Enclosure I 

GAO-04-230R Bridgeport, Connecticut 

November 26, 2003 

The Honorable Tom Davis 

Chairman 

The Honorable Christopher Shays 

Vice-Chairman 

Committee on Government Reform 

House of Representatives 

Subject: Monitoring and Oversight of Federal Funds Awarded to Bridgeport, 

Connecticut

In 2001 and 2002, federal prosecutors indicted the Mayor of Bridgeport, 

Connecticut, and a dozen conspirators on charges of racketeering, extortion, mail 

fraud, and tax evasion. In March 2003, the mayor was found guilty on 16 counts, 

and most of the others indicted have pleaded guilty. While the indictment did not 

refer to any misuse of federal funds, some of the corrupt activities were 

associated with projects that had received some federal funding in the past. This 

corruption has raised concerns about the adequacy of monitoring and oversight of 

the more than $82 million in federal funds Bridgeport has received in recent years. 

You asked us to examine federally funded programs operated by the city of 

Bridgeport and determine whether and to what extent the respective federal 

agencies, including program officials and Offices of Inspector General, have 

heightened program monitoring and oversight in light of the corruption. To 

respond to your request, we interviewed program and Inspector General officials 

from six federal agencies that provided about 95 percent of federal funds to 

Bridgeport in fiscal year 2002 to identify their general monitoring and oversight 

mechanisms as well as any monitoring activities specific to Bridgeport.1

 We also 

obtained and reviewed annual Single Audit Act audit reports for Bridgeport for 

fiscal years 1998 through 2002, as well as agency and Inspector General audit and 

monitoring reports on federally funded programs in Bridgeport.2 In addition, we 

reviewed the indictment and verdict and met with officials from the Federal 

Bureau of Investigation (FBI) regarding the corruption investigation. We 

performed our work between June and October 2003 in accordance with generally 

accepted government auditing standards.

 

1

 The six federal agencies are the Environmental Protection Agency and the Departments of 

Agriculture, Education, Housing and Urban Development, Justice, and Transportation. 

2

 The Single Audit Act (31 U.S.C. 7501 et seq) requires state and local governments that expend 

more than a threshold amount in a fiscal year to have either a single audit or a program-specific 

audit conducted and to forward the audit report to the Federal Audit Clearinghouse for 

distribution to each federal agency responsible for programs for which the audit report identifies a 

finding. 

United States General Accounting Office 

Washington, DC 20548 
Page 2 GAO-04-23OR Bridgeport, Connecticut

Results in Brief 

The six federal agencies that provided funds to Bridgeport generally have not 

heightened monitoring and oversight activities in response to the Bridgeport 

corruption, but rather have continued to oversee program funding through 

routine, generally risk-based monitoring and oversight activities. These activities 

include the review of Single Audit Act audit reports and other reports required of 

fund recipients, comprehensive program reviews, field visits to grantees, and 

assessments of state oversight in cases where federal funds are provided to 

localities through states. In recent years, these types of monitoring and oversight 

activities in Bridgeport have not revealed misuse of federal funds. Further, 

according to a senior FBI agent who participated in the Bridgeport corruption 

investigation, the FBI did not identify any internal control weaknesses on the part 

of federal agencies as the basis for the corruption and concluded that the 

corruption was caused by corrupt individuals in the local area. 

Background 

During 2002, the federal government provided Bridgeport with more than $82 

million in funding. Six federal agencies provided about 95 percent of federal 

funds to the city. The Departments of Agriculture (USDA), Education, Housing 

and Urban Development (HUD), Justice (DOJ), and Transportation (DOT), as well 

as the Environmental Protection Agency (EPA) awarded these funds for over 20 

different programs. For example, HUD provided funds to Bridgeport for its 

Community Development Block Grant (CDBG) and affordable housing programs; 

DOJ awarded funds for its Community Oriented Policing Services (COPS) 

program; and DOT provided funds through the Federal Transit Administration 

(FTA) for the development of the Bridgeport Intermodal Transportation Center. 

See enclosure I for information about each of the federal programs that provided 

funds to Bridgeport. 

