Issue Date
September 28, 2010
Audit Report Number
2010-KC-1008
TO: Ray E. Willis, Director, Region V, Office of Community Planning
and Development, 5AD
//signed//
FROM: Ronald J. Hosking, Regional Inspector General for Audit, 7AGA
SUBJECT: The City of East St. Louis Awarded Block Grant Program Funds to Recipients
Without Adequately Verifying Their Eligibility
HIGHLIGHTS
What We Audited and Why
We audited the City of East St. Louis’ (City) Community Development Block
Grant (Block Grant) program because it is the 10th largest recipient in the State of
Illinois and is the largest Illinois recipient of Block Grant funds outside the
Chicago area.
The objective of our review was to determine whether the City properly verified
the eligibility of Block Grant-funded housing rehabilitation recipients.
What We Found
The City awarded more than $1.2 million in Block Grant funds to 143 recipients
without adequately verifying their eligibility to receive housing rehabilitation
assistance. Specifically it did not verify eligibility criteria such as evidence of
flood insurance, homeowners insurance, code compliance, and income eligibility.
What We Recommend
We recommend that the U.S. Department of Housing and Urban Development
(HUD) require the City to provide supporting documentation or reimburse its
Block Grant program for more than $1.2 million expended on ineligible
recipients. Additionally, we recommend that HUD require the City to develop
and implement a quality assurance plan to ensure that all program recipients meet
program eligibility requirements and provide training to ensure future compliance.
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 the discussion draft of the audit report to the City on September 10,
2010. The City provided its written comments on September 24, 2010. It
generally disagreed with our finding, but did agree that its documentation was not
complete and accepted the majority of our recommendations.
The complete text of the auditee’s response, along with our evaluation of that
response, can be found in appendix B of this report.
2
TABLE OF CONTENTS
Background and Objective 4
Results of Audit
Finding 1: The City Awarded Block Grant Program Funding to 143 Recipients 5
Without Adequately Verifying Their Eligibility
Scope and Methodology 9
Internal Controls 10
Appendixes
A. Schedule of Questioned Costs 11
B. Auditee Comments and OIG’s Evaluation 12
C. Schedule of Deficiencies 14
D. Criteria
20
3
BACKGROUND AND OBJECTIVE
Title I of the Housing and Community Development Act of 1974 established the Community
Development Block Grant (Block Grant) program, a flexible program that provides communities
with resources to address a wide range of unique community development needs. According to
24 CFR (Code of Federal Regulations) 570.202(a)(1), one permitted use of Block Grant funds is
to finance the rehabilitation of privately owned buildings and improvements for residential
purposes.
The City of East St. Louis (City) participates in the Block Grant program as an entitlement
community. These grants are allocated to larger cities and urban counties to develop viable
communities by providing decent housing, a suitable living environment, and opportunities to
expand economic opportunities, principally for low- and moderate-income persons. The U.S.
Department of Housing and Urban Development (HUD) determines the amount of each
entitlement grant by a statutory dual formula which measures community needs in relationship to
those of other metropolitan areas. The City received almost $3.7 million for fiscal years 2007
and 2008 combined. It used these funds for several purposes including housing rehabilitation,
code enforcement, and public services.
The City’s Block Grant program is currently administered by its Community Development
Department (Department), which is located in the City’s municipal building. Additionally, the
City is subject to the Financially Distressed City Law and is accordingly under the control of the
State-established East St. Louis Financial Advisory Authority, which provides oversight and
assistance. The City had a home repair program, senior modification program, and the
emergency home repair program with maximum grant amounts of $15,000, $9,999, and $9,999,
respectively, in 2008. Through these housing rehabilitation programs, the City addressed the
national objective of meeting substandard housing concerns and ensuring decent housing and a
suitable living environment for low- to moderate-income homeowners.
This is our second audit report on the City’s Block Grant program. Our first report disclosed that
the City did not properly allocate $917,669 and $58,205 in salary and building expenses,
respectively, or properly document its process for securing a $49,924 consulting services
contract (report number 2010-KC-1003, dated March 26, 2010).
Our objective was to determine whether the City properly verified the eligibility of Block Grant-
funded housing rehabilitation recipients.
