oversight

The City of Utica, New York, Has the Capacity to Administer Lead-Based Paint Funds Provided Under the American Recovery and Reinvestment Act of 2009

Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-12-22.

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

                                                        U. S. Department of Housing and Urban Development
                                                                                 Office of Inspector General
                                                                                 New York/New Jersey Office
                                                                               26 Federal Plaza – Room 3430
                                                                                  New York, NY 10278-0068



                                                                 MEMORANDUM NO. 2010-NY-1801

December 22, 2009

MEMORANDUM FOR: Jon L. Gant, Director, Office of Healthy Homes and Lead Hazard
                                          Control, L
                //SIGNED//
FROM:           Edgar Moore, Regional Inspector General for Audit, New York/New Jersey, 2AGA


SUBJECT:        The City of Utica, New York, Has the Capacity to Administer Lead-Based Paint
                Funds Provided Under the American Recovery and Reinvestment Act of 2009


                                            INTRODUCTION

We conducted a review of the City of Utica, New York’s (City) administration of its lead-based
paint hazard control program. On April 15, 2009, the U.S. Department of Housing and Urban
Development (HUD) awarded the City $2.04 million under the American Recovery and
Reinvestment Act of 2009 (Recovery Act) to carry out lead-based paint hazard control activities
in privately owned homes. The U.S. Office of Management and Budget directed the inspectors
general to perform audits to ensure that funds provided under the Recovery Act are used for their
intended purposes. Our objective was to determine whether the City had the capacity in the area
of internal controls, eligibility, financial controls, procurement, and output/outcomes to
effectively administer its lead hazard control program funds provided under the Recovery Act in
accordance with applicable requirements.

There are no recommendations in this report. Should you or your staff have any questions,
please contact Karen Campbell, Assistant Regional Inspector General for Audit, at (212) 542-
7977.

                                  METHODOLOGY AND SCOPE

To gain an understanding of the City’s administration of its lead hazard control program, we
reviewed applicable laws, regulations, and HUD program requirements. In addition, we
reviewed the City’s procurement policy, conducted interviews with City personnel to gain an
understanding of the internal controls, and tested the system of controls to determine whether the
controls were functioning as intended. We also analyzed project files and records at the offices



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of the subrecipient contracted by the City to implement its lead hazard grant awarded under the
Recovery Act.

We performed our on-site work from August through September 2009 at the City’s and
subrecipient’s offices located in Utica, NY. For this capacity report, our work was not
conducted in accordance with generally accepted government auditing standards. Under the
Recovery Act, inspectors general are expected to be proactive and focus on prevention; thus, this
report is significantly reduced in scope.


                                        BACKGROUND

On February 17, 2009, the President signed the Recovery Act. As part of the Recovery Act,
Congress appropriated $100 million to the lead hazard control program administered by HUD’s
Office of Healthy Homes and Lead Hazard Control. Of this amount, $99.5 million was awarded
under four grant programs: (1) Lead-Based Paint Hazard Control, (2) Lead Hazard Reduction
Demonstration Grant, (3) Healthy Homes Demonstration Grant, and (4) Healthy Homes
Technical Studies Grant. The grants were to be awarded to applicants who had applied under the
Lead Hazard Reduction Program notices of funding availability for fiscal year 2008 and were
found to be qualified for an award, but were not given a grant because of funding limitations.
The City was awarded $2.04 million in Federal funding under the Lead-Based Paint Hazard
Control Program. The City plans to use the funds to identify and control lead-based paint
hazards in eligible privately owned rental or owner-occupied housing.


                                    RESULTS OF REVIEW

The City has the capacity in the areas of internal controls, eligibility, financial controls,
procurement, and output/outcomes to effectively administer its lead hazard grant funds provided
under the Recovery Act in accordance with applicable requirements. Specifically, the City has
adequate internal control procedures pertaining to accounting controls, staffing levels, personnel
operating policies, monitoring of subrecipients, procurement of goods and services, and
establishment of program guidelines that comply with HUD requirements. In addition, a recent
HUD monitoring review disclosed no major problems with the City’s lead-based paint program.
The City is planning to use its Recovery Act funds on eligible activities that meet the objectives
of the program and the Recovery Act.

