New Jersey Should Strengthen Hurricane Sandy Social Services Block Grant Internal Controls

On the basis of our review of 41 subrecipients, we determined that the New Jersey Department of Human Services (State agency) budgeted appropriate costs and claimed Sandy Social Services Block Grant costs that were in accordance with Federal requirements as of March 31, 2014. However, the State agency should strengthen its internal controls over these funds. The State agency did not have procedures to ensure that subrecipients' claimed expenditures were not reimbursed by other sources, such as the Federal Emergency Management Agency (FEMA) or insurers. Further, the State agency awarded cash advances to some subrecipients in excess of their immediate cash needs.

We recommended that ACF work with the State agency to ensure that the State agency develops and implements procedures to (1) ensure that subrecipients eligible for funding through FEMA or insurance coverage claim only expenditures that were not already reimbursed and (2) adhere to its contract policy on cash advances to prevent subrecipients from drawing down in excess of immediate needs. The State agency generally agreed with our first recommendation and disagreed with our second recommendation.