oversight

Boulder County, CO, Generally Approved Its Grants and Procured Consultants in Accordance With Applicable Federal Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2016-09-28.

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

           Boulder County, Boulder, CO
              Community Development Block Grant
                     Disaster Recovery




Office of Audit, Region 8       Audit Report Number: 2016-DE-1003
Denver, CO                                      September 28, 2016
To:            Aaron B. Gagné, Director, Office of Community Planning and Development,
               8AD


               //signed//
From:          Ronald J. Hosking, Regional Inspector General for Audit, 8AGA
Subject:       Boulder County, CO, Generally Approved Its Grants and Procured Consultants in
               Accordance With Applicable Federal Requirements




Attached is the U.S. Department of Housing and Urban Development (HUD), Office of Inspector
General’s (OIG) final results of our review of Boulder County.
HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.
The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at 913-
551-5870.
                   Audit Report Number: 2016-DE-1003
                   Date: September 28, 2016

                   Boulder County, CO, Generally Approved Its Grants and Procured
                   Consultants in Accordance With Applicable Federal Requirements



Highlights

What We Audited and Why
We audited Boulder County because it is a significant recipient of the State of Colorado’s more
than $320 million Community Development Block Grant Disaster Recovery grant, having
received grants of more than $6 million. Our audit objective was to determine whether Boulder
County approved its grants and procured consultants in accordance with applicable Federal
requirements.

What We Found
Boulder County generally approved its grants and procured consultants in accordance with
applicable Federal requirements. The CDBG-funded projects reviewed were generally eligible,
and consultants were properly procured.

What We Recommend
This report contains no recommendations.
Table of Contents
Background and Objective......................................................................................3

Results of Audit ........................................................................................................4
         Finding 1: The County Generally Approved Its Grants and Procured Consultants
         in Accordance With Applicable Federal Requirements ................................................ 4

Scope and Methodology ...........................................................................................5

Internal Controls ......................................................................................................6

Appendix ...................................................................................................................7
         A. Auditee Comments and OIG’s Evaluation ............................................................... 7




                                                             2
Background and Objective
Boulder County, CO, is home to almost 300,000 residents and includes some of the most diverse
natural landscapes and sustainable development along the Front Range. The County seat is in
Boulder. Located in north-central Colorado, northwest of Denver, the County’s landscape includes
several dense urban centers surrounded by rural buffer zones and mountain communities, plus
portions of Rocky Mountain National Park. Boulder County is made up of 741 square miles and is
on the eastern slope of the Rocky Mountains. The elevation ranges from approximately 5,000 to
14,000 feet.
The 2013 Colorado floods had a catastrophic impact on the State, with unprecedented rainfall
impacting 24 counties, causing the evacuation of more than 18,000 people. In September 2013, the
entire Front Range of Colorado was hit by rainfall amounts over 5 days that neared totals for annual
precipitation. More than 17 inches of rain fell in Boulder County, impacting the entire County.
Access to the town of Lyons was cut off by the surging of St. Vrain Creek, and the communities of
Estes Park, Jamestown, Loveland, Drake, Longmont, Glen Haven, Greeley, and Evans were among
many other areas severely impacted.
The Boulder County Community Development Block Grant Disaster Recovery (CDBG-DR) staff is
located at the Boulder County Flood Rebuilding and Permitting Information Center in Boulder. The
staff is mainly composed of County employees, with assistance from some housing authority
employees. The program area under review is the CBDG-DR grant. In response to presidentially
declared disasters, Congress may appropriate additional funding for the CDBG program as CDBG-
DR grants to rebuild the affected areas and provide crucial seed money to start the recovery process.
Since CDBG-DR assistance may fund a broad range of recovery activities, the U.S. Department of
Housing and Urban Development (HUD) can help communities and neighborhoods that otherwise
might not recover due to limited resources. CDBG-DR grants often supplement disaster programs
of the Federal Emergency Management Agency, the Small Business Administration, and the U.S.
Army Corps of Engineers.
The funds were provided by Public Law 113-2, Disaster Relief Appropriations Act, 2013. There
were three rounds of grants issued to the State of Colorado totaling $320 million. We observed
Boulder County as a subgrantee with round 1 grants totaling more than $6 million for rehabilitation,
home access, temporary rental assistance, infrastructure, clearance and demolition, property
acquisition, planning, and capacity building.
Our audit objective was to determine whether Boulder County approved its grants and procured
consultants in accordance with applicable Federal requirements.