4
RESULTS OF AUDIT
Finding 1: The City Awarded Block Grant Program Funding to 143
Applicants Without Adequately Verifying Their Eligibility
The City awarded Block Grant program funding to 143 recipients without adequately verifying
their eligibility to receive housing rehabilitation assistance. This deficiency occurred because the
City had inadequate controls over the recipient eligibility screening process. As a result, it could
not support that it properly spent more than $1.2 million of its Block Grant funds.
The City awarded Block Grant program funding to 143 of 147 applicants reviewed without
adequately verifying their eligibility to receive housing rehabilitation assistance. It selected
these applicants for home improvements through the home repair, senior modification, and
emergency home repair programs. Appendix C contains a schedule of the deficiencies identified in
each of the 143 applications reviewed.
The City Did Not Properly
Verify Applicant Eligibility
Grants Without Evidence of Income Eligibility
The City provided grants to 23 applicants without obtaining documentation
showing that they were income eligible. Regulations at 24 CFR 570.506(b)(4)(iii)
require that the City maintain records to show the size and income of each
household occupying rehabilitated housing. In addition, 24 CFR 570.208(a)(3)
requires that the applicants for housing rehabilitation assistance not exceed
HUD’s moderate income guidelines. For project #1749, the City did not
adequately document the homeowner’s income as it possibly exceeded the income
limits for eligibility. It did not use the homeowner’s most recent Social Security
income information, and the homeowner was less than $200 below the limit in the
previous year. For project #1724, the City did not consider indications that there
was an additional resident living in the house. In this project, the trash bill was
listed under a name that was not on the application, and the City did not document
the income of this person.
Grants Without Evidence of Lottery Winnings
The City provided two grants to applicants without providing documentation that
they went through a lottery process to receive home repair assistance. City
procedures state that a lottery system should be used to select eligible low- to
moderate-income participants for the home repair program. The City did not
provide records of the lottery drawing.
5
Grants Without Evidence of Homeownership or Residency
The City provided grants to seven applicants without providing documentation
that they owned or were living in the assisted houses. City procedures state that
eligible applicants must be the owners of the property and living in the home. For
project #1728, county and Social Security records revealed that the homeowner
was living in the State of Tennessee. The City had access to this information but
repaired the homeowner’s house in East St. Louis. For project #1606, the
applicant had a rent-to-own agreement on the house, which is prohibited by City
policy. The City repaired the house.
Grants With Outdated Documents and Previously Assisted Applicants
The City provided grants to eight applicants that had been previously assisted,
some of which had outdated eligibility documentation. City procedures state that
applicants cannot receive grants for rehabilitation or home buyer’s assistance
more than once within 5 years. For project #1593, the City improperly awarded a
grant to an applicant in 2008 who received assistance in 2004. The City used the
documents submitted in 2004 to determine her eligibility in 2008.
Grants Without Evidence of Insurance, Tax, or Code Compliance
The City provided 134 grants to applicants without providing documentation
showing that they had homeowners’ insurance policies in force, paid their
property taxes, or complied with local codes. City policy requires applicants to
provide proof of homeowner’s insurance and paid taxes before receiving
rehabilitation assistance. In addition, homeowners will be disqualified if they
violate local codes. The application further explains that some of the criteria for
disqualification are inoperable vehicles in yard; tall weeds; poor sanitary
conditions such as pests, rodents, and garbage; and the unsound structure of the
home.
In the case of project #1837, the City did not document compliance with local
codes as the inspector did not completely fill out the initial inspection form. In
addition, the City obtained a homeowner’s insurance application and policy
declaration page but no evidence that the homeowner had paid the policy
premium or the property taxes.
Grants Without Evidence of Environmental Compliance
The City provided 96 grants to applicants without documenting flood insurance,
compliance with the National Historical Preservation Act, or environmental
review requirements. Regulations at 24 CFR 570.200(a)(4) require the City to
comply with the environmental review procedures set forth in 24 CFR Part 58.
This regulation requires adherence to floodplain management, historic properties,
and HUD environmental standards, among other requirements. Regulations at 24
6
CFR 58.6(a)(1)(ii) require that when a community is participating in the National
Flood Insurance Program, flood insurance protection is to be obtained as a
condition of the approval of financial assistance to the property owner.
Regulations at 36 CFR 800.3 require the City to determine whether any proposed
rehabilitation work might have the potential to affect any historic properties. It
also requires the City to identify and consult with the appropriate State historic
preservation officer. In addition, 24 CFR Part 58 requires the City to comply with
environmental review requirements to ensure that all properties that are proposed
for HUD programs are free of hazardous materials when a hazard could affect the
health and safety of occupants or conflict with the intended use of the property.
