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 2 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. 3 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. 4 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) 5 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 6
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)