Purpose of Audit

The purpose of our audit was to evaluate the Town’s financial management of the Community Development Block Grant (CDBG) program for the period January 1, 2012 through October 7, 2013.

Background

The Town of Bolivar is located in Allegany County and has a population of approximately 2,200. The Town Board consists of five elected members including the Town Supervisor. The Town was awarded a $400,000 New York State Community Development Block Grant (CDBG), and contracted with Cuba Community Development Corporation (CCDC) to provide administration and program delivery services.

Key Findings

• A significant number of discrepancies from the CCDC contract were identified, as well as the unauthorized diversion of Town grant funds.
• The CCDC overpaid itself $3,000. In addition, several contractors were not paid, or were underpaid or overpaid, for work they had performed.
• The Board did not develop or implement procedures to track CDBG funding and document how the grants were spent and that the intended objectives and outcomes were accomplished.
• The CCDC submitted 31 invoices totaling $288,968 for work not yet performed.
• Payments to contractors by the CCDC averaged 21 days after receiving funds from the town.

Key Recommendations

• Refrain from contracting with the CCDC for the administration of future CDBG grants. Request proposals from firms that can be relied upon to provide accurate claims and project documentation, and ensure that the Town is in strict compliance with federal grant requirements.
• Recover the $3,000 diverted by the CCDC as well as obtain from the CCDC sufficient funds to pay contractors for all completed work.
• Establish formal procedures to monitor the performance of outside entities retained to administer the Town’s CDBG funds.
• Require that only claims for completed work be submitted for approval and payment.
• Issue checks directly to the contractors for Board-approved claims.