oversight

The City of Augusta, Georgia, Controls Over Its HOME Program Were Inadequate

Published by the Department of Housing and Urban Development, Office of Inspector General on 2008-06-09.

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

                                                                Issue Date
                                                                     June 9, 2008
                                                                Audit Report Number
                                                                     2008-AT-1009




TO:        Mary D. Presley, Director, HUD Atlanta Office of Community Planning
            and Development, 4AD



FROM:      James D. McKay, Regional Inspector General for Audit, 4AGA

SUBJECT:   The City of Augusta, Georgia, Controls Over Its HOME Program Were
           Inadequate

                                 HIGHLIGHTS

 What We Audited and Why


           We audited the City of Augusta’s (City) HOME Investment Partnerships (HOME)
           program as part of the U.S. Department of Housing and Urban Development’s
           (HUD) annual audit plan. We selected the City for review based on a HOME risk
           assessment we conducted. Our audit objectives were to determine whether the
           City complied with HOME program requirements for commitments, production
           and completion of project activities, and eligibility and support of project costs.

 What We Found


           The City’s controls over its HOME program were inadequate. We identified
           more than $1 million in HOME funds that involved questioned costs and funds
           that were subject to recapture. Specifically, the City did not (a) properly commit
           $755,284, (b) have proper documentation and analysis to support approvals and
           effectively address project performance delays, (c) ensure proper support of more
           than $196,657, (d) ensure the eligibility of $92,129 for affordable housing
           compliance, and (e) properly maintain and manage program staff. The violations
           occurred because City management and staff did not follow and enforce program
           requirements.
What We Recommend

           We recommend that the Director of HUD’s Atlanta Office of Community
           Planning and Development require the City to properly support or repay more
           than $566,697 in questioned costs and recapture more than $477,373 because of
           program violations. We also recommend that the Director require the City to
           establish and implement proper controls and procedures to ensure compliance
           with program requirements.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.

Auditee’s Response


           We provided our discussion draft audit report to the City on April 21, 2008 and
           held an exit conference on April 30, 2008. The City provided written comments
           on May 14, 2008.

           The City generally agreed with our finding and stated it has begun implementing
           the recommendations. The complete text of the City’s written response, along
           with our evaluation of that response, can be found in appendix B of this report.
           The City also provided attachments with its response that are available for review
           upon request.




                                            2
                          TABLE OF CONTENTS


Background and Objectives                                                 4

Results of Audit
      Finding 1:    The City’s Controls Over Its HOME Program Were        5
                    Inadequate


Scope and Methodology                                                     12

Internal Controls                                                         14

Appendixes
       A            Schedule of Questioned Costs and Funds to Be Put to   15
                    Better Use

        B           Auditee Comments and OIG’s Evaluation                 16

        C           Schedule of Funds Not Committed by the Required       24
                    Deadline




                                           3
                       BACKGROUND AND OBJECTIVES


The City of Augusta’s (City) government was created by legislative act in the state of Georgia
from the unification of two governments, the City of Augusta, Georgia, and Richmond County,
Georgia. On June 20, 1995, the citizens of the City of Augusta and Richmond County voted to
consolidate into one government named Augusta, Georgia. The officials for the new government
were elected and took office on January 1, 1996. The unified government combined all
functions and began financial operations on January 1, 1996.

The City is governed by a full-time mayor, with a term of four years, and a 10-member
commission, serving on a part-time basis and elected to staggered terms of four years. The
mayor and commission appoint an administrator who serves as a full-time administrative officer
and is responsible for the daily operations of the government. The City’s Housing and
Community Development department is responsible for administering several programs
including the Community Development Block Grant, HOME Investment Partnerships (HOME),
Emergency Shelter Grant, and the Economic Development Initiative. The mission of the
Augusta Housing and Community Development department is to create positive change by
promoting self-sufficiency through partnership in economic development, quality housing, and
neighborhood reinvestment.