Funding for these programs does not always go directly to the city, and much of it 

flows through the states, which have responsibility for passing it to the local level. 

For example, USDA reimburses the states for its child nutrition programs, and the 

states, in turn, reimburse schools at the local level. Also, not all programs identify 

the city as the recipient of the grants. For example, the Bridgeport Housing 

Authority is an entity separate from the city of Bridgeport, and HUD’s Public 

Housing program funds do not flow through the city but go directly to the Housing 

Authority. 

Federal agencies use a variety of mechanisms to support their monitoring and 

oversight activities. The Single Audit Act is intended to, among other things, 

promote sound financial management, including effective internal controls, with 

respect to federal awards administered by state and local governments and 

nonprofit organizations. Under OMB Circular A-133, Audits of States, Local 

Governments, and Non-Profit Organizations, those entities that spend $300,000 

or more in federal awards during the fiscal year are required to have a single or 
Page 3 GAO-04-23OR Bridgeport, Connecticut

program-specific audit conducted for that year.3 The circular also notes that the 

entities are required to (1) maintain internal controls for federal programs, (2) 

comply with laws, regulations, and the provisions of contracts or grant 

agreements, (3) prepare appropriate financial statements, (4) ensure that the 

required single audits are properly performed and submitted when due, and (5) 

follow up and take corrective actions on audit findings. In addition to reviewing 

Single Audit Act audit reports, agencies may visit grantee sites, conduct risk-based 

grant reviews of local program operations, review national program operations, 

assess monitoring efforts at the state level, and/or conduct investigations and 

reviews initiated through fraud hotlines and other complaints or leads. High 

funding levels, inexperienced grantees, grantees with a history of performance 

problems, and a variety of other factors, including known instances of corruption, 

are elements of risk that might lead to increased scrutiny through risk-based 

approaches. 

Federal Agencies Have Not Heightened Monitoring and Oversight 

Activities in Response to Corruption 

In general, federal agencies have not heightened monitoring and oversight 

activities in light of the Bridgeport corruption. Rather, agencies continue to 

monitor program funding as they have in the past, as part of routine, risk-based 

monitoring and oversight. This type of monitoring and oversight in Bridgeport in 

recent years has not revealed misuse of federal funds. Further, the corruption 

investigation did not identify weaknesses in federal controls. 

Agencies Have Continued to Conduct Routine, Risk-Based Monitoring and 

Oversight

While federal agencies have not heightened monitoring and oversight activities in 

light of the Bridgeport corruption, several risk-based grant reviews of Bridgeport’s 

program operations have been conducted in recent years, particularly by HUD. 

However, according to HUD officials, without a lead or information from a 

concerned citizen or whistle-blower, routine risk-based reviews would not 

necessarily identify the kinds of fraud that occurred as part of the Bridgeport 

corruption, even if it had involved federal funds. 

• In August 2000, HUD’s Connecticut State Office reviewed Bridgeport’s CDBG 

and Emergency Shelter Grant programs. The city of Bridgeport was found to 

be in compliance with the financial administrative and record-keeping 

requirements applicable to HUD-funded grants. HUD raised only one concern, 

observing that eight storm doors called for in rehabilitation specifications had 

not been installed. 

 

3

 In the June 27, 2003, Federal Register, OMB issued final revisions to Circular A-133 that raise the 

threshold for coverage from $300,000 to $500,000 in annual federal spending. These revisions 

generally apply to fiscal years ending after December 31, 2003. 
Page 4 GAO-04-23OR Bridgeport, Connecticut

• In May 2002, HUD’s Connecticut State Office reviewed Bridgeport’s Housing 

Opportunities for Persons with AIDS (HOPWA) program. The program was 

found to be in compliance in all the regulatory and performance areas that 

were monitored. For example, all individuals met HUD’s definition of 

homeless prior to acceptance into the program, case files were well organized, 

and units appeared to be clean and adequately maintained. 

