Norwalk Economic Opportunity Now, Inc., Did Not Always Charge Allowable Costs to the Community Services Block Grant and the Community Services Block Grant - Recover Act Programs

Of the approximately $514,000 in Community Services Block Grant (CSBG) and CSBG Recovery Act costs that the Connecticut Department of Social Services (State agency) claimed on behalf of Norwalk Economic Opportunity Now, Inc. (NEON), $199,000 was allowable under the terms of the grant and applicable Federal regulations. However, the State agency claimed $315,000 (or 61 percent of reviewed expenditures) in unallowable costs on behalf of NEON, including (1) costs that were not reasonable for the performance of the program; (2) indirect expenses charged to the grants based on an unallowable methodology; (3) operating costs that were not reasonable and renovation costs without a Federal waiver that did not meet program objectives; (4) prohibited lobbying, fundraising, and donations; and (5) costs for missing equipment.

Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the State agency awarded to, and claimed on behalf of, NEON $722,000 in CSBG funds. The State agency awarded to, and claimed on behalf of, NEON an additional $358,000 in CSBG Recovery Act funds from July 1, 2009, through September 30, 2010.