oversight

Department of Housing and Community Development, HOME Program, State of Massachusetts, Boston, Massachusetts

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-05-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Telephone: (617) 565-5259        http://www.hud.gov/oig/oigindex.html                     Fax: (617) 565-6878




                                                     U.S. Department of Housing and Urban
                                                     Development
                                                     New England Office of District Inspector General
                                                        for Audit, 1AGA
                                                     Thomas P. O’Neill ,Jr. Federal Building
                                                     Room 370
                                                     10 Causeway Street
                                                     Boston, Massachusetts 02222-1092




May 17, 2001                                         Audit Memorandum
                                                     No: 2001-BO-1803


MEMORANDUM FOR: James Barnes, Office of Community Planning and
                 Development, 1AD


FROM: William D. Hartnett, District Inspector General, Office of Audit, 1AGA


SUBJECT:          Department of Housing and Community Development
                  HOME Program
                  State of Massachusetts
                  Boston, Massachusetts


Based on discussions with your office, we completed an audit survey of the State of
Massachusetts’ HOME Program administered by the Department of Housing and Community
Development (DHCD). Our objectives were to determine whether DHCD was administering the
HOME Program in compliance with HUD requirements and whether HOME funds were
efficiently and effectively used to expand the supply of decent, safe and affordable housing for low
and very low-income households.

Our survey found that DHCD was: (1) administering the HOME Program in compliance with
HUD requirements; and (2) efficiently and effectively utilizing HOME funds to expand the supply
of decent, safe and affordable housing for low and very low-income households.

If you have any questions, please contact our office at (617) 565-5259.
                                        Background

The State of Massachusetts’ Department of Housing and Community Development (DHCD)
receives and administers grants from the HUD, including funding under the HOME Investment
Partnership Act (HOME). The Director of DHCD is Jane Wallis. The HOME Program is
administered by Catherine Racer, Associate Director, DHCD’s Division of Private Housing.
JoAnn McGuirk is the Director of the HOME Program. Records for the HOME Program are
located at One Congress Street, Boston, Massachusetts.

The HOME Program was established under Title II of the Cranston-Gonzalez National
Affordable Housing Act of 1990. The primary objective of the program is to expand the supply
of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very
low-income and low-income Americans.

As a Housing block grant, the HOME Program provides participating jurisdictions flexibility and
discretion over which housing activities to pursue. These activities may include acquisition,
rehabilitation, new construction, and resident-based rental assistance. In addition, participating
jurisdictions may provide assistance in a number of eligible forms, including loans, advances,
equity investments, and interest subsidies. Up to ten percent of the HOME funds received by a
participating jurisdiction may be use for HOME Program administrative purposes.

During Fiscal Years 1992-2000, DHCD was allocated HOME Program funds totaling
$109,728,000. HUD’s reporting system showed that $85,324,527 of this total had been drawn
down as of January 26, 2001.

From inception through January 2001, DHCD obligated $102 million out of the $109,728,000
allocated to four separate programs allowed by HOME (the balance was used for administration
costs) as follows:


  PROGRAM                                                                     AMOUNT
  Rental Production                                                          $ 62,541,528
  First Time Homebuyer                                                       $ 23,495,144
  Homeowner Rehabilitation                                                   $ 11,454,511
  Tenant Based Rental Assistance                                             $ 4,562,169
      Total                                                                  $102,053,352




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Expenditures by program for FY 2000 and FY 2001 (through February 14, 2001) were as
follows:

 PROGRAM                                      FY 2000             FY 2001          TOTAL
 Rental Production                          $ 9,290,238          $3,773,229      $13,063,467
 First Time Homebuyer                       $ 3,907,775          $1,806,989      $ 5,714,764
 Homeowner Rehabilitation                   $ 1,659,426          $1,196,909      $ 2,856,335
 Tenant Based Rental Assistance             $    24,991               0          $    24,991
      Totals                                $14,882,430          $6,777,127      $21,659,557



              Audit Objectives, Scope, and Methodology
The objectives of our audit were to determine whether DHCD was administering the HOME
Program in compliance with HUD requirements and whether HOME funds were efficiently and
effectively use to expand the supply of decent, safe and affordable housing for low and very low-
income households.

To accomplish our audit objectives we performed the following:

   Ø Reviewed applicable HUD regulations to gain an understanding of HOME program
     requirements.

   Ø Interviewed HUD’s Massachusetts State Office, Community Planning and Development
     Division staff for information on the State of Massachusetts’ program.

   Ø Reviewed files and Integrated Disbursement and Information System reports maintained
     by HUD’s Massachusetts State Office, Community Planning and Development Division
     for information relating to the State of Massachusetts’ program.

