Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of East Winston Community Development  Corporation's Administration of Office of Community Services Discretionary Grant No. 90EE0353/01," (A-04-02-00010)

August 22, 2002

Complete Text of Report is available in PDF format (2.13 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


At the request of the Department's Office of Community Services (OCS), we performed a limited-scope review of the East Winston Community Development Corporation's (EWCDC) administration of an OCS Economic Development Grant.  The purpose of the grant was to create a community-owned, cafeteria-style restaurant known as the EastSide Cafeteria Project and to provide employment to 30 individuals in this community.  Our final report points out that EWCDC did not meet the grant objectives.  Also, grant funds were not used to renovate the proposed cafeteria site nor to purchase the equipment for the cafeteria's operations as outlined in its OCS-approved grant.  We recommended that OCS recover the $250,000 of grant funds and that EWCDC evaluate its ability to properly control and account for federal funds before submitting future Department of Health and Human Services (HHS) grant proposals.  The EWCDC officials generally disagreed with our findings and recommendations.  Primarily, the EWCDC officials did not agree that the expenditure of OCS grant funds was restricted for use in renovating the proposed cafeteria site and purchasing equipment for the cafeteria's operation.  The EWCDC officials believe that it was proper to expend the grant funds for any purpose that was related to the overall cafeteria project.