Audit 362863

Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.

Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.

Allowable Costs Questioned Costs: $36,420 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance (UG), governs most federal grants. Section 403 of Part 200 sets forth the allowability provisions for allowable costs, including that they be adequately documented. Condition: The City-Parish contracted with a certain vendor for two separate services under two separate contracts; one for event planning services for the Summer of Hope and one to manage and develop a youth workforce training program. The youth workforce contract services were to be performed for 3 months, at the same time as those for the Summer of Hope planning. The contract called for monthly payments to be made upon submission of invoices with adequate supporting documentation including an invoice, and/or monthly progress reports with summaries of tasks, and/or receipts, timesheets or consultant hours. Three invoices for payment of youth workforce development services totaling $36,420, contained only an invoice with no monthly progress reports or timesheets indicating activities performed. When contracts run simultaneously, this level of detail of activities, or lack thereof, may be considered inadequate documentation. This same vendor received shipments of merchandise purchased on a City-Parish purchase card as described in finding 2024-001. The contract is not clear on the party that is to bear the cost of this merchandise. Universe/ Population: The City-Parish paid for goods and services from approximately 160 contracted vendors as part of the SLFR program. Certain vendors were selected for audit procedures based on various of criteria. Effect: The City-Parish may not have properly enforced the terms of the contract prior to payment. Cause: Improper execution and design of established internal controls. Recommendation: Individuals involved with administering and monitoring grants and contracts should require all documentation be received from the vendor to ensure compliance with the contract prior to funds’ disbursement. View of Responsible Officials: The City-Parish transitioned the administration of the SLFR grant in the first quarter of 2025; therefore, we are unable to obtain direct clarification if there was other supporting documentation obtained but not included with the invoice. Moving forward, more detailed documentation will be required to substantiate payments and services rendered.

Procurement, Suspension and Debarment Questioned Costs: $1,071,477 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Purchases made from federal grants must follow the procurement standards of Title 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). The Louisiana State public bid law must also be followed, which requires purchases of equipment greater than $60,000 should be made using the sealed bid method. Condition: The City-Parish purchased police vehicles in the amount $1,071,477 without undergoing the bid process. Universe/ Population: Seventeen contracts totaling $13,644,485 were subjected to compliance testing. Two contracts totaling $1,071,477 were found to be noncompliant. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance and the Louisiana State public bid law with respect to this purchase. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. View of Responsible Officials: The Purchasing Director for the City-Parish has the authority as provided by the Code of Ordinances to approve emergency purchases upon review of the certification of the emergency by the user department. At the beginning of 2024, the Baton Rouge Police Department noted its patrol units were in less than standard conditions and a recent Police Academy graduating class of sworn officers compounded the need for viable units. At the same time, a nationwide supply chain crisis limited the availability of vehicles for purchase. Multiple quote requests from vendors across Louisiana confirmed a lack of available inventory including the Louisiana State Contract vendor as well as a piggyback contract for the Jefferson Parish Sheriff’s Office. After an exhaustive search, a single vendor was located who had an inventory of matching vehicles on hand for offer within a limited time frame. In an effort to not compromise public safety, an emergency purchase was utilized which was signed by both the Police Chief and the Purchasing Director. As required, notice was given by publishing in the newspaper. Final Auditor Comments: While the views above cite local ordinances, state statutes still apply and give definition to situations that qualify as an emergency. The conditions under which the purchase was made may not qualify as an emergency, as defined by La R.S. 38:2211. Furthermore, La R.S. 38:2212 requires the emergency to be certified by the public entity. Louisiana Legislative Auditor’s published legal guidance indicates that this certification is to be taken through a public meeting. There was no certification of the emergency in a public meeting.