Since 2003, the City has received more than $6.9 million in HOME and American Dream
Downpayment Initiative funding. HOME funding is allocated to eligible state and local
governments to strengthen public-private partnerships and to supply decent, safe, and sanitary
affordable housing to very low-income families. Participating jurisdictions may use HOME
funds to carry out multiyear housing strategies through acquisition, rehabilitation, new
construction, and tenant-based rental assistance.

The U.S. Department of Housing and Urban Development’s (HUD) Atlanta Office of
Community Planning and Development in Atlanta, Georgia, is responsible for overseeing the
City. HUD’s most recent monitoring report, dated August 10, 2007, indicated that the City’s
HOME program did not operate at a level that ensured compliance with HOME program
requirements.

The City’s independent public accountant report for fiscal year 2006 contained one current
finding and five prior findings. The independent public accountant findings included excessive
administrative costs allocation, lack of subreceipient monitoring, and noncompliance with
program income requirements.

Our audit objectives were to determine whether the City complied with HOME program
requirements for commitments, production and completion of project activities, and eligibility
and support of project costs.




                                                4
                                 RESULTS OF AUDIT


Finding 1: The City’s Controls Over Its HOME Program Were
           Inadequate
The City’s controls over the administration of its HOME program were inadequate. The
violations occurred because City management and staff did not follow and enforce program
requirements. As a result, the City incurred more than $1 million in HOME funds that involved
questioned costs and funds that were subject to recapture.


Specifically, the City did not

       •   Follow commitment requirements involving $755,284,
       •   Have proper documentation and analysis to support project approvals and effectively
           address project delays,
       •   Ensure proper support of more than $196,657,
       •   Ensure the eligibility of $92,129 for affordable housing compliance, and
       •   Maintain and manage program staff.


 Commitment Requirements
 Not Followed

               The City did not properly commit $755,284 in HOME funds that were subject to
               recapture by HUD because it did not meet the commitment deadline (see
               appendix C). For 7 of 18 activities examined, the City did not commit the funds
               by the 24-month commitment deadline. The $755,284 includes $477,373 that the
               City had not committed at the time of our review and $277,911 that was
               committed after expiration of the 24-month commitment deadline. Regulations at
               24 CFR [Code of Federal Regulations] 92.500(d) state that HUD will recapture or
               reduce HOME funds not committed within 24 months after the last day of the
               month in which HUD provides notice of its execution of the HOME agreement.

               The City also did not accurately report commitment information to HUD. It
               entered incorrect commitment dates into HUD’s Integrated Disbursement and
               Information System for 17 of 18 sampled activities. The incorrect data included
               $983,185 for nine activities, for which the City entered commitment dates that
               were earlier than the actual commitment dates, and more than $1.5 million for
               another eight activities, for which the City entered commitment dates that were
               later than the actual commitment dates. HUD relies on the accuracy of the
               commitment information entered by the grantee in the system. The incorrect


                                               5
           dates reduced the effectiveness of the report as a tool for HUD’s monitoring of the
           program’s commitment requirements.

Delayed Projects Approved without
Required Documentation and
Supporting Analysis

           The City did not maintain the required documentation and analysis to support its
           approval of three project activities. Regulations at 24 CFR 92.504(a) provide that
           recipients are responsible for managing the day-to-day operations of their HOME
           program, ensuring that HOME funds are used in accordance with all program
           requirements and written agreements, and taking appropriate action when
           performance problems arise. Notice CPD (Community Planning and
           Development) 98-1 states that as part of the application process, recipients should
           have the applicant submit a statement of sources/uses of funds for the project.
           Regulations at 24 CFR 92.508(a) require recipients to establish and maintain
           sufficient records to enable HUD to determine compliance with requirements.