In the case of project #1685, the City did not obtain a flood insurance policy,
obtain a letter from the Illinois Historic Preservation Agency, or complete an
environmental checklist.
Controls Over Recipient
Eligibility Screening Were
Inadequate
The City had inadequate controls over the recipient eligibility screening process.
Supervisory Review
The City did not require that supervisors review eligibility determinations. For
each applicant, either an intake specialist or supervisor obtained the applicant’s
documents and determined his or her eligibility. The City’s home rehabilitation
policies and procedures did not require supervisory reviews to be performed by a
second person at the point of determining eligibility. In addition, the City did not
have a quality control plan that required a periodic review of a sampling of the
files either before or after the award. Supervisory review is critical and ensures
that errors in processing are promptly detected and rectified and that staff is given
adequate guidance.
Training
The City did not provide adequate training to staff members to handle red flags in
the submitted documentation. While the staff members had received general
Block Grant program training more than 4 years earlier, since then, they had not
received any Block Grant program training related to determining the eligibility
of applicants. Regular program training is necessary to ensure that staff members
have the most up-to-date knowledge. Properly trained staff members are
necessary to ensure that various red flags in the files are identified and resolved.
These red flags might not necessarily indicate that the applicants are ineligible,
but they need to be resolved to ensure that only eligible applicants receive
assistance. Staff members need to be able to review income, residency, insurance,
and other documents for indications that the applicant might be ineligible for
rehabilitation assistance.
7
The City Misspent Block Grant
Funds
As a result of the conditions described above, the City could not support that it
properly spent more than $1.2 million of its Block Grant funds. The following
table lists the unsupported grants by program year and program type.
Unsupported grants identified by program and year
Program year
Program type 2006 2007 2008
Emergency repair $ 18,590 $ 203,129 $ 437,534
Senior modification $ 0 $ 63,000 $ 241,220
Home repair $ 4,938 $ 60,419 $ 200,164
Total $ 23,528 $ 326,548 $ 878,918
Conclusion
The City had inadequate controls and could therefore not support that it properly
spent more than $1.2 million of its Block Grant funds. It needs to provide
supporting documentation to HUD or reimburse its Block Grant program from
non-Federal funds for any grants awarded to ineligible recipients. In addition, the
City should develop and implement a quality assurance plan to ensure that all
program recipients meet program eligibility requirements and provide training to
ensure future compliance.
Recommendations
We recommend that the Director of the HUD Chicago Office of Community
Planning and Development require the City to
1A. Provide documentation showing that the recipients were eligible or reimburse
its Block Grant program $1,228,994 expended on ineligible recipients.
1B. Develop and implement a quality assurance plan to ensure that all program
recipients meet program eligibility requirements.
1C. Provide training to staff members to ensure that they properly determine the
eligibility of program applicants.
8
SCOPE AND METHODOLOGY
To accomplish our objectives, we reviewed applicable laws and regulations, interviewed City
staff, and reviewed City policies and procedures.
We used reports obtained from HUD’s Integrated Disbursement and Information System as
background information for our review. The reports from this information system revealed that
there were 364 homeowner repair projects with at least one drawdown during the 5 year period
covering March 2005 through February 2010. The total funded amount for these projects was
$3,311,455. Specifically, we used the reports to select all homeowners that received at least
$5,000 in housing rehabilitation assistance from March 2008 through February 2010. We also
selected any homeowners receiving housing rehabilitation assistance between March 2005
through February 2010 who either received assistance more than once during the 5-year period
or whose name or address matched employees, elected officials, or contractors of the City. This
process led to a sample of 147 projects. However, we did not rely on these data for our
conclusion. All conclusions were based on additional reviews performed during the audit.
We reviewed the projects’ files identified through our sample selection process to determine
whether the applicants met the eligibility criteria set by the City and Block Grant program
requirements. We also verified property ownership and tax records on the St. Clair County
Assessor’s Web site and flood risk assessments on the National Flood Insurance Program Web
site as needed.
Our audit period generally covered March 2008 through February 2010, and we expanded it as
explained in the sample selection above. We performed our audit work onsite at the City’s
municipal building located at 301 River Park Drive, East St. Louis, IL, from March to August
2010.
