Suffolk’s annual audit backed up the U.S. Department of Housing and Urban Development’s finding that the city failed to adequately administer recent Western Tidewater HOME Consortium’s grants.

The audit, prepared by Cherry, Bekaert and Holland, a Virginia Beach-based accounting firm, found that the city – which heads the consortium that also includes Franklin and Southampton and Isle of Wight counties – did not sufficiently monitor use of the federal money.

As the consortium’s lead agency, the city is responsible for distributing the federal HOME funds and annually monitoring how each community uses it.

Earlier this fall, HUD ranked the consortium’s performance as among &uot;the poorest in the nation&uot; and notified Suffolk that the consortium no longer qualified for participation in the HOME program. The agency stripped the consortium of its anticipated $500,000 allocation for 2005.

According to the auditor’s report, released Wednesday, there &uot;was no evidence that subrecipients (the other member cities) or the Community Development Housing Organization (CDHO) had been monitored during the year, other than receipt of annual financial statements for the subrecipients for 2003.&uot;

No financial statement was on file for the CDHO, the audit said.

Although a city representative was reported to have made on-site monitoring visits to the neighboring cities, there is no documentation supporting the claim, the audit noted.

Despite administrative flaws, the audit found that all expenditures funded met the HOME grant guidelines.

The audit included recommendations that the city work with HUD to develop an annual monitoring plan, a system to maintain documentation of compliance, and to increase training for the employee charged with administering the program.

The city has committed to implementing the recommendations by Dec. 31, according to the city’s response included in the audit.

Mayor Bobby L. Ralph said the city is implementing the auditor’s recommendations.

&uot;I know they are working on it,&uot; Ralph added. As for the future of receiving HOME funds, &uot;We will reapply and I don’t anticipate any problems. &uot;

City Manager R. Steven Herbert could not be reached for comment.

allison.williams@suffolknewsherald.com