Ryan Hagen, Staff Writer
Posted: 10/18/2012 07:29:49 PM PDT
SAN BERNARDINO – A survey of the city’s use of Community Development Block Grant funds has escalated into a full audit by the U.S. Department of Housing and Urban Development.
HUD’s initial look uncovered “potential issues requiring review under a full audit,” which typically takes four to six months, according to an Oct. 10 letter by Tanya Schulze, regional inspector general for audit with the department’s Los Angeles office.
“As discussed in our June 20, 2012 notification letter, we initiated an audit of the City of San Bernardino’s CDBG and CDBG-R activities to determine if the city’s CDBG and CDBG-R expenditures were eligible and supported and whether the city reported its program income in accordance with regulations,” Schulze wrote.
Members of the city staff and a citizen committee review proposals for how to spend CDBG money, which for the 2012-13 fiscal year totaled $2.8million, according to May 7 staff report. The City Council then approves the spending.
The May 7 report recommends spending about $500,000 each on administrative costs, a loan to finance economic development and housing rehabilitation, fire leases, parks and recreation and street light replacement, with an additional $401,000 divided among 39 nonprofit organizations and $48,898 for the fire cadet/Explorer program.
The city did not program any CDBG-R funds – which stands for Community Development Block Grant-Recovery – for 2012-13, according to program manager Brandon Mims.
The city is cooperating with the audit, which covers program years 2009, 2010, 2011 and 2012, Mims said.
“Audits, monitoring and reporting are components of the grant process,” said Mims, who has worked for the city since October 2011. “The city welcomes the opportunity to identify and correct any issues the auditors may find as they complete the full audit.”
The June 20 notification date is nearly a month before the city first authorized a bankruptcy filing, and City Attorney James F. Penman said there were signs the department was concerned with the city’s records before that.
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