Finding Text
Non-Material Non‐Compliance
Significant Deficiency, Special Tests and Provisions
Criteria: In accordance with 24 CFR section 58.22, CDBG funds (and local funds to be
reimbursed with CDBG funds) cannot be obligated or expended before receipt of HUD’s approval
of a Request for Release of Funds (RROF) and environmental certification except for exempt
activities under 24 CFR section 58.34 and categorically excluded activities under section 58.35 (b).
Condition: The City did not follow procedures to ensure the proper HUD approval of a Request for
Release of Funds was obtained.
Context: Of the CDBG expenditures during the fiscal year, there was 1 project that required
HUD’s approval of the RROF and environmental certification. We noted that proper environmental
certification was obtained, however the RROF was not. Upon further review, the project was
deemed eligible for reimbursement.
Effect: CDBG project might not be eligible to receive reimbursement for expenditures.
Cause: Lack of proper internal control over HUD approvals.
Questioned Cost: This resulted in no questioned costs.
Recommendation: Management should implement controls to ensure that HUD approvals are
obtained timely.
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this
finding. Please refer to the Corrective Action Plan section of this report.