Community Planning and Development (CPD) grantees and subrecipients endeavor to meet program requirements as they use grant funds for housing and community development activities. While carrying out program activities should be the main focus, grantees must remember that documentation provides the evidence that grant funds were spent and activities completed appropriately. Grantees and subrecipients are custodians of federal funds and should take special care to document—at every phase of the grant life cycle—how use of these funds complies with applicable federal requirements.
When grantees and subrecipients fail to create, gather, and retain necessary documentation, justifying what was done or how much it cost becomes a significant challenge. As a result, audits and monitoring reviews frequently cite lack of documentation and questioned costs in findings. For fiscal years 2011 to 2015, the U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) conducted 269 audits of CPD programs, and questioned nearly $2.8 billion for ineligible or undocumented program costs. When audit findings cite questioned costs, grantees must redirect time and resources from program execution to locating or reproducing the appropriate documentation. When such documentation cannot be produced, grantees must reimburse the federal funds associated with the questioned costs. The purpose of this bulletin is to make grantees and subrecipients aware of the impact that insufficient documentation can have on their grant programs and offer guidance on how to avoid these findings through the life cycle of a CPD grant.
The states, local governments, and nonprofits that use CPD program funds are encouraged to review this Integrity Bulletin and apply lessons contained herein to current and upcoming grant documentation responsibilities.