                                                  3
Results of Audit

Finding 1: The County Generally Approved Its Grants and
Procured Consultants in Accordance With Applicable Federal
Requirements
Boulder County generally approved its grants and procured consultants in accordance with
applicable Federal requirements. The CDBG-funded projects reviewed were generally eligible,
and consultants were properly procured.
CDBG Projects Were Generally Eligible
We reviewed 15 files for compliance with Boulder County policies, the State action plan, and
HUD grant and program requirements. These files represent all rehabilitation assistance
awarded through May 2015.

We reviewed each file to determine whether
   Applicant income and assets were reviewed to qualify as low or moderate income.
   CDBG-DR duplicated benefits of other disaster recovery assistance.
The projects reviewed generally complied with those requirements.
Consultants Were Properly Procured
We reviewed the two consultant agreements charged to the CDBG-DR grants and found that the
consultants were properly procured. Boulder County’s procurement policies complied with 24
CFR (Code of Federal Regulations) 85.36. These agreements extended existing contracts
received immediately after the disaster, which we also reviewed.
Recommendations
There are no recommendations.




                                               4
Scope and Methodology
We performed our audit work between June and September 2015 at 1301 Spruce Street, Boulder,
CO. Our audit period generally covered September 1, 2013, through May 30, 2015, and was
expanded as necessary.
To accomplish our objective, we

      Reviewed Public Laws 112-55 and 113-2, the Stafford Act, applicable portions of the
       Code of Federal Regulations, Federal Register notices, and Office of Management and
       Budget circulars;
      Reviewed the applicable HUD guidance and Office of Community Planning and
       Development notices, the State’s action plans and CDBG-DR policies, and Boulder
       County’s written policies and procedures for CDBG-DR;
      Interviewed HUD’s Denver Office of Community Planning and Development’s
       management and staff;
      Interviewed State of Colorado CDBG-DR staff;
      Interviewed Boulder County CDBG-DR staff;
      Reviewed prior State of Colorado monitoring reviews;
      Toured the disaster area to observe conditions facing victims and Boulder County;
      Reviewed Boulder County CDBG-DR files; and
      Reviewed procurement and consultant contracts.

Our audit focused on the County’s CDBG-DR grant awards for rehabilitation and temporary
rental assistance through May 2015 as well as procurement policies and general internal controls.
We reviewed 100 percent of the files with rehabilitation awarded through May 2015. The
amounts approved for award in these 15 case files totaled $553,315 in CDBG-DR assistance. Of
the approved assistance, $188,736 (34 percent of our universe) was not funded because one
recipient rejected funding and one was switched to another funding source.
We selected the rehabilitation and temporary rental assistance programs because the other
County programs had not yet awarded CDBG-DR grant money at the start of our audit. We also
reviewed the two consultant agreements charged to the CDBG-DR grants. We did not rely on
computer-generated data as audit evidence or to support our audit conclusions. We primarily
used data from Boulder County’s case files and procurement files to meet our audit objective.
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(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




                                                5
Internal Controls
Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

   Effectiveness and efficiency of operations,
   Reliability of financial reporting, and
   Compliance with applicable laws and regulations.
Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls 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:

   Controls over the County’s CDBG-DR program award process and procurement.
We assessed the relevant controls identified above.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, the
reasonable opportunity to prevent, detect, or correct (1) impairments to effectiveness or
efficiency of operations, (2) misstatements in financial or performance information, or (3)
violations of laws and regulations on a timely basis.
We evaluated internal controls related to the audit objective in accordance with generally
accepted government audit standards. Our evaluation of internal controls was not designed to
provide assurance regarding the effectiveness of the internal control structure as a whole.
Accordingly, we do not express an opinion on the effectiveness of the County’s internal controls.




                                                  6
Appendix A
                         Auditee Comments and OIG’s Evaluation


The auditee chose not to have an exit conference or provide written comments since there were
no significant findings. Minor deficiencies and solutions will be communicated in a separate
letter to management.




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