1. Adequate Policies and Procedures Governing the City’s Operations

  Review of the City’s policies and procedures disclosed that the City has an adequate
  personnel policy in place for all employees and an adequate procurement policy that complies
  with HUD requirements. The City also has established adequate procedures to monitor it’s
  subrecipient of lead hazard grant funds and is maintaining adequate documentation to
  demonstrate that it is monitoring the activities of its subrecipient. Further, the City has
  established program guidelines and a detailed lead grant procedures manual for its lead hazard
  program.

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2. Adequate Staffing

  The City has adequate staff to implement its lead hazard program activities. The City
  administers its lead hazard program through its Department of Urban and Economic
  Development. It has identified a core group of employees within the department’s
  Community Planning and Economic Development Office who will be responsible for program
  administration and financial oversight. In addition, the City has retained the services of the
  former director of community development as a consultant, who will be responsible for
  ensuring that all requirements and conditions of the lead grant agreement are met.

3. Planned Activities Eligible Under Program Guidelines

  At the time of our review, the City’s subrecipient had a list of 24 properties that were
  determined to be qualified for funding under the lead grant. We selected five of the qualified
  properties and reviewed their project files to determine whether the activities were eligible
  and supported by appropriate documentation. Our review found that all of the five project
  files contained the required intake documentation in accordance with the City’s policies and
  procedures and HUD requirements. For each of the five properties, (1) risk assessments by a
  licensed lead-based paint assessor had been performed, (2) lead hazards had been identified,
  and (3) the scope of work statement addressed the lead hazards identified in the risk
  assessment.

4. No Major Problems Affecting Capacity Disclosed in Audited Financial Statements

  The City’s independent public auditor issued an unqualified opinion on the City’s financial
  statement for the years ending March 31, 2007, and March 31, 2008. The audit reports did not
  disclose any issues that would affect the City’s capacity to implement its Recovery Act
  program activities.

5. Established Procurement Policies and Procedures

  We reviewed the documentation related to the consultant and subrecipient contracts awarded
  by the City under the lead hazard grant to determine whether the City followed its
  procurement policy and HUD’s procurement regulation. The City followed its procurement
  policy and HUD requirements related to both of the contracts.

6. No Problems Affecting Capacity Disclosed in HUD Monitoring Review

  HUD completed a monitoring review of the City’s HOME Investment Partnerships Program
  in June 2008. The scope of HUD’s on-site monitoring review included a compliance review
  of lead-based paint regulations and was conducted at the offices of the subrecipient contracted
  by the City to implement its 2009 Lead Hazard Reduction Demonstration Grant. There were
  no findings or concerns related to the lead-based paint segment of HUD’s review.

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                                       CONCLUSION

The City has the capacity to effectively administer lead hazard grant funds provided to it under
the Recovery Act according to applicable program requirements. Moreover, the City is planning
to use its Recovery Act funds on eligible activities that meet the objectives of the program and
the Recovery Act.

                                   RECOMMENDATIONS

Since we did not identify any deficiencies, there are no recommendations.




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                                                                                  City of Utica
                                                              Urban and Economic Development
                                                         1Kennedy Plaza, Utica, New York 13502


David R. Roefaro                                                             Robert D. Sullivan
Mayor                                                                        Commissioner


November 30, 2009

Edgar Moore
Regional Inspector General for Audit
       New York/New Jersey, 2AGA
U.S. Dept. of Housing and Urban Development
Office of Inspector General
26 Federal Plaza – Room 3430
New York, NY 10278-0068

Dear Mr. Moore:

We are in receipt of the positive I.G. audit review of the City of Utica, NY’s administration of its
lead-based paint hazard control program with funding provided under the American Recovery
and Reinvestment Act of 2009.

We appreciate the report that the City has the capacity to administer the lead funds, and look
forward to a successful conclusion of the lead hazard control grant. COMMENT 1

Sincerely,

//signed//
Robert D. Sullivan
Commissioner




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                         OIG Evaluation of Auditee Comments

Comment 1   Officials for the City are appreciative of the positive audit review and are looking
            forward to a successful conclusion of the lead hazard control grant.




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