   Ø Interviewed the Associate Director of the Division of Private Housing, Director of the
     HOME Program, and staff who administer the HOME program to gain an understanding
     of the structure of DHCD’s HOME program and to identify procedures and controls
     over the program.

   Ø Reviewed operating policies, guidelines, handbooks, financial records, Notice of Funding
     Availability (NOFA) for the Rental Production and First Time Homebuyer Programs and
     applications submitted in response to the NOFAs maintained by DHCD relative to the
     HOME program.




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   Ø Reviewed DHCD’s files for two Rental Production projects to assure that: projects met
     the eligibility and affordability requirements; contracts were properly executed;
     disbursements were properly supported; and they were adequately monitored.

   Ø Reviewed DHCD’s files for four First Time Homebuyer projects to assure that: projects
     met the eligibility and affordability requirements; contracts were properly executed;
     disbursements were properly supported; and they were adequately monitored.

   Ø Reviewed administrative costs to assure that they were eligible program costs and
     adequately supported.

   Ø Performed site inspection of one Rental Production project and one First Time
     Homebuyer project to assure that decent, safe and sanitary housing was being provided.

   Ø Reviewed the tenant and homebuyer files at those projects to assure that the tenants and
     homebuyers met the eligibility requirements of the program

We conducted the audit from February 2001 through April 2001. The audit covered the period
April 1, 1998 through December 31, 2000 and was extended, as appropriate, to meet our
objectives.



                                     Audit Results

Our survey found that DHCD was: (1) administering the HOME Program in compliance with
HUD requirements; and (2) efficiently and effectively utilizing HOME funds to expand the supply
of decent, sate and affordable housing for low and very low-income households.




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Distribution
Secretary, S
Office of Administration, S
Chief of Staff, S
Senior Advisor to the Secretary, S
Senior Staff Member, S
Deputy General Counsel for Housing Finance and Operations, S
Deputy Chief of Staff for Policy and Program, S
Executive Office for Administrative Operations and Management, S
Office of Government National Mortgage Association, T
Director, Office of Departmental Equal Employment Opportunity, U
Chief Procurement Officer, N
Director, Office of Departmental Operations and Coordination, I
Department of Enforcement Center, DEC
Office of the Chief Financial Officer, F
Deputy Chief of Staff for Intergovernmental Affairs, S
Chief Information Officer, Q
Director, Real Estate Assessment Center, X, 1280 Maryland Avenue, SW, Suite 800
Director, Office of Multifamily Assistance Restructuring, Y
General Deputy Assistant Secretary for Housing, H
Inspector General, G
Deputy Assistant Inspector General for Audit, GA
Assistant Inspector General for Audit, GA
Assistant Inspector General for Investigation, GI
Acting Director, Program Research and Planning Division, GAP
Acting Director, Financial Audits Division, GAF
Director, Information Systems Audit Division, GAA
Counsel to the Inspector General, GC
Central Records, GF
Semi-Annual Report Coordinator, GF
Office of Inspector General Webmaster - Electronic format
Public Affairs Office, G
Acquisitions Librarian, Library, AS
District Inspector General (2-11)
Acting Secretary’s Representative, 1AS
Special Agent-In-Charge, 1AGI
Primary Field Audit Liaison Officer, 3AFI
Special Advisor/Comptroller, DOT
Departmental Audit Liaison Officer, FMA
Auditee (2)


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Armando Falcon, Director, Office of Federal Housing Enterprise Oversight, 1700G Street, NW,
Room 4011, Washington, DC 20552
Sharon Pinkerton, Staff Director, Subcommittee on Criminal Justice, Drug Policy & Human
Resources, B373 Rayburn House Office Bldg., Washington DC 20515.

The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, 340 Dirksen
Senate Office Building, United States Senate, Washington, DC 20510

The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs, 706
Hart Senate Office Bldg., United States Senate, Washington, DC 20510

The Honorable Dan Burton, Chairman, Committee on Government Reform, 2185 Rayburn Bldg.,
House of Representatives, Washington, DC 20515

The Honorable Henry A. Waxman, Ranking Member, Committee on Government Reform, 2204
Rayburn Bldg., House of Representatives, Washington, DC 20515

Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O’Neill House
Office Building, Washington, DC 20515

Steve Redburn, Chief, Housing Branch, Office of Management & Budget, 725 17th Street, NW,
Room 9226, New Executive Office Building, Washington, DC 20503

Stanley Czerwinski, Associate Director, Resources, Community, and Economic Development
Division, United States General Accounting Office, 441 G Street, NW, Room 2T23,
Washington, DC 20548




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