           The City also did not effectively address delays that did or could affect the
           eventual completion and sale of affordable housing. Regulations at 24 CFR 92.2
           require construction to start within 12 months. The City contracts required
           projects to be either obligated or completed within 13 months. The three project
           activities consisted of projects 954, 1334, and 1599.

           Project 954 - The City awarded a contract for $185,782 to a community housing
           development organization (CHDO) on January 3, 2006, using fiscal year 2003
           funding. The contract stated that the CHDO was to perform new construction
           services for up to 10 single-family homes. These homes were to be sold or rented
           to eligible low- and very low-income persons. The contract also required the
           CHDO to maintain evidence of additional financing resources. However, the
           City’s file did not contain evidence that the CHDO had obtained any financial
           commitments. The file also did not contain the required source and application of
           fund statements.

           The contract also states that the project must be completed within 13 months from
           the signing of the contract. However, the CHDO did not start construction within
           the required timeframe. The HOME program manager stated that in the past, City
           officials did not encourage staff to take appropriate actions against slow
           performing CHDOs. Also, during the latter part of 2006 and early 2007, the
           CHDO went through a transition in its administration when the CHDO’s director
           left. After his departure, no housing activity took place. Due to the CHDO’s
           inactivity, in July 2007, the City recaptured funds totaling $185,782 from the
           CHDO and reprogrammed the funds for use by other CHDOs. Although the City
           reprogrammed the funds, they should have been recaptured or reduced by HUD
           because they were not committed within the 24-month period.


                                            6
           Project 1334 - A contract was approved for the same CHDO as project 954. On
           October 18, 2005, using fiscal year 2005 funding, the City awarded a contract for
           $92,128 to the CHDO to construct up to 10 single-family homes. The contract
           required the same number of units as project 954. These homes were also to be
           sold or rented to HOME-eligible persons. The contract stated that the CHDO
           would complete the project within 13 months from the signing of the contract. As
           of March 31, 2008, there was no activity, and no funds had been drawn. The
           project was past the required start date and was behind schedule with no homes
           constructed. The CHDO’s ability to perform construction services and provide
           affordable housing in a timely manner is questionable. City staff stated that they
           were waiting for the CHDO to submit a revised plan which involved reducing the
           number of homes to be built. According to City staff, the CHDO indicated that it
           would not be able to complete the project for $92,128. The contract required the
           CHDO to maintain evidence of additional financing resources. However, the
           City’s file did not contain evidence that the CHDO had the financial commitments
           needed to complete the project. The file also did not contain the required source
           and application of fund statements.

           Project 1599 – The contract between the City and a nonprofit organization was
           awarded for $200,000 on December 12, 2006. The organization was required to
           obligate the HOME funds within 13 months of the date of the contract execution.
           However, as of March 31, 2008, no funds had been disbursed, and construction
           had not begun. In addition, the City’s file did not contain evidence that the
           organization had obtained additional finance resources as required by the contract.
           The files also did not contain the required source and application of fund
           statements.

           The Augusta Housing and Community Development department director stated
           that in the past, CHDOs were not required to obtain additional funding.
           Therefore, they did not obtain additional financing. Thus, the practice of
           providing the CHDOs all of the funds needed to complete projects did not comply
           with the program requirements.

Costs Not Properly Supported


           The City disbursed $196,657 for project activities that were not properly
           supported as allowable HOME costs. The amount included costs for
           homeownership downpayment assistance, lots purchased, CHDO staff salaries,
           consultant services, and other miscellaneous expenses. Regulations at 24 CFR
           92.508(a) require recipients to establish and maintain sufficient records to enable
           HUD to determine compliance with program requirements. The $196,657
           consists of




                                            7
                •   $105,036 the City disbursed for homeownership downpayment assistance
                    program project activities. The City did not obtain supporting
                    documentation to verify whether the homebuyer had previously owned a
                    home and if so, when. There was no supporting documentation indicating
                    whether the homebuyer met the criteria for eligibility to receive
                    downpayment assistance.