Subrecipient Monitoring Questioned Costs: $961,671 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: According to the Uniform Guidance, subrecipients of federal funds must be monitored by the primary grant recipient to ensure compliance with federal statues, regulations and terms of the subaward. Condition: The City-Parish loaned $961,671 of SLFR funds in 2023 to a subrecipient under a loan agreement for $6,000,000 to develop affordable housing. The terms of the loan agreement call for the subrecipient to be in default of the agreement if progress is not made on the development according to a progress schedule contained in the loan agreement. According to the progress schedule, substantial completion was to occur in 2024 with initial occupancy in early 2025. The development has not progressed according to schedule, and no action has been taken to either amend the agreement or place the subrecipient/borrower into default. Universe/ Population: Of 8 subrecipients of the SLFR program, 6 were selected for testing. Of those selected, 1 subrecipient was found to be lacking with regard to monitoring. Effect: Untimely subrecipient monitoring could lead to City-Parish responsibility or liability for funds disbursed. Cause: While monitoring did occur in alignment with the development’s monitoring plan, the project did not progress to any new milestones in 2024 that would have triggered a draw request or submission of new monitoring documentation. According to the existing monitoring plan specified in the loan agreement, documentation requirements are structured around distinct project phases (Pre-construction, Construction, and Affordability) and correlate directly with milestone-based progress and payment requests. Since the developer did not submit any draw requests during this period or further progress on milestones, no additional monitoring documentation was required. This monitoring structure, based on milestone completion and cost reimbursement, meant that no new compliance checks or verifications were formally required in 2024 - despite informal oversight discussions and concerns about the project’s overall progress and viability. Going forward, enhanced formal documentation and escalation procedures will be implemented when material schedule deviations occur, even in the absence of payment activity, should the project proceed. Recommendation: The City-Parish should address the delayed status of the development and the impacts to compliance with the loan agreement. Actions such as amendments to the agreement or placement into default should be considered and executed. View of Responsible Officials: The City-Parish acknowledges that the development has not progressed in accordance with the schedule outlined in the original loan agreement with the developer for the Scotlandville Housing Development. At the time of the 2023 disbursement, documentation provided by the developer supported project readiness and anticipated completion timelines; however, subsequent review and monitoring activities identified delays tied to financing, site control, and design completion. At present, the administration is evaluating if it wants to proceed with the project and what contract amendments would be stipulated. The Office of Community Development, working alongside its grant management consultant CSRS, recently initiated a detailed review of the project status and supporting documentation. This review culminated in the identification of potential deficiencies, including unresolved site control issues and the need for updated construction plans. An updated site plan, ownership verification, environmental remediation documentation, and full construction package are being actively pursued, and the developer has been provided a prioritized list of immediate action items to remedy outstanding issues if the project is going to proceed. To bring the project and agreement into compliance, the corrective actions noted below are actively being pursued. These corrective actions are intended to either return the project to a viable status under the existing agreement or establish the necessary conditions to invoke appropriate default provisions should remediation fail. These corrective actions include: Formal reassessment of project viability with CSRS, OCD, and project leadership, including a meeting scheduled for the week of July 1, 2025; Issuance of a formal notice to the developer requesting documentation of progress and corrective actions related to site control, tax clearance, design completion, and permitting; Evaluation of amendment or enforcement actions under the agreement, including potential restructuring of the loan timeline or initiating default proceedings if satisfactory progress is not demonstrated by mid-Q3 2025; Preparation of an updated commitment letter from the current administration to support the developer’s financial closing, contingent on demonstrated progress and documentation clearance, if the administration chooses to move forward with the project.

Allowable Costs Questioned Costs: $53,585 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance, governs the use of most federal grants. Those regulations require that costs be adequately documented and be reasonable and necessary. SLFR funds expended under the lost revenue category as described by the US Treasury’s Final Rule must be used for a government purpose. Condition: The City-Parish used SLFR funds to pay for certain P-card purchases that lacked documentation as to business purpose or invoice support (see finding 2024-001). Without the context of business purpose, the costs of $53,585 are difficult to assess for reasonableness and government purpose. Universe/ Population: These costs were part of the City-Parish’s Crime/Violence Prevention program whose total costs were approximately $3.2 million in 2024. $975,000 of these costs were subjected to allowable cost testing. Effect: The costs charged to the SLFR Program may be unallowable. Cause: Improper execution and implementation of internal controls. Recommendation: Program administrators should exercise discretion when incurring costs to be charged to a federal program to ensure that costs are reasonable, necessary and properly documented. View of Responsible Officials: The City-Parish transitioned the administration of the SLFR grant in the first quarter of 2025; therefore, we are unable to obtain direct clarification on the supporting documentation and reasonableness of the youth camps and travel costs. Moving forward supporting documentation will be attached to all P-card transactions as well as documentation to support the public purpose.

