the period October 2006 through September 2008. We expanded the
scope of the audit as necessary. We included tests of internal controls that we considered
necessary. We used computer-processed data only in conjuction with other supporting
documents to reach our conclusions, and we determined that the data were sufficiently reliable
for our purposes. We traced hard-copy records back to data contained in HUD’s computer
databases, and nothing came to our attention to suggest that the computer-processed data were
materially inaccurate or misleading.

To determine whether the Philadelphia and Baltimore field offices adequately monitored their
CDBG program grantees to ensure that they used their grant funds to assist low- and moderate-
income families through eligible activities according to HUD requirements, we

       Reviewed regulations pertaining to the CDBG program, including 24 CFR 570; HUD
       Handbook 6509.2, REV-5; and CPD Notice 07-07.

       Conducted interviews with the Philadelphia and Baltimore field office Directors and
       staff.

       Obtained and reviewed listings of the Philadelphia and Baltimore entitlement grantees
       and the CDBG funding they received during the audit period.

       Obtained and reviewed risk assessments, desk reviews, and/or on-site monitoring reviews
       performed by the Philadelphia and Baltimore field offices during the audit period.

       Reviewed the files for the 13 CDBG entitlement grantees monitored by the Philadelphia
       and Baltimore field offices between October 2006 and September 2008. We selected the
       Philadelphia and Baltimore field offices for review because during fiscal years 2007 and
       2008, 51 entitlement grantees within their jurisdiction received CDBG funds totaling
       $476.2 million. This amount represented 60 percent of the total CDBG funding allocated
       within Region III for the period. We reviewed the completed monitoring files for all 13
       grantees for which the Philadelphia and Baltimore field offices performed on-site
       monitoring during fiscal years 2007 and 2008. Those 13 grantees received $67.9 million
       of the $476.2 million (14 percent) in CDBG funds allocated within the jurisdiction of the
       field offices.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.


                                              12
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following controls are achieved:

       Program operations,
       Relevance and reliability of information,
       Compliance with applicable laws and regulations, and
       Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.



 Relevant Internal Controls


              We determined that the following internal controls were relevant to our audit
              objective:

                      Policies and procedures that management implemented to reasonably ensure
                      that CDBG program monitoring complied with HUD requirements.

                      Policies and procedures that management implemented to ensure that risk
                      assessments identified activities that represented the greatest vulnerability to
                      fraud, waste, and mismanagement.

                      Policies and procedures that management implemented to ensure that
                      grantees used their grant funds to assist low- and moderate-income
                      families through eligible activities.

              We assessed the relevant controls identified above.

              A significant weakness exists if management controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.


 Significant Weakness

              Based on our review, we believe that the following item is a significant weakness:


                                                 13
The Philadelphia and Baltimore field offices did not have controls to
ensure that CDBG program monitoring complied with HUD requirements
and that the intended objectives were met.




                       14
                               APPENDIXES

Appendix A

                       GRANTEES REVIEWED


                                                                   CDBG funding
                                Date of on-site     Responsible    for fiscal years
           Grantee            monitoring review     field office   2007 and 2008
  Philadelphia, PA            March 10-14, 2008     Philadelphia     $51,734,740
  Lancaster County, PA      September 17-21, 2007   Philadelphia     $ 3,328,250
  New Castle County, DE       March 26-30, 2007     Philadelphia     $ 2,447,599
  Anne Arundel County, MD     March 12-14, 2007      Baltimore       $ 2,175,387
  Dauphin County, PA           May 12-16, 2008      Philadelphia     $ 1,495,700
  Cumberland County, PA         June 2-4, 2008      Philadelphia     $ 1,345,344
  Howard County, MD          June 27-July 3, 2008    Baltimore       $ 1,158,318
  Harford County, MD           July 18-20, 2007      Baltimore       $ 1,089,692
  Hagerstown, MD             February 20-23, 2007    Baltimore       $ 962,490
  Lebanon, PA                  June 9-12, 2008      Philadelphia     $ 830,442
  Bristol Township, PA        August 26-29, 2008    Philadelphia     $ 661,294
  Annapolis, MD                March 4-6, 2008       Baltimore       $ 339,698
  Salisbury, MD               August 26-28, 2008     Baltimore       $ 298,632
  Total                                                              $67,867,586




