Federal Reports

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We audited the City of Fresno’s Community Development Block Grant (CDBG) program. We selected the City based on prior findings identified by the U.S. Department of Housing and Urban Development (HUD) and continuing issues with the program. The objective of the audit was to determine whether the City administered its CDBG funds in accordance with HUD requirements, focusing on code enforcement, antigraffiti, and after school program activities; monitoring; and program income.The City did not administer its program in accordance with HUD requirements. Specifically it (1) did not meet HUD’s code enforcement requirements, (2) spent CDBG funds on general government expenses, (3) did not ensure that one program met a CDBG national objective, (4) did not properly monitor its subrecipient or City departments, (5) used its entitlement funds before its program income, and (6) did not report program income to HUD in a timely manner. This condition occurred because the City (1) lacked the capacity and experience to administer and implement the program, (2) did not have adequate procedures and controls in place, and (3) disregarded HUD requirements. As a result, it used CDBG funds for $163,555 in ineligible costs and more than $7.9 million in unsupported costs and put $428,373 at risk over the next year of similar questionable use.We recommend that the Acting Director of HUD’s San Francisco Office of Community Planning and Development require the City to (1) repay the program $163,555 from non-Federal funds, (2) support the eligibility of more than $7.9 million in CDBG costs or repay the program from non-Federal funds, (3) suspend funding to its code enforcement program until it can show that it has implemented controls, addressed its capacity issues, and understands and abides by HUD requirements, (4) implement policies and procedures to ensure that $428,373 in CDBG funds is used in accordance with program requirements, and (5) provide training

The Plan identifies the products OIG intends to issue during the specified time frame. The list of products reflects what we can reasonably accomplish with theavailable resources, and we recognize that work of more immediate concern may arise requiring us to adjust our priorities.

TrailBlazer Health Enterprises, LLC (TrailBlazer), understated the Medicare segment pension assets by $1.2 million as of April 30, 2013. In addition, TrailBlazer understated Medicare's share of the Medicare segment excess pension assets by $1.2 million as of April 30, 2013, as a result of the Medicare segment closing.

TrailBlazer Health Enterprises, LLC, did not claim $4.3 million of allowable Medicare pension costs on its Final Administrative Cost Proposals for fiscal years 2005 through 2011.

Head Start grantees are required to have Single Audits conducted in accordance with the Office of Management and Budget Circular A 133 (also known as A-133 audits) for fiscal years beginning before December 26, 2014. The Administration for Children and Families (ACF) had a process in place to ensure that (1) it responded in a timely manner to Head Start grantees' A 133 audit findings by issuing management decisions on those findings within the required 6 months and (2) Head Start grantees took corrective action on A-133 audit findings. Specifically, for Region IX Head Start grantees (located in Arizona, California, Hawaii, and Nevada) that submitted audit reports to the Federal Audit Clearinghouse, ACF resolved recurring audit findings in accordance with Federal requirements and ACF policies and procedures. Accordingly, this report contains no recommendations.