We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.
9
INTERNAL CONTROLS
Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to
Effectiveness and efficiency of operations,
Reliability of financial reporting, and
Compliance with applicable laws and regulations.
Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined that the following internal controls were relevant to our audit
objectives:
Controls to ensure that Block Grant funds were disbursed only to eligible
recipients.
We assessed the relevant controls identified above.
A deficiency in internal control exists when the design or operation of a control does
not allow management or employees, in the normal course of performing their
assigned functions, the reasonable opportunity to prevent, detect, or correct (1)
impairments to effectiveness or efficiency of operations, (2) misstatements in
financial or performance information, or (3) violations of laws and regulations on a
timely basis.
Significant Deficiency
Based on our review, we believe that the following item is a significant deficiency:
The City did not have adequate controls in place to ensure that Block Grant
rehabilitation funds were disbursed only to eligible recipients.
10
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
Recommendation Unsupported
number 1/
1A $1,228,994
1/ 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 the 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.
11
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
Comment 1
Comment 2
12
OIG Evaluation of Auditee Comments
Comment 1 During the audit, we requested all of the files for the projects in our sample. The
City provided its fiscal and program files for these projects which did not always
contain proper supporting documentation. Without the required documentation,
the City cannot prove that it verified the eligibility of the recipients.
Comment 2 The City’s efforts to implement changes should help ensure compliance with laws
and regulations and improve its day-to-day operations.
13
Appendix C
SCHEDULE OF DEFICIENCIES
Outdated eligibility Documentation
Potential undocumented resident
Applicant not living in the house
Previous assistance within 5 yrs
Missing environmental review
Income improperly calculated
Proof of paid property taxes
Incomplete code inspection
Historic Preservation Act
Homeowners’ insurance
Ownership of house
Lottery evidence
Flood insurance
IDIS* Amount
# # Program paid
1 1409 Home Repair $4,938 x x
2 1433 Emergency $4,850 x x x x x
3 1455 Home Repair $3,450 x x
4 1458 Home Repair $4,650 x x x
5 1497 Emergency $4,990 x x
6 1499 Emergency $4,050 x x x x x x x
7 1502 Home Repair $4,463 x x
8 1521 Emergency $4,700 x a
9 1535 Home Repair $5,200 x
10 1540 Emergency $4,500 x x a
11 1544 Emergency $5,000 x x
12 1546 Emergency $8,550 x a
13 1550 Senior $5,985 x x
14 1556 Emergency $9,800 x x
15 1569 Home Repair $5,257 x
16 1572 Home Repair $9,000 x x
17 1573 Home Repair $13,750 x x x
18 1574 Home Repair $14,650 x x x
19 1575 Senior $8,950 x x
20 1576 Senior $7,500 x
21 1577 Senior $10,000 x
22 1578 Senior $8,250 x x x x
23 1579 Senior $7,315 x x x x
24 1581 Senior $9,000 x x
14
Outdated eligibility Documentation
Potential undocumented resident
Applicant not living in the house
Previous assistance within 5 yrs
Missing environmental review
Income improperly calculated
Proof of paid property taxes
Incomplete code inspection
Historic Preservation Act
Homeowners’ insurance
Ownership of house
Lottery evidence
Flood insurance
IDIS* Amount
# # Program paid
25 1586 Emergency $10,000 x
26 1587 Emergency $8,600 x x a
27 1588 Emergency $6,033 x x x
28 1589 Emergency $9,950 x
29 1590 Emergency $15,390 x x
30 1591 Emergency $8,900 x
31 1592 Emergency $9,925 x x
32 1593 Emergency $5,000 x x
33 1594 Emergency $8,100 x x
34 1596 Emergency $9,325 x
35 1597 Emergency $9,400 x x
36 1598 Emergency $4,950 x x
37 1604 Emergency $15,400 x x
38 1605 Emergency $7,630 x
39 1606 Emergency $8,800 x x x
40 1607 Emergency $8,752 x x a
41 1608 Emergency $6,204 x
42 1609 Emergency $7,070 x a
43 1610 Emergency $8,650 x
44 1618 Emergency $7,200 x x
