Finding Text
Finding No.: 2025-006 Identification of the federal program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) AL Program: 14.225 CDBG - Entitlement Grants Cluster Federal Award No.: B19ST660001, B20ST660001, B21ST660001, B22ST660001, B23ST660001, B24ST660001 Area: Special Tests and Provisions – Rehabilitation Criteria or specific requirement (including statutory, regulatory or other citation): 24 CFR 570.506(a) states: Each recipient shall establish and maintain sufficient records to enable the Secretary to determine whether the recipient has met the requirements of this part. At a minimum, the following records are needed: (a) Records providing a full description of each activity assisted (or being assisted) with CDBG funds, including its location (if the activity has a geographical locus), the amount of CDBG funds budgeted, obligated and expended for the activity, and the provision in subpart C under which it is eligible. 24 CFR 570.506(b)(10) states: For each activity determined to aid in the prevention or elimination of slums or blight based on the elimination of specific conditions of blight or physical decay not located in a slum or blighted area: (i) A description of the specific condition of blight or physical decay treated; and (ii) For rehabilitation carried out under this category, a description of the specific conditions detrimental to public health and safety which were identified and the details and scope of the CDBG assisted rehabilitation by structure. Condition: For one rehabilitation project tested, totaling $133,052, the recipient did not maintain adequate supporting documentation—such as pre-rehabilitation inspection reports or assessment records—to substantiate the procedures performed in identifying conditions of blight or physical decay. As a result, there was insufficient evidence to support the basis for determining the existence of such conditions or to demonstrate the completeness of the rehabilitation needs identified for the project structure, as required under applicable CDBG recordkeeping requirements. Finding No.: 2025-006, continued Cause: GHURA does not have formal oversight controls for project documentation and assigned project personnel, including the absence of formal procedures requiring the preparation and retention of pre-rehabilitation inspection reports or assessment records. Effect or potential effect: GHURA is in noncompliance with applicable requirements. Questioned Costs: $133,052 Identification as a repeat finding: Not applicable. Recommendation: Management should implement formal procedures to ensure pre-rehabilitation inspections are performed, documented, and retained to support the identified scope of work. Management should improve supervisory review controls to verify that project files contain adequate documentation demonstrating compliance with CDBG recordkeeping requirements prior to approval and funding. Views of Responsible Officials: Management partially concurs with the finding. Refer to Management’s position as outlined in the Corrective Action Plan. Conclusion: Management submitted additional information on June 28, 2026; however, due to time constraints, we were unable to sufficiently corroborate and evaluate the documentation provided. Accordingly, the finding remains, as there was insufficient evidence to support a determination of compliance as of the audit date.