• In May 2002, HUD’s Connecticut State Office reviewed Bridgeport’s CDBG 

program. The review found that assisted entities had provided public service 

benefits, that performance reports and financial documentation appeared to 

be accurate and timely, and that selected activities were found to be eligible. 

This review also found that Bridgeport had not collected and submitted 

interest earned on two revolving loan accounts for rehabilitation and other 

activities and that there was a lack of progress with regard to the 

implementation of some CDBG rehabilitation activities. 

In addition, the following reviews were initiated as a result of leads external to 

HUD’s Inspector General. HUD’s Inspector General might not have conducted 

this work without the leads. For example: 

• In 2000, in response to a citizen’s complaint, HUD’s Inspector General 

examined the Bridgeport Housing Authority and concluded that it was not 

operated in an efficient, effective, and economical manner and did not always 

comply with HUD regulations—including a failure to meet the time schedule 

on a court-ordered directive to replace 1,063 low-income housing units. 

According to HUD officials, most of the concerns identified in the Inspector 

General’s Bridgeport Housing Authority report have been or are being 

addressed. 

• In May 2003, partly based on information from HUD’s Connecticut State Office 

that Bridgeport’s HOME Investment Partnership program was suffering from 

poor management, HUD’s Inspector General reported on Bridgeport’s HOME 

program, finding that the city could not provide adequate support for $989,929 

in HOME program funds. 

In addition to HUD, other federal agencies have reviewed Bridgeport’s program 

operations: 

• DOT hires engineering firms to perform project management oversight, 

including oversight of the development of the Bridgeport Intermodal 

Transportation Center. This oversight includes periodic site visits and the 

review of monthly reports. DOT has been monitoring this project since its 

inception in 1999. 

• As part of the Bridgeport corruption investigation, DOT’s Inspector General, 

working with the FBI, Internal Revenue Service, Defense Criminal 

Investigative Service, and FTA, investigated $104,000 in DOT grant funds used 
Page 5 GAO-04-23OR Bridgeport, Connecticut

for the removal and disposal of contaminated soil, allegedly from the 

construction site of a municipal hockey arena, parking garage, and the 

Intermodal Transportation Center. The soil was actually from sites in 

Norwalk, Connecticut, and New York City. The parties charged in this 

investigation have pleaded guilty and agreed to pay $104,000 in restitution. 

• In commenting on our draft report, DOT noted that when the Greater 

Bridgeport Transit District was chosen to be the grantee for Bridgeport’s 

Intermodal Transportation Center, FTA initiated a review of an architecture 

and engineering procurement under this grant. FTA found that the 

appropriate procurement procedures had not been followed, and the review 

resulted in the cancellation of the procurement. In addition, after 

collaboration between the Connecticut Department of Transportation and 

FTA, the city of Bridgeport was chosen to be the new grantee. The Greater 

Bridgeport Transit District was subsequently dissolved and the Greater 

Bridgeport Transit Authority was established. 

• DOJ’s Inspector General reviewed Bridgeport’s COPS program in 2000 based 

on routine risk-based audit plans and found that the city generally performed 

at an acceptable level but had failed to submit some monitoring reports and 

had submitted many other reports late. 

• In light of the corruption, DOJ’s Weed and Seed Program changed the grant 

manager fiscal agent from the city of Bridgeport to the Office of Law 

Enforcement (the police department). 

The Bridgeport Investigation Did Not Identify Weaknesses in Federal Controls

As part of its Bridgeport investigation, the FBI contacted officials from HUD, 

DOT, and EPA but did not identify any internal control weaknesses on the part of 

federal agencies, concluding that the Bridgeport corruption was not a result of 

poor internal controls. Instead, the FBI reported that the corruption was a result 

of some corrupt individuals in the local area. According to the FBI, fraud was 

committed, but there was no indication that the fraud was a result of a lack of 

proper internal controls at the federal level. 