                •   $60,000 paid by the City for four lots purchased by a CHDO (which
                    includes project 963) without adequate documentation to support how
                    much was paid for the lots. For example, the file did not contain a
                    cancelled check or the closing statement.

                •   $17,701 for unsupported salary expenditures. The file did not evidence
                    that the City had obtained proper payroll documentation from the CHDOs.
                    The timesheets did not provide information regarding how the employees’
                    time was charged, and there were no photocopies of payroll
                    documentation in the file.

                •   $2,400 for unsupported consultant services. There were no written
                    agreements in the file to support payments made to consultants. Without
                    the agreements, the City could not determine whether the consultant
                    services were necessary, reasonable, and in compliance with HOME
                    program requirements.

                •   $11,520 in other miscellaneous expenses paid by the City without
                    sufficient supporting documentation. The City could not determine
                    whether the expenses were for HOME-eligible activities.


Ineligible Costs and Inadequate
Support for Affordable Housing
Units

            The City did not meet the program’s affordable housing objective for two of four
            completed project activities. Home sales in projects 963 and 1236 showed that
            the City did not ensure that four of eight affordable housing units were only sold
            to individuals who met the required income limits.

            •       For project 963, one of the four homebuyers had income that exceeded the
                    program’s limit. We were unable to obtain documentation for another
                    homebuyer. Regulations at 24 CFR 92.508(a) requires recipients to
                    maintain records demonstrating that each family is income-eligible.

            •       For project 1236, two of the four homebuyers had incomes that exceeded
                    the program’s limit. The City disbursed $92,129 for this project.


                                             8
            Because of these conditions, the City did not meet the program’s affordable
            housing objective. Thus, the $92,129 spent on the activity was not supported as
            an eligible program cost.


Staff Capacity Issues


            The City did not properly hire, train, manage, and supervise the staff needed to
            administer the program. Regulations at 24 CFR 92.504(a) provide that the City is
            ultimately responsible for managing the day-to-day operations of its HOME
            program and taking appropriate action when performance problems arise.
            Regulations at 24 CFR 92.508(a) require recipients to establish and maintain
            sufficient records to enable HUD to determine compliance with program
            requirements. The review showed that the City did not

            •   Maintain staff to administer the program. The City’s organizational charts
                and employee listing showed that since 2003, there had been four different
                directors of the City’s Housing and Community Development office. It also
                showed that since 2003, there had been two different financial officers and
                three different housing program managers in the City’s Housing and
                Community Development office. At the end of December 2007, the financial
                officer left, and as of March 31, 2008, the City had not hired a full-time
                permanent financial officer. The City’s Housing and Community
                Development director stated that he planned to hire a new financial officer and
                an assistant director.

            •   Properly manage, hire, train, and supervise its staff on issues concerning
                commitment requirements, supporting documentation for project approvals,
                project activity delays, eligibility and support of project costs, and
                documentation of compliance with affordable housing requirements. In
                February 2007, the City reorganized its Housing and Community
                Development office. However, the City’s Housing and Community
                Development staff was reassigned duties and responsibilities in areas in which
                they had no prior experience or training. The staff was not provided with
                adequate guidance to properly administer the program.

 Conclusion



            The City needs to improve controls over its HOME program. City management
            and staff did not follow and enforce program requirements concerning
            commitment requirements, project activity delays, eligibility and support of
            project costs, and documentation of compliance with affordable housing
            requirements. The City also did not properly manage, supervise, and maintain the


                                             9
          staff needed to administer the program. As a result, the City had more than $1
          million in HOME funds that involved questioned costs and funds that were
          subject to recapture.


Recommendations


          We recommend that the Director of HUD’s Atlanta Office of Community
          Planning and Development

          1A.     Require the City to reimburse its United States Treasury trust fund account
                  from nonfederal funds the $277,911 that it committed after expiration of
                  the commitment deadline.