                                       15
Appendix B

                     SCHEDULE OF DEFICIENCIES


                                     Number of
                            Was                                               Did CPD
                                        days     Did CPD         Did CPD
                        monitoring                                            maintain
                                      between   completely        use the
                           letter                                          documentation
      Grantee                        monitoring fill out the    monitoring
                         provided                                            to support
                                        and     monitoring      summary
                         within 45                                           monitoring
                                     monitoring exhibits?         form?
                           days?                                            conclusions?
                                       letter
                           HUD                                    HUD
                                                    HUD
                         Handbook                               Handbook        HUD
                                                 Handbook
                          6509.2,                                6509.2,     Handbook
      Reference                                6509.2, REV-
                          REV-5,                                 REV-5, 6509.2, REV-5,
                                                5, section 2-
                        section 2-10                            section 2- section 2-7C3
                                                     7C3
                                                                   7D
   Hagerstown, MD           N          213           N              N            Y
    Annapolis, MD           N          203           N              N            N
 Anne Arundel County,
                            N          197           N              N           Y
          MD
Cumberland County, PA       N          188            Y             N            Y
   Philadelphia, PA         N          186            Y             N            N
New Castle County, DE       N          178            N             N            Y
     Lebanon, PA            N          154            Y             N            Y
 Howard County, MD          N           88            N             N            N
 Bristol Township, PA       N           70            Y             N            Y
 Harford County, MD         N           66            N             N            N
  Dauphin County, PA        Y           44            Y             N            N
 Lancaster County, PA       Y           43            Y             N            N
    Salisbury, MD           Y           32            N             N            N
  Total “no” answers     10 of 13                  7 of 13       13 of 13     7 of 13
                          77%                       54%           100%         54%
 Average number of                     128
       days




                                           16
Appendix C

                 FINDINGS AND CONCERNS NOT REPORTED
                            WITHIN 45 DAYS




                                                                                                                             Cumberland County, PA


                                                                                                                                                                        New Castle County, DE
                                                                                                      Anne Arundel County,




                                                                                                                                                                                                                                  Bristol Township, PA
                                                                                                                                                                                                                                                         Harford County, MD
                                                                                                                                                                                                              Howard County, MD
                                                                     Hagerstown, MD




                                                                                                                                                     Philadelphia, PA
                                                                                      Annapolis, MD




                                                                                                                                                                                                Lebanon, PA
                                                           Grantee




                                                                                                      MD
    Number of days                                                   213 203 197 188 186 178 154 88 70 66
    Lack of documentation for eligibility                                            X,X          X
    Lack of documentation for national objectives                                     X          X,X
    Notice not provided to owners before acquisition of their
                                                                                                                                                                                                X
    properties
    Incomplete eligibility documentation                                                                                                                                                        X             X                                          X
    Grantee did not submit SF 2722 to HUD                                                                                                                                                                                                                X
    Grantee not following federal procurement
                                                                                                                                                                                                                                  X
    requirements
    Grantee not maintaining race and ethnicity data                                   X                    X
    Lack of loan servicing procedures                                                                                                                                                                                                                    X
    Lack of a cost allocation plan                                                                                                                                                                                                                       X
    Lack of time records for staff working multiple
                                                                                                                                                                                                                                                         X
    programs
    Lack of documentation to demonstrate monitoring of                                                                                                                            X
    subrecipient
    Lack of procedures for housing rehabilitation program            X                X
    Systems and procedures manual outdated                           X
    Lack of consistency in prevailing rate calculations              X
    Subrecipient provided notices that were confusing                                                                                                                                           X
    Lack of organizational chart                                                                                                                                                                                                                         X
    Financial information inaccurately reported in IDIS 3                                                                                                                                                                                                X
    Lack of documentation for national objectives                                                                            X
    Grantee does not have a pool of licensed and qualified
                                                                                      X
    rehabilitation contractors
    Lack of evidence to demonstrate monitoring of
                                                                                                                             X
    subrecipient
      Findings4        Concerns4


2
  SF 272 - Federal Cash Transactions Report.
3
  IDIS - Integrated Disbursement and Information System. IDIS is a real-time, mainframe-based computer
application that enables grantees to draw down program funds and report on their activities.
4
  According to HUD Handbook 6509.2, REV-5, chapter 2-10, findings must include condition, criteria, cause, effect,
and required corrective action. Concerns should include condition, cause, and effect. Corrective actions are not
required for concerns.

                                                         17
Appendix D

             AUDITEE COMMENTS




                    18
19