In addition, the indictment resulting from the investigation did not refer to any 

misuse of federal funds. Rather, it stated that the mayor and others committed 

illegal acts, a few of which were associated with projects that had received some 

federal funding in the past. For example, the indictment charged the following: 

• The mayor and his associates wrongfully collected a payment from a private 

company in exchange for awarding the company a contract to operate and 

manage Bridgeport’s waste water treatment facilities. (This charge resulted in 

a “guilty” verdict.) According to EPA officials, this facility was constructed in 

the 1970s or 1980s with financial assistance from EPA. 
Page 6 GAO-04-23OR Bridgeport, Connecticut

• The mayor agreed to select a specific private company to develop vacant 

tracts of land in Bridgeport, including the site of the former Father Panik 

Village public housing complex, in return for payments to be made from the 

company when the land was developed. (This charge resulted in a “guilty” 

verdict.) In 1990, the Bridgeport Housing Authority was directed by the United 

States District Court of Connecticut to replace all units demolished in the 

Father Panik Village public housing complex; HUD provided $89 million for 

this replacement.4

• The mayor and his associates solicited and agreed to accept money and other 

items for awarding contracts to private companies for the design and 

construction of a minor league baseball stadium and hockey arena. (This 

charge was dismissed.) Prior to construction, in 1998, EPA provided $200,000 

in Brownfields program funds to assess the extent of soil and water 

contamination on this site. Also, DOT provided over $5 million to help 

construct the site’s parking garage, which is also used for Bridgeport’s 

Intermodal Transportation Center.5

Agency Comments

We provided a draft of this report to USDA, Education, EPA, HUD, DOJ, and DOT 

for their review and comment. These agencies generally agreed with our findings. 

They provided some additional information on their monitoring activities in 

Bridgeport as well as some technical comments that are reflected in the letter as 

appropriate. 

EPA noted that it has recently completed a 2-day desk review of Bridgeport’s 

Brownfields grant. This review was conducted after our draft was sent to 

agencies for comment. 

In addition, DOT noted that, in light of the corruption, FTA has scheduled a 

financial management oversight review of Bridgeport to provide assurance that 

new accounting procedures implemented by the city will provide the necessary 

control over federal transportation funds. 

 

4

 When first built, Father Panik Village had a total of 1,239 units within 46 buildings on a 40-acre 

tract on the east side of Bridgeport. Two buildings were later torn down, reducing the overall 

facility to 1,063 units. In the 1970s, the complex began to fall into disrepair, and in the 1980s 

became known as one of the nation’s most poorly managed public housing facilities. Residents 

complained about the conditions at the complex and filed suit against HUD and the Bridgeport 

Housing Authority. A settlement was negotiated in 1990, and Father Panik Village was to be totally 

demolished and replaced by 818 units of new housing around the city, plus an additional 245 

project-based Section 8 units. (Section 8 allows very low-income families to choose and lease or 

purchase safe, decent, and affordable privately owned housing.) 5

 As noted previously, the DOT Inspector General concluded that $104,000 of this amount was used 

fraudulently, and the agency has taken steps to retrieve the funds. 
Page 7 GAO-04-23OR Bridgeport, Connecticut

We are sending copies of this report to the Secretaries of USDA, Education, HUD, 

DOJ, and DOT, and to the Administrator of EPA. The report is also available at no 

cost on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions, please contact me at (202) 512-6878 or at 

woodd@gao.gov. Major contributors to this report were Andy Finkel and Eric 

Diamant. 

David G. Wood 

Director, Financial Markets and 

 Community Investment 

Enclosure 
Enclosure I 

Page 8 GAO-04-23OR Bridgeport, Connecticut

Use of Funds Provided by Six Federal Agencies in Bridgeport, Connecticut 

(by fiscal year) 

Total Federal Awards Expended in 1998 1999 2000 2001 2002 

Bridgeport, Connecticut 

(dollars in millions) $69.22 $73.06 $92.20 $82.32 $82.35a

Department of Agriculture 

Program Purpose 1998 1999 2000 2001 2002 

National School 

Lunch Program 

Assist states, through cash grants and food 

donations, in making the school lunch program 

available to schoolchildren and to encourage the 

domestic consumption of nutritious agricultural 

commodities. 4.61 4.30 5.93 6.19 6.78 

School Breakfast 

Program 

Assist states, through cash grants and food 

donations, in providing a nutritious nonprofit 

breakfast service for schoolchildren. 1.04 1.04 1.32 1.26 1.50 

Summer Food 

Service Program 

for Children 

Assist states in conducting nonprofit food service 

programs for low-income children during summer 

months and at other approved times, when schools 

are out of session or closed for vacation. 0.49 0.48 0.52 0.50 0.44 

Special 

Supplemental 

Nutrition 

Program for 

Women, Infants, 

and Children 

(WIC) 