          1B.     Recapture $477,373 on deposit in the United States Treasury trust fund
                  account, which the City had not committed although the commitment
                  deadline had expired.

          1C.     Require the City to develop and implement procedures and controls to
                  ensure that future program funds are committed by the required deadline
                  dates.

          1D.     Require the City to develop and implement procedures and controls to
                  ensure accurate entries into HUD’s Integrated Disbursement and
                  Information System.

          1E.     Require the City to take appropriate action to recover all HOME funds
                  invested in activities the City cannot complete in a timely manner.

          1F.     Require the City to develop and implement procedures and controls to
                  ensure proper documentation of its review and approval of activities
                  before disbursing future HOME funds for ownership and rental housing
                  carried out by community housing development organizations and other
                  developers.

          1G.     Require the City to reimburse its United States Treasury trust fund account
                  from nonfederal funds $196,657 in questioned costs that it cannot support
                  as having been incurred for costs that met program requirements.

          1H.     Require the City to reimburse its United States Treasury trust fund account
                  from nonfederal funds the $92,129 disbursed for project 1236, since the
                  project did not result in units being sold to individuals who met the
                  HOME program’s income limits.




                                           10
1I.   Require the City to develop and implement procedures and controls to
      ensure that affordable housing units are only sold or rented to individuals
      who meet the program’s income limits.

1J.   Require the City to hire and train sufficient staff to effectively administer
      its HOME program.




                                11
                         SCOPE AND METHODOLOGY

To accomplish our objectives, we

   •   Researched HUD handbooks, the Code of Federal Regulations, and other requirements
       and directives that govern the City’s HOME program;

   •   Obtained and reviewed HUD’s Integrated Disbursement and Information System reports
       from HUD;

   •   Reviewed HUD’s monitoring reports and files for the City’s HOME program;

   •   Reviewed the City’s consolidated annual performance and evaluation reports for its
       HOME program;

   •   Reviewed the City’s procedures and controls used to administer its HOME program
       activities;

   •   Interviewed officials of the Atlanta HUD Office of Community Planning and
       Development, the City, and community housing development organizations;

   •   Obtained and reviewed the City’s accounting records, annual audited financial
       statements, program and project files, policies, and procedures; and

   •   Conducted tests to determine the City’s compliance with HOME program requirements.
       During the audit period, the City disbursed $7,277,669 for community housing
       development organizations, housing rehabilitation, downpayment assistance, demolition
       rebuild, and professional services, of which we examined $2,289,520 or 31 percent. We
       selected the tested items, considering factors such as past HUD monitoring concerns,
       transaction amount, and transaction type. We also conducted tests to determine whether
       the City complied with HOME program requirements for commitments. We selected for
       review 18 projects from a universe of 449 HOME program activities. Our sample
       included projects from HOME grant program years 2003 through 2006. The results of
       the audit only apply to the tested activities and cannot be projected to the universe or total
       population.

We performed the review from October 2007 to March 2008 at the offices of the City’s Housing
and Community Development department, the residences of its HOME program recipients, and
the HUD Office of Community Planning and Development in Atlanta, Georgia.

We did not review and assess general and application controls over computer-processed data for
the City’s general ledger and HUD’s Integrated Disbursement and Information System. We
conducted other tests and procedures to assure the integrity of computer-processed data that were
relevant to the audit objectives. The tests included, but were not limited to, comparison of

                                                12
computer-processed data to written agreements, contracts, invoices, and other supporting
documentation. We also inspected selected development sites and interviewed community
housing development organization officials. The tests disclosed that the City entered incorrect
commitment information into HUD’s Integrated Information and Disbursement System. The
incorrect data entries did not impact our report because we obtained correct information for the
activities reviewed.

The review generally covered the period January 1, 2003, through December 31, 2007. We
adjusted the review period when necessary.

We performed the review in accordance with generally accepted government auditing standards.




