Economic Opportunity Commission of Nassau County, Inc., Claimed Some Unallowable Hurricane Sandy Disaster Relief Act Funds

Economic Opportunity Commission of Nassau County, Inc. (EOC), an Administration for Children and Families (ACF) grantee, claimed approximately $600,000 in unallowable Hurricane Sandy Disaster Relief Act funds.

ACF awarded approximately $4.7 million in Disaster Relief Act funds to EOC, a nonprofit organization that operates Head Start programs throughout Nassau County, New York. Hurricane Sandy severely flooded and damaged EOC's Head Start center in Long Beach, NY, leaving the one story center uninhabitable and unsalvageable. Because of the damage, EOC applied for and was awarded Disaster Relief Act funds to demolish the center, construct a new facility, and be reimbursed for costs related to the temporary relocation of its Head Start program during the project.

We reviewed $3.6 million of the $4.7 million in Disaster Relief Act funding that EOC claimed during our audit period. We did not review the remaining $1.1 million because the work associated with these funds was ongoing at the time we completed our fieldwork. Of the costs that we reviewed, $3 million complied with applicable Federal requirements. However, EOC claimed $600,000 in unallowable Disaster Relief Act costs because it (1) claimed construction costs, salaries, and fringe benefits on the basis of budgeted, not actual, costs; (2) claimed construction management and design costs that were not allocable to the grant; and (3) claimed costs that had been separately reimbursed by insurance.

We recommended that ACF ensure that (1) EOC refunds $600,000 to the Federal Government for Disaster Relief Act costs that did not comply with Federal requirements and (2) the $1.1 million in Disaster Relief Act costs associated with EOC's ongoing work complies with Federal requirements.

In written comments on our draft report, ACF concurred in part with our first recommendation (financial disallowance) and concurred with our second recommendation.