Help states provide to low-income pregnant, 

breastfeeding, and postpartum women, infants, and 

children up to age five, determined to be at 

nutritional risk, at no cost, supplemental nutritious 

foods, nutrition education, and referrals to health 

care providers. 

0.81 0.76 0.74 0.74 0.75 

Other Agriculture 

programs 0.49 0.49 0.47 0.53 0.58 

Food StampsbImprove diets of low-income households by 

increasing their food purchasing ability. -- 1.9 2.2 2.3 2.5 

Department of Education

Title I Grants to 

Local Education 

Agencies 

Help local education agencies and schools improve 

the teaching and learning of children failing, or 

most at-risk of failing, to meet challenging state 

academic standards. 8.71 9.87 11.10 9.88 11.75 

21st Century 

Community 

Learning Centers 

Enable rural and inner city public elementary and 

secondary schools to plan, implement, or expand 

projects that benefit the educational, health, social 

service, cultural, and recreational needs of their 

communities. 0 0.63 1.70 3.28 4.23 

Other Education 

programs 3.64 4.16 4.58 6.19 7.98 

Environmental Protection Agency 

Brownfields 

Pilots/Grants and 

Demonstrationsc

Empower states, communities, and other 

stakeholders in economic redevelopment to 

prevent, assess, safely clean up, and sustainably 

reuse brownfields (sites that have actual or 

perceived contamination and a potential for 

redevelopment or reuse). (Bridgeport’s Brownfield 

grants generally are for environmental assessment 

activities.) 0.20 0 0 0.20 0 

Other EPA 

programs 0 0 0 0 0.03 
Enclosure I 

Page 9 GAO-04-23OR Bridgeport, Connecticut

Department of Housing and Urban Development 

Community 

Development 

Block Grants 

Develop viable urban communities by providing 

decent housing, a suitable living environment, and 

expanding economic opportunities, principally for 

persons of low and moderate income. Each activity 

funded must benefit low- and moderate-income 

families, aid in the prevention or elimination of 

slums or blight, or meet other community 

development needs having a particular urgency 

because existing conditions pose a serious and 

immediate threat to the health or welfare of the 

community where other financial resources are not 

available. 6.01 4.64 6.79 5.89 5.65 

HOME 

Investment 

Partnership 

Expand the supply of affordable housing, 

particularly rental housing, for low- and very lowincome Americans; strengthen the abilities of and 

local governments to design and implement 

strategies for achieving adequate supplies of 

decent, affordable housing; provide financial and 

technical assistance to participating jurisdictions; 

extend and strengthen partnerships among all 

levels of government and the private sector in the 

production and operation of affordable housing. 2.07 0.99 0.88 1.50 1.33 

Emergency 

Shelter Grants 

Improve the quality of emergency shelters and 

transitional housing for the homeless, make 

available additional shelters, meet the costs of 

operating shelters, provide essential social services 

to homeless individuals, and help prevent 

homelessness. 0.11 0.13 0.22 0.12 0.10 

Housing 

Opportunities for 

People with AIDS 

Provide states and localities with resources and 

incentives to devise long-term comprehensive 

strategies for meeting the housing needs of 

persons with AIDS, or related diseases, and their 

families. 0 0.12 0.37 0.50 0.45 

Other HUD 

programs 2.64 3.73 4.78 6.51 0.73 

Public Housing 

programs 

(Bridgeport 

Housing 

Authority) 

Provide and operate cost-effective, decent, safe 

and affordable dwellings for lower income families 

through an authorized local public housing agency. 