                                               13
                             INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:

   •   Effectiveness and efficiency of operations,
   •   Reliability of financial reporting, and
   •   Compliance with applicable laws and regulations.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.


 Relevant Internal Controls


              We determined the following internal controls were relevant to our audit objectives:

              •       Policies and procedures that management has implemented to reasonably
                      ensure that resource uses are consistent with laws and regulations.

              •       Policies and procedures that management has implemented to reasonably
                      ensure that resources are safeguarded against waste, loss, and misuse.

              We assessed the above controls.

              A significant weakness exists if management controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.

 Significant Weaknesses


              Based on our review, we believe the following item is a significant weakness:

              •       The City lacked adequate controls and procedures to ensure compliance
                      with HUD requirements (see finding 1).




                                                14
                                   APPENDIXES

Appendix A
              SCHEDULE OF QUESTIONED COSTS
             AND FUNDS TO BE PUT TO BETTER USE


       Recommendation                                               Funds to be put
           number            Ineligible 1/    Unsupported 2/        to better use 3/
             1A                 $277,911
             1B                                                            $477,373
             1G                                      $196,657
             1H                  $92,129             _______                _______

             Total              $370,040             $196,657              $477,373

1/   Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
     that the auditor believes are not allowable by law; contract; or federal, state, or local
     policies or regulations.

2/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of audit. Unsupported costs
     require a decision by HUD program officials. This decision, in addition to obtaining
     supporting documentation, might involve a legal interpretation or clarification of
     departmental policies and procedures.

3/   Recommendations that funds be put to better use are estimates of amounts that could be
     used more efficiently if an Office of Inspector General (OIG) recommendation is
     implemented. This includes reductions in outlays, deobligation of funds, withdrawal of
     interest subsidy costs not incurred by implementing recommended improvements,
     avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
     which are specifically identified. In this instance, if our recommendations are
     implemented, HUD will recapture the $477,373 not committed by the required deadline.




                                             15
Appendix B
        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




                         16
Comment 1




Comment 2




            17
Comment 2




Comment 2




            18
Comment 3




Comment 4




Comment 5




            19
Comment 6




Comment 7




Comment 8




Comment 9




            20
Comment 10




             21
                         OIG Evaluation of Auditee Comments

Comment 1   The City acknowledges its non-compliance and agrees the funds are subject to
            recapture. The City should reimburse $277,911 to the United States Treasury
            trust fund account from nonfederal funds.

Comment 2   The City agreed that $477,373 in HOME funds were not committed within the
            statutory requirement of 24-months. The City stated that of the $477,373 in
            HOME funds, it obligated $43,778 to three projects under the year 2003 rental
            rehabilitation program. However, the City obligated the $43,778 after the
            expiration of the 24-month commitment deadline; therefore, HUD should
            recapture the funds.

Comment 3   The City stated it has developed and implemented procedures to ensure that
            HOME funds are committed in compliance with the required commitment
            deadline dates. The City provided a copy of its HOME procedures for
            committing HOME funds and HOME project tracking log. The procedures were
            provided after we completed our site work. Thus, we did not verify the
            information. The City should provide its new procedures for committing and
            tracking HOME funds to HUD.

Comment 4   The City responded it has developed and is in the process of implementing the
            procedures for entering HOME project data in Integrated Disbursement and
            Information System. The City included its procedures for entering Integrated
            Disbursement and Information System data and the applicable forms. The
            procedures were provided after we completed our site work. Thus, we did not
            verify the information. The City should provide its new procedures for entering
            HOME project data in the Integrated Disbursement and Information System to
            HUD.

Comment 5   The City commented that staff reviewed all open HOME projects and determined
            the need to reprogram funds from completed projects and to undertake new
            projects. The City provided a chart listing open HOME projects and projects that
            are having their funds reprogrammed. Since the chart was provided after we
            completed our site work, we did not verify the information. The City should
            provide its chart listing all open HOME projects to HUD.

