New Jersey Could Not Support Disaster Recovery Expenses for Its Non-Federal Match Costs

Official summary from the Oversight.gov

As part of our mission to safeguard HUD’s programs from fraud, waste, and abuse, and to identify opportunities for HUD programs to progress and succeed, we selected New Jersey for a review of potential improper payments. Our audit objective was to determine whether New Jersey made improper non-Federal match activity payments. We also assessed whether the Office of Community Planning and Development’s Office of Disaster Recovery (CPD ODR) had sufficient and adequate controls to prevent improper match payments. New Jersey could not provide support for 17 of 64 Hurricane Sandy (27 percent) and all 8 Hurricane Irene (100 percent) items that we tested. This occurred because New Jersey did not establish adequate controls for properly classifying, allocating, and tracking non-Federal match costs. Consequently, these unsupported payments meet OMB’s definition of an improper payment because it could not be determined whether the payment was proper or improper due to the lack of documentation. As of June 6, 2025, New Jersey still had more than $5.6 million of unspent HUD Sandy non-Federal match funds which, due to the inadequate controls, were at risk of being unsupported when paid. Further,