33.14 33.54 29.31 32.53 32.13d

Department of Justice 

Local Law 

Enforcement 

Block Grant 

Help units of local government reduce crime and 

improve public safety. Funds may be used for one 

or more of seven program purpose areas. 0.17 0.36 0.65 0.33 0.15 

Community 

Oriented Policing 

Services (COPS) 

Help to increase police presence and improve 

cooperative efforts between law enforcement 

agencies and members of the community, expand 

community policing efforts through the use of 

technology and other innovative strategies, 

increase security and reduce violence in schools, 

address crime and disorder problems, and 

otherwise enhance public safety. 0.90 2.25 1.40 0.38 0.36 

Safe Start Prevent and reduce the impact of family and 

community violence on young children (primarily 

from birth to six years of age) by helping 

communities to expand existing partnerships 

between service providers (such as law 

enforcement, mental health, health, early childhood 

education, and others) to create a comprehensive 

service delivery system. 0 0 0 0.24 0.30 
Enclosure I 

Page 10 GAO-04-23OR Bridgeport, Connecticut

Executive Office 

for Weed and 

Seed 

Combat violent crime, drug use, and gang activity 

in high-crime neighborhoods. “Weed out” violence 

and drug activity in high-crime neighborhoods and 

then “seed” the sites with a range of crime and 

drug prevention programs, human service 

resources, and neighborhood restoration activities 

to prevent crime from recurring. 0.14 0.15 0.03 0.07 0.04 

Other Justice 

programs 0.18 0.29 0.37 0.52 0.29 

Department of Transportation 

Federal Aid 

Highway 

Program 

(through the 

Federal Highway 

Administration) 

Assist state transportation agencies in planning 

and developing an integrated, interconnected 

transportation system important to interstate 

commerce and travel by constructing and 

rehabilitating the National Highway System, 

improve all public roads except those functionally 

classified as local, provide aid for the repair of 

federal-aid roads following disasters, foster safe 

highway design, and replace or rehabilitate 

deficient or obsolete bridges. 1.72 0.56 0.45 0.21 0.01 

Bridgeport 

Intermodal 

Transportation 

Center (through 

the Federal 

Transit 

Administration)e

Improve the speed and ease of transfer between 

transportation modes in downtown Bridgeport by 

colocating facilities and providing seamless 

connections where possible, and support economic 

development and land use initiatives in the city. 

0 0.99 15.62 0 1.85 

Airport 

Improvement 

Program 

(through the 

Federal Aviation 

Administration) 

Assist sponsors, owners, or operators of public-use 

airports in the development of a nationwide system 

of airports adequate to meet the needs of civil 

aeronautics. 

0.55 0.05 0.05 0.10 0 

Source: GAO analysis of data from Single Audit Act audit reports, Catalog of Federal Domestic Assistance, and agency program and Inspector General officials. 

Note: These tables present federal awards expended in Bridgeport as reported in Single Audit Act audit reports and reflect 

funding provided by the Environmental Protection Agency and the Departments of Agriculture, Education, Housing and Urban 

Development, Justice, and Transportation. (The Departments of Commerce, Interior, Labor, Health and Human Services, and 

Treasury, as well as the Federal Emergency Management Agency and the Corporation for National Community Service, also 

provide funds to Bridgeport. These agencies provided approximately $2.4 million to Bridgeport in 2002, or about 5 percent of the 

total federal funds that were provided to Bridgeport in that year.) 

a

The total for 2002 includes an approximation for funds provided to the Bridgeport Housing Authority using the average funds 

provided from 1998 through 2001. 

b

Food Stamp Program funding as reported by the Department of Agriculture. 

c

Brownfields Pilots/Grants and Demonstrations funding as reported by the Environmental Protection Agency. 

d

The figure for 2002 is an approximation for funds provided to the Bridgeport Housing Authority using the average funds 

provided from 1998 through 2001. 

e

Intermodal Transportation Center funding as reported by the Department of Transportation. In 2003, DOT provided an 

additional $8 million in grant funds for the final design and construction of the Bridgeport Intermodal Center’s bus terminal. 

(250147) 
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