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B-171500 1 (1974-07-30)

handle is hein.gao/gaobaaefd0001 and id is 1 raw text is: -. - COIPTROLLER GdrNIrRAL Or I HE: UNITE-LD STATS. 171500RELEASED C4The Honorable Adlai E. Stevenson, III United States Senate Dear Senator Stevenson: Your letter of January 31, 1973, requested us to audit the financial. records of the Ascending Citizen's Development Company (ACDC)--the economic development contractor of the Model Cities Program in East St. Louis, Illinois--and its related corporations and the Model Cities Program in East St. Louis to determine whether the program's resources had been mismanaged, mishandled, or misappropriated. We reviewed the activities of ACDC and its related corporations and reported on this phase of our work on January 7, 1974 (B-171500). This report is on our review of eight Model Cities projects--concerning citizen participation, manpower and job development, and environmental pro- tection and development--in East St. Louis which we examined at your request. The Department of Housing and Urban Development (HUD) administers - the Model Cities Program at the national level and the City Demonstration 2 Agency (CDA) of East St. Louis is responsible for the local administration of the program. HUD requires CDA to monitor and control the activities of operating agencies conducting Model Cities projects to insure that adequate financial systems are maintained arid that program funds are effectively and efficiently used as intended. About $103,000 of questionable expenses in the eight Model Cities projects were charged to the Model Cities program; documentation was inadequate to support costs reported by certain operating agencies to CDA; and CDA and operating agencies' records were inadequate to determine overall program accomplishments. The weaknesses resulted primarily from CDA's failure to adequately monitor and control Model Cities project activities. Officials in MUD's Chicago area office on September 19, 1973, concurred with our findings and said they woulX-follow up to insure that corrective action was taken. On June 28, 1974, officials of the Chicago area office said no followup action had been taken. Detailed information on the activities of the operating agencies we reviewed follows.

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