Audit Might Cause City to Repay Grants
Following last month's release of an audit of Albuquerque's Community Development Block Grant program, the US Department of Housing and Urban Development's Office of Inspector General is saying the city might have to pay back nearly $3 million in grant funds. The city’s CDBG program is administered by the Department of Family and Community Services. The CDBG program provides communities with extra resources to address unique community development needs. According to the audit, which covered the years between 2013 and 2015, those in charge of Albuquerque's program “did not have the capacity to implement an effective grant administration.” The audit found that the city had contracted with a higher bidder on at least one occasion, passing over significantly lower bids. It also discovered that the city used nearly $573,000 in CDBG funds to purchase a building that was not used exclusively for CDBG activities. Two conflicts of interest were also uncovered by auditors that weren't properly documented by the city. The first was the employment of City Councilor Klarissa Peña as vice president of communications and government relations for Youth Development Inc., a contractor that received CDBG funds. The other case involved a failure by Family and Community Services Director Douglas Chaplin to disclose that a board member of the developer who was awarded a contract to redevelop a city site with CDBG-Recovery Act funds was his brother-in-law. The report found $1.83 million in ineligible costs it says must be repaid and an additional $1.1 million if the city is unable to provide required documentation. The city is contesting $1.1 million of that. The OIG is asking that the local HUD office extend the city’s designation as a “high risk grantee for an additional year to allow the city the opportunity to continue administering its CDBG program to Albuquerque residents.” The local HUD office has six months to respond.