Comment 6   The City stated that staff has implemented procedures to assist in reviewing all
            applications before awarding funds. The City provided an underwriting checklist,
            a house plans form, and a compliance review checklist. The information was
            provided after we completed our site work. Therefore, we did not verify the
            information. The City should provide the information to HUD for review.




                                            22
Comment 7     The City stated that it obtained adequate supporting documentation to substantiate
              $305,235 of the $392,540 in questioned costs. The City concluded that $87,304 is
              subject to repayment. Based on the supporting documentation provided, we
              determined that $196,657 of the $392,540 remains unsupported. We revised the
              report to reflect the revised unsupported costs.

Comment 8     The City reviewed the agency clients’ income documentation and agreed that the
              units were not sold to individuals who met the HOME program’s income limits.
              The City stated the $60,000 for project 963 is included under recommendation 1G
              which is subject to repayment. The City accepts responsibility and the $92,129 is
              also subject to repayment. We agree that projects 963and 1236 did not result in
              units being sold to individuals who met the HOME program’s income limits. We
              also agree with the City that the $60,000 for project 963 is included under
              recommendation 1G. We revised the report to reflect that $92,129 for project
              1236 should be reimbursed to the United States Treasury trust fund account from
              nonfederal funds for this recommendation.

Comment 9     The City responded it has developed and implemented the HOME income
              eligibility determination worksheet. The City also responded that the worksheet
              was distributed to all the CHDOs. According to the City, staff performs quarterly
              on-site monitoring of CHDOs to review project and client records, check on
              progress of the projects, and provide technical assistance. The documentation
              was provided after we completed our site work. Thus, we did not verify the
              information. The City should provide its documentation to HUD.

Comment 10 The City has not hired and trained sufficient staff to effectively administer its
           HOME program. We acknowledge that the City plans to hire an assistant director
           in housing development. However, the City did not address the hiring of a full-
           time permanent financial officer. The City also did not address the continuing
           training needs of its staff.




                                              23
Appendix C
                    SCHEDULE OF FUNDS NOT
              COMMITTED BY THE REQUIRED DEADLINE
                                                                       Days
                                                      Actual          past 24-
 Project      Program          Required           commitment           month
 number         year        commitment date            date           deadline       Amount           Notes
                              Funds still not committed as of January 28, 2008
 1316          2004           Apr. 30, 2006        See note A           637             $67,350        B, C
 1317          2004           Apr. 30, 2006        See note A           637             $74,218        B, C
 1530          2005           May 31, 2007         See note A           241           $210,000         B, C
 1536          2003          May 31, 2005          See note A           971             $77,383        B, C
 1537          2004           Apr. 30, 2006        See note A           637             $48,422        B, C
 Subtotal                                          See note A                         $ 477,373
                                  Funds committed after 24-month deadline
  954          2003           May 31, 2005          Jan. 3, 2006         216          $185,782          B
 1514          2005           May 31, 2007         July 10, 2007          39            $92,129         B
 Subtotal                                                                             $ 277,911
 Total                                                                                $ 755,284
 Notes
   A        Funds still not committed as of January 28, 2008. The 24-month commitment period has expired.
   B        The costs associated with these projects are not allowed because the City did not commit the funds
            by the 24-month commitment deadline. Regulations at 24 CFR 92.500(d)(1) state that HUD will
            recapture or reduce HOME funds in the HOME trust fund by the amount of any funds in the U.S.
            Treasury account that are not committed within 24 months after the last day of the month in which
            HUD notifies the participating jurisdiction of HUD’s execution of the HOME agreement.
            Regulations at 24 CFR 92.2 define commitment as an executed legally binding agreement to use a
            specific amount of HOME funds to produce affordable housing, an executed written agreement
            reserving a specific amount of funds to a community housing development organization, or having
            met the requirements to commit to a specific local activity.
   C        The City had not drawn down these funds at the time of our review.




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