45 1619 Senior $6,000 x x x x
46 1665 Senior $9,300 x x x
47 1666 Senior $7,100 x x
48 1667 Senior $9,000 x x x x
49 1668 Home Repair $7,100 x x x x x
50 1669 Senior $9,425 x x x
51 1670 Senior $9,400 x x
52 1671 Senior $5,000 x x x x x
53 1672 Senior $8,055 x x x x x x
15
Outdated eligibility Documentation
Potential undocumented resident
Applicant not living in the house
Previous assistance within 5 yrs
Missing environmental review
Income improperly calculated
Proof of paid property taxes
Incomplete code inspection
Historic Preservation Act
Homeowners’ insurance
Ownership of house
Lottery evidence
Flood insurance
IDIS* Amount
# # Program paid
54 1673 Senior $5,600 x x x
55 1674 Emergency $9,950 x x x
56 1675 Emergency $9,600 x x
57 1680 Emergency $9,000 x x a
58 1681 Emergency $7,300 x x x
59 1682 Emergency $6,500 x x
60 1683 Emergency $7,700 x x x
61 1685 Senior $9,700 x x x x
62 1686 Senior $6,800 x x x
63 1687 Senior $9,895 x x
64 1688 Senior $9,900 x x
65 1689 Emergency $13,162 x x x
66 1690 Emergency $9,200 x
67 1691 Emergency $9,975 x
68 1692 Emergency $6,500 x
69 1693 Emergency $9,150 x
70 1694 Emergency $9,400 x x
71 1695 Emergency $9,999 x
72 1696 Emergency $8,200 x x
73 1699 Emergency $7,250 x
74 1701 Emergency $9,500 x x x
75 1702 Emergency $8,100 x
76 1705 Senior $9,920 x x x x
77 1709 Emergency $9,800 x x
78 1711 Emergency $9,500 x x
79 1713 Emergency $9,995 x
80 1714 Senior $8,650 x x x
81 1715 Senior $9,220 x x x X
82 1717 Home Repair $8,150 x
16
Outdated eligibility Documentation
Potential undocumented resident
Applicant not living in the house
Previous assistance within 5 yrs
Missing environmental review
Income improperly calculated
Proof of paid property taxes
Incomplete code inspection
Historic Preservation Act
Homeowners’ insurance
Ownership of house
Lottery evidence
Flood insurance
IDIS* Amount
# # Program paid
83 1718 Home Repair $8,750 x x x x
84 1719 Senior $7,800 x x x
85 1720 Home Repair $10,000 x
86 1721 Emergency $9,950 x x x
87 1722 Home Repair $10,400 x x
88 1723 Home Repair $7,665 x x
89 1724 Home Repair $8,840 x x
90 1726 Home Repair $9,980 x x
91 1727 Home Repair $7,950 x x x x
92 1728 Emergency $10,000 x x
93 1731 Emergency $8,500 x
94 1732 Emergency $4,895 x x
95 1736 Emergency $8,900 x x x
96 1739 Emergency $1,900 x x x x x x
97 1740 Home Repair $14,710 x x
98 1741 Home Repair $15,610 x x x
99 1742 Home Repair $13,135 x x x
100 1743 Home Repair $9,200 x x
101 1744 Home Repair $12,740 x x x
102 1745 Emergency $9,500 x x x x
103 1746 Emergency $9,400 x x x x
104 1747 Emergency $8,900 x x x x a
105 1749 Senior $9,250 x x x x X
106 1750 Home Repair $12,300 x x x
107 1751 Home Repair $12,994 x x x
108 1752 Emergency $6,900 x x x
109 1753 Emergency $6,800 x x x
110 1754 Emergency $9,700 x x
111 1757 Senior $7,725 x x x x
17
Outdated eligibility Documentation
Potential undocumented resident
Applicant not living in the house
Previous assistance within 5 yrs
Missing environmental review
Income improperly calculated
Proof of paid property taxes
Incomplete code inspection
Historic Preservation Act
Homeowners’ insurance
Ownership of house
Lottery evidence
Flood insurance
IDIS* Amount
# # Program paid
112 1758 Senior $8,800 x x x
113 1759 Emergency $7,300 x x x x
114 1769 Emergency $9,875 x x a
115 1770 Emergency $2,379 x x x
116 1776 Emergency $9,300 x x
117 1777 Emergency $8,800 x x x x
118 1778 Emergency $7,600 x x x x
119 1783 Senior $7,635 x x x
120 1784 Emergency $6,850 x
121 1789 Senior $8,550 x x x x
122 1790 Emergency $8,950 x x x x
123 1805 Emergency $8,900 x x x
124 1806 Emergency $7,400 x x x
125 1811 Emergency $8,850 x
126 1812 Senior $10,000 x x x
127 1814 Emergency $9,950 x x x x
128 1815 Home Repair $10,325 x x
129 1816 Home Repair $13,600 x x
130 1817 Emergency $8,400 x x x
131 1823 Emergency $10,025 x x
132 1824 Emergency $9,850 x x
133 1827 Home Repair $6,715 x x x
134 1830 Emergency $10,000 x x
135 1832 Emergency $9,350 x x
136 1833 Emergency $8,720 x x
137 1834 Senior $9,975 x
138 1836 Senior $7,520 x x x x
139 1837 Senior $8,500 x x x x x
140 1838 Senior $9,100 x x x x