Allowable Activities & Costs, Procurement Questioned Costs: $737,375 and Subrecipient Monitoring Department of Health and Human Services 93.493 Community Funded Projects (BRIGHT) Grant No(s): H79FG000907 Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance (UG), governs the use of most federal grants. Those regulations require that costs adhere to the terms and conditions of the grant, that costs be reasonable and necessary and subjected to a system of internal controls. Purchases of goods and services under $250,000 but greater than $10,000 should be made by obtaining quotations from an adequate number of vendors, and by consolidating purchases when economical. Subrecipients should be monitored. Condition: The City-Parish was awarded the grant for the purpose of establishing and running 5 trauma centers in Baton Rouge. However, while some of the grant costs were directed toward violence, drug abuse and counseling services, a significant portion could not be directly connected to a formally established trauma center. A significant portion of the grant funds paid for gathering type events, movie nights, fitness camps and activities of the Summer of Hope. The services were procured among approximately 30 vendors with contracts ranging from $10,000 to $160,900 which may have resulted in price inefficiencies. No evidence was provided that price quotations were obtained for the 17 vendors with contracts exceeding $10,000. Many of these same vendors were also contracted for services through the City-Parish’s Crime/Violence prevention sub-program funded through the State and Local Fiscal Recovery grant program. Two of the vendors were also hired for additional services not under formal contract; one to provide a movie day for $10,000 and one for $10,000 for health education and wellness promotional events. One subrecipient was employed by the grant program and it was not properly monitored. Finally, we noted charges from two vendors that appeared to duplicate charges made to SLFR grant program. Separate invoices submitted by each vendor for servicing family and youth showed time charges billed for the same dates and times that were previously billed to and paid by the SLFR program. The total duplicated charges total $46,045. Universe/ Population: As substantial portion of the Program’s costs, activities, and compliance requirements were subjected to testing among the various areas of the Compliance Supplement. The questioned costs represent the known questioned costs among the various compliance areas. Effect: The City-Parish is non-compliant with the Uniform Guidance and Program regulations. Without price comparisons, executed contracts, and appropriate monitoring of vendors and subrecipients, the City-Parish may have paid more than was necessary for the services procured. Cause: Improper design and implementation of internal controls over grants compliance. The persons administering the program may not have been properly trained in grants management and compliance. Recommendation: Internal controls should be established at all levels to ensure compliance. Only those trained in grants administration and Uniform Guidance should be placed in the role of program administrators. Views of Responsible Officials: The City-Parish transitioned the administration of the BRIGHT grant in the first quarter of 2025; therefore, we are unable to obtain some supporting documentation. The City-Parish provided documentation that a change in the project plan/scope from running five trauma centers to a variety of services based on needs and accessibility as opposed to confining them to centers was approved by the grantor agency through the programmatic reports which allowed expenses for gathering events, fitness camps, and activities for the Summer of Hope. This grant period ended September 27, 2024. Final Auditor Comments: Approval for the change in scope of activities should come by way of an amendment to the grant agreement signed by both parties.

Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.

Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.

Allowable Costs Questioned Costs: $36,420 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance (UG), governs most federal grants. Section 403 of Part 200 sets forth the allowability provisions for allowable costs, including that they be adequately documented. Condition: The City-Parish contracted with a certain vendor for two separate services under two separate contracts; one for event planning services for the Summer of Hope and one to manage and develop a youth workforce training program. The youth workforce contract services were to be performed for 3 months, at the same time as those for the Summer of Hope planning. The contract called for monthly payments to be made upon submission of invoices with adequate supporting documentation including an invoice, and/or monthly progress reports with summaries of tasks, and/or receipts, timesheets or consultant hours. Three invoices for payment of youth workforce development services totaling $36,420, contained only an invoice with no monthly progress reports or timesheets indicating activities performed. When contracts run simultaneously, this level of detail of activities, or lack thereof, may be considered inadequate documentation. This same vendor received shipments of merchandise purchased on a City-Parish purchase card as described in finding 2024-001. The contract is not clear on the party that is to bear the cost of this merchandise. Universe/ Population: The City-Parish paid for goods and services from approximately 160 contracted vendors as part of the SLFR program. Certain vendors were selected for audit procedures based on various of criteria. Effect: The City-Parish may not have properly enforced the terms of the contract prior to payment. Cause: Improper execution and design of established internal controls. Recommendation: Individuals involved with administering and monitoring grants and contracts should require all documentation be received from the vendor to ensure compliance with the contract prior to funds’ disbursement. View of Responsible Officials: The City-Parish transitioned the administration of the SLFR grant in the first quarter of 2025; therefore, we are unable to obtain direct clarification if there was other supporting documentation obtained but not included with the invoice. Moving forward, more detailed documentation will be required to substantiate payments and services rendered.

