oversight

                                                        U.S. Department of Housing and Urban Development
                                                                           Wanamaker Building, Suite 1005
                                                                                     100 Penn Square East
                                                                              Philadelphia, PA 19107-3380

                                                                         District Inspector General for Audit




April 13, 1998

                                                                           Audit Related Memorandum
                                                                           No. 98-PH-241-1803


MEMORANDUM FOR:                  Lynn Daniels, Director of Community Planning and Development
                                       Division, Pittsburgh Area Office, 3ED



FROM:            Edward F. Momorella, District Inspector General for Audit,
                       Mid-Atlantic, 3AGA


SUBJECT:         City of Sharon
                 Survey of CDBG Program
                 Sharon, Pennsylvania


Based on a citizen complaint we surveyed the operation of the City of Sharon’s CDBG Program.
The purpose of the survey was to review the City’s administration of the CDBG Program, pursue
the complainant’s allegations, and determine whether further audit work was necessary.

We interviewed Community Planning and Development staff, reviewed field office files, the City’s
latest IPA audit report, and Grantee Performance Report. We visited the City and interviewed
City staff, and the complainant. We reviewed meetings of minutes, interviewed contractors and
loan recipients, and performed on-site physical inspections of CDBG work performed.

The complainant alleged that HUD funds received by the City were improperly used and have
disappeared. We interviewed the complainant who was unable to produce specific leads or
documentation to support the allegations. The complainant was upset with the City because an
application for a rehabilitation loan was determined not eligible. Further the complainant applied
for rehabilitation loans for owned rental properties, but refused to provide the City income data
on tenants.




Visit the Office of Inspector General’s World Wide Web site at http://www.hud.gov/oig/oigindex.html
Transaction tests were performed in the following areas:

       •     Procurement
       •     Public improvements
       •     Home rehabilitation

Independent Public Accountant audits and annual GPR submissions to the field office identify that
all funds received by the City are accounted for. Field office staff advised us they had no concerns
or outstanding issues relative to the City’s CDBG Program.

Our review identified that the City’s rehabilitation loan application required additional pertinent
information, and should be amended to include the applicant’s signature, social security number,
and date. Our recommendation was brought to the attention of the Assistant Program Director
for implementation.

Based on our review, we have concluded that the complainant’s allegations were not justified, and
no additional audit work is currently necessary.

A copy of this memorandum was provided to the City.

If you have any questions please contact Irving I. Guss, Assistant District Inspector General for
Audit at (215) 656-3401.

Attachment - Distribution

cc:    Oswald
       Cianci

      3AGA:GUSS:AMP:04/10/98
      Correspondence Code
                                3AGA
      Concurrence               GUSS
      Date




                                                 2
                                                                   Attachment

DISTRIBUTION


Secretary’s Representative, Mid-Atlantic, 3AS
Internal Control & Audit Resolution Staff, 3AFI
Director of Community Planning & Development, Pittsburgh Area Office, 3ED
Area Coordinator, Pittsburgh Office, 3ES
Asst to the Deputy Secretary for Field Mgmt, SDF (Room 7106)
ALO, Community Planning & Development, DG (Room 7214)
Chief Financial Officer, F (Room 10164)
Deputy Chief Financial Officer for Finance, FF (Room 10164)
Deputy Secretary, SD (Room 10100)
Asst Secretary for Community Planning & Development, D (Room 7100)
Asst Secretary for Congressional and Intergovernmental Relations, J (Room 10120)
Deputy Asst Sec for Public Affairs, W (Room 10220)
Chief of Staff, S (room 10000)
Counselor to the Secretary, S (room 10234)
Senior Advisor to the Secretary for Community Policy, S (Room 10222)
Acting, Assistant to the Secretary for Labor Relations, SL (Room 7118)
Associate General Counsel Office Of Assisted Housing & Community Development, CD (Room
8162)
Acting General Counsel, CB (Room 10214)
Director, Housing and Community Development Issue Area, U.S. GAO, 441 G Street, NW,
Room 2474, Washington, DC 20548
Ranking Member, Committee on Governmental Affairs, US Senate, Washington, DC 20515
Chairman, Committee on Government Affairs, US Senate, Washington, DC 20515
Government Reform and Oversight Committee, Congress of the US, House of Representatives,
Washington, DC 20510
Chairman, Committee on Government Reform and Oversight, House of Representatives,
Washington, DC 20515
Subcommittee on General Oversight and Investigations, Room 212, O’Neill House Ofc Bldg,
Washington, DC 20515
Executive Director, Dept of Community Development, City of Sharon, 155 W. Connelly Blvd,
Sharon, PA 16146




                                           3