18
10
Missing environmental review
73
Historic Preservation Act
x
x
x
41
Flood insurance
x
a – For these projects, the City obtained the State historical preservation clearance after the
122
Incomplete code inspection
x
x
x
7
Proof of paid property taxes
x
68
Homeowners’ insurance
x
3
Outdated eligibility Documentation
8
Previous assistance within 5 yrs
3
Applicant not living in the house * IDIS = Integrated Disbursement and Information System
4
Ownership of house
2
Lottery evidence
19
rehabilitation work was completed.
Potential undocumented resident 14
x
10
Income improperly calculated
$10,000
$9,909
$1,228,994
$9,400
Amount
paid
Emergency
Program
Senior
Senior
1839
1843
IDIS*
1842
#
141
143
142
#
Appendix D
CRITERIA
Code of Federal Regulations and United States Code
Regulations at 24 CFR 58.5 state that the responsible entity must certify that it has complied with
the requirements that would apply to HUD under these laws and authorities and must consider
the criteria, standards, policies, and regulations of these laws and authorities. The listed items
that follow are historic properties, floodplain management and wetland protection, coastal zone
management, sole-source aquifers, endangered species, wild and scenic rivers, air quality,
farmland protection, HUD environmental standards, and environmental justice.
Regulations at 24 CFR 58.5(i)(2)(i) state that it is HUD policy that all properties that are being
proposed for use in HUD programs be free of hazardous materials, contamination, toxic
chemicals and gases, and radioactive substances where a hazard could affect the health and
safety of occupants or conflict with the intended utilization of the property.
Regulations at 24 CFR 58.6(a)(1)(ii) state that where the community is participating in the
National Flood Insurance Program, flood insurance protection is to be obtained as a condition of
the approval of financial assistance to the property owner.
Regulations at 24 CFR 58.10 state that the responsible entity must assume the environmental
responsibilities for projects under programs cited in section 58.1(b). In doing so, the responsible
entity must comply with the provisions of National Environmental Policy Act and the Council on
Environmental Quality regulations contained in 40 CFR Parts 1500 through 1508, including the
requirements set forth in this part.
Regulations at 24 CFR 570.200(a)(4), Compliance with environmental review procedures, state
that the environmental review procedures set forth at 24 CFR Part 58 must be completed for each
activity (or project as defined in 24 CFR Part 58), as applicable.
Regulations at 24 CFR 570.202(a)(1) state that Block Grant funds may be used to finance the
rehabilitation of privately owned buildings and improvements for residential purposes.
Regulations at 24 CFR 570.208(a)(3) state that housing activities are eligible activities carried
out for the purpose of providing or improving permanent residential structures which, upon
completion, will be occupied by low- and moderate-income households. This would include but
not necessarily be limited to the acquisition or rehabilitation of property by the recipient, a
subrecipient, a developer, an individual home buyer, or an individual homeowner; conversion of
nonresidential structures; and new housing construction.
Regulations at 24 CFR 570.506(b)(4)(iii) state that for each activity carried out for the purpose of
providing or improving housing, which is determined to benefit low- and moderate-income
20
persons, the recipient must document the size and income of the household for each unit
occupied by a low- and moderate-income family.
Regulations at 36 CFR 800.3(a) state that the agency official shall determine whether the
proposed Federal action is an undertaking as defined in section 800.16(y) and if so, whether it is
a type of activity that has the potential to cause effects on historic properties.
Regulations at 36 CFR 800.3(c) state that as part of its initial planning, the agency official shall
determine the appropriate State Historic Preservation Officer (SHPO