Procurement, Suspension and Debarment Questioned Costs: $1,071,477 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Purchases made from federal grants must follow the procurement standards of Title 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). The Louisiana State public bid law must also be followed, which requires purchases of equipment greater than $60,000 should be made using the sealed bid method. Condition: The City-Parish purchased police vehicles in the amount $1,071,477 without undergoing the bid process. Universe/ Population: Seventeen contracts totaling $13,644,485 were subjected to compliance testing. Two contracts totaling $1,071,477 were found to be noncompliant. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance and the Louisiana State public bid law with respect to this purchase. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. View of Responsible Officials: The Purchasing Director for the City-Parish has the authority as provided by the Code of Ordinances to approve emergency purchases upon review of the certification of the emergency by the user department. At the beginning of 2024, the Baton Rouge Police Department noted its patrol units were in less than standard conditions and a recent Police Academy graduating class of sworn officers compounded the need for viable units. At the same time, a nationwide supply chain crisis limited the availability of vehicles for purchase. Multiple quote requests from vendors across Louisiana confirmed a lack of available inventory including the Louisiana State Contract vendor as well as a piggyback contract for the Jefferson Parish Sheriff’s Office. After an exhaustive search, a single vendor was located who had an inventory of matching vehicles on hand for offer within a limited time frame. In an effort to not compromise public safety, an emergency purchase was utilized which was signed by both the Police Chief and the Purchasing Director. As required, notice was given by publishing in the newspaper. Final Auditor Comments: While the views above cite local ordinances, state statutes still apply and give definition to situations that qualify as an emergency. The conditions under which the purchase was made may not qualify as an emergency, as defined by La R.S. 38:2211. Furthermore, La R.S. 38:2212 requires the emergency to be certified by the public entity. Louisiana Legislative Auditor’s published legal guidance indicates that this certification is to be taken through a public meeting. There was no certification of the emergency in a public meeting.

Subrecipient Monitoring Questioned Costs: $961,671 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: According to the Uniform Guidance, subrecipients of federal funds must be monitored by the primary grant recipient to ensure compliance with federal statues, regulations and terms of the subaward. Condition: The City-Parish loaned $961,671 of SLFR funds in 2023 to a subrecipient under a loan agreement for $6,000,000 to develop affordable housing. The terms of the loan agreement call for the subrecipient to be in default of the agreement if progress is not made on the development according to a progress schedule contained in the loan agreement. According to the progress schedule, substantial completion was to occur in 2024 with initial occupancy in early 2025. The development has not progressed according to schedule, and no action has been taken to either amend the agreement or place the subrecipient/borrower into default. Universe/ Population: Of 8 subrecipients of the SLFR program, 6 were selected for testing. Of those selected, 1 subrecipient was found to be lacking with regard to monitoring. Effect: Untimely subrecipient monitoring could lead to City-Parish responsibility or liability for funds disbursed. Cause: While monitoring did occur in alignment with the development’s monitoring plan, the project did not progress to any new milestones in 2024 that would have triggered a draw request or submission of new monitoring documentation. According to the existing monitoring plan specified in the loan agreement, documentation requirements are structured around distinct project phases (Pre-construction, Construction, and Affordability) and correlate directly with milestone-based progress and payment requests. Since the developer did not submit any draw requests during this period or further progress on milestones, no additional monitoring documentation was required. This monitoring structure, based on milestone completion and cost reimbursement, meant that no new compliance checks or verifications were formally required in 2024 - despite informal oversight discussions and concerns about the project’s overall progress and viability. Going forward, enhanced formal documentation and escalation procedures will be implemented when material schedule deviations occur, even in the absence of payment activity, should the project proceed. Recommendation: The City-Parish should address the delayed status of the development and the impacts to compliance with the loan agreement. Actions such as amendments to the agreement or placement into default should be considered and executed. View of Responsible Officials: The City-Parish acknowledges that the development has not progressed in accordance with the schedule outlined in the original loan agreement with the developer for the Scotlandville Housing Development. At the time of the 2023 disbursement, documentation provided by the developer supported project readiness and anticipated completion timelines; however, subsequent review and monitoring activities identified delays tied to financing, site control, and design completion. At present, the administration is evaluating if it wants to proceed with the project and what contract amendments would be stipulated. The Office of Community Development, working alongside its grant management consultant CSRS, recently initiated a detailed review of the project status and supporting documentation. This review culminated in the identification of potential deficiencies, including unresolved site control issues and the need for updated construction plans. An updated site plan, ownership verification, environmental remediation documentation, and full construction package are being actively pursued, and the developer has been provided a prioritized list of immediate action items to remedy outstanding issues if the project is going to proceed. To bring the project and agreement into compliance, the corrective actions noted below are actively being pursued. These corrective actions are intended to either return the project to a viable status under the existing agreement or establish the necessary conditions to invoke appropriate default provisions should remediation fail. These corrective actions include: Formal reassessment of project viability with CSRS, OCD, and project leadership, including a meeting scheduled for the week of July 1, 2025; Issuance of a formal notice to the developer requesting documentation of progress and corrective actions related to site control, tax clearance, design completion, and permitting; Evaluation of amendment or enforcement actions under the agreement, including potential restructuring of the loan timeline or initiating default proceedings if satisfactory progress is not demonstrated by mid-Q3 2025; Preparation of an updated commitment letter from the current administration to support the developer’s financial closing, contingent on demonstrated progress and documentation clearance, if the administration chooses to move forward with the project.

