Audit 409938

Assistance Listing, Federal Agency, and Program Name - ALN 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant Federal Award Identification Number and Year - B-20-MC-26-0033, B-21-MC-26-0033, B-22-MC-26-0033, B-23-MC-26-0033, B-24-MC-26-0033, B-25-MC-26 0033 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes (2025-001) Criteria - 24 CFR 570.506(b)(9)(ii) requires the Township to prepare and maintain a prerehabilitation inspection report describing the deficiencies to be rehabilitated for residential properties. Condition - We noted no formal evidence that the stated control to ensure performance of required inspections prior to contract approval had been implemented effectively in one instance. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During testing of eleven rehabilitation projects, we noted that management was unable to provide evidence that a review took place over the preinspection for one project. However, the required inspections took place at the appropriate time as evidenced by detailed notes left by the township representative charged with carrying out rehabilitation projects. Cause and Effect - The lack of documentation of an inspection performed that identified work to be performed prior to contract approval could result in questioned costs if the need for the rehabilitation work could not be substantiated. Recommendation - We recommend the Township implement controls to ensure a formal inspection report is prepared prior to approval of all rehabilitation contracts, including contracts for deficiencies identified after the initial prerehabilitation inspection process is complete. We also recommend implementing controls to ensure a review of ongoing rehabilitation projects occurs at a minimum on a monthly basis to ensure that required inspections are performed. Views of Responsible Officials and Corrective Action Plan - Staff will review folders at various stages of the project to ensure all records of inspections at both the beginning and end of the project are in the file. Staff have already set up either biweekly or monthly meetings (depending on project activity levels) to report on the status of ongoing projects. These meetings were intended to help staff keep current projects in line with the overall project budget (i.e., not obligating funds beyond what is available). Using these same meetings to check project files for all necessary records will be an adjustment of negligible effort.