Allowable Costs Questioned Costs: $53,585 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) (COVID-19) Grant No(s): N/A Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance, governs the use of most federal grants. Those regulations require that costs be adequately documented and be reasonable and necessary. SLFR funds expended under the lost revenue category as described by the US Treasury’s Final Rule must be used for a government purpose. Condition: The City-Parish used SLFR funds to pay for certain P-card purchases that lacked documentation as to business purpose or invoice support (see finding 2024-001). Without the context of business purpose, the costs of $53,585 are difficult to assess for reasonableness and government purpose. Universe/ Population: These costs were part of the City-Parish’s Crime/Violence Prevention program whose total costs were approximately $3.2 million in 2024. $975,000 of these costs were subjected to allowable cost testing. Effect: The costs charged to the SLFR Program may be unallowable. Cause: Improper execution and implementation of internal controls. Recommendation: Program administrators should exercise discretion when incurring costs to be charged to a federal program to ensure that costs are reasonable, necessary and properly documented. View of Responsible Officials: The City-Parish transitioned the administration of the SLFR grant in the first quarter of 2025; therefore, we are unable to obtain direct clarification on the supporting documentation and reasonableness of the youth camps and travel costs. Moving forward supporting documentation will be attached to all P-card transactions as well as documentation to support the public purpose.

Allowable Activities & Costs, Procurement Questioned Costs: $737,375 and Subrecipient Monitoring Department of Health and Human Services 93.493 Community Funded Projects (BRIGHT) Grant No(s): H79FG000907 Criteria: Title 2 CFR Part 200, commonly referred to as the Uniform Guidance (UG), governs the use of most federal grants. Those regulations require that costs adhere to the terms and conditions of the grant, that costs be reasonable and necessary and subjected to a system of internal controls. Purchases of goods and services under $250,000 but greater than $10,000 should be made by obtaining quotations from an adequate number of vendors, and by consolidating purchases when economical. Subrecipients should be monitored. Condition: The City-Parish was awarded the grant for the purpose of establishing and running 5 trauma centers in Baton Rouge. However, while some of the grant costs were directed toward violence, drug abuse and counseling services, a significant portion could not be directly connected to a formally established trauma center. A significant portion of the grant funds paid for gathering type events, movie nights, fitness camps and activities of the Summer of Hope. The services were procured among approximately 30 vendors with contracts ranging from $10,000 to $160,900 which may have resulted in price inefficiencies. No evidence was provided that price quotations were obtained for the 17 vendors with contracts exceeding $10,000. Many of these same vendors were also contracted for services through the City-Parish’s Crime/Violence prevention sub-program funded through the State and Local Fiscal Recovery grant program. Two of the vendors were also hired for additional services not under formal contract; one to provide a movie day for $10,000 and one for $10,000 for health education and wellness promotional events. One subrecipient was employed by the grant program and it was not properly monitored. Finally, we noted charges from two vendors that appeared to duplicate charges made to SLFR grant program. Separate invoices submitted by each vendor for servicing family and youth showed time charges billed for the same dates and times that were previously billed to and paid by the SLFR program. The total duplicated charges total $46,045. Universe/ Population: As substantial portion of the Program’s costs, activities, and compliance requirements were subjected to testing among the various areas of the Compliance Supplement. The questioned costs represent the known questioned costs among the various compliance areas. Effect: The City-Parish is non-compliant with the Uniform Guidance and Program regulations. Without price comparisons, executed contracts, and appropriate monitoring of vendors and subrecipients, the City-Parish may have paid more than was necessary for the services procured. Cause: Improper design and implementation of internal controls over grants compliance. The persons administering the program may not have been properly trained in grants management and compliance. Recommendation: Internal controls should be established at all levels to ensure compliance. Only those trained in grants administration and Uniform Guidance should be placed in the role of program administrators. Views of Responsible Officials: The City-Parish transitioned the administration of the BRIGHT grant in the first quarter of 2025; therefore, we are unable to obtain some supporting documentation. The City-Parish provided documentation that a change in the project plan/scope from running five trauma centers to a variety of services based on needs and accessibility as opposed to confining them to centers was approved by the grantor agency through the programmatic reports which allowed expenses for gathering events, fitness camps, and activities for the Summer of Hope. This grant period ended September 27, 2024. Final Auditor Comments: Approval for the change in scope of activities should come by way of an amendment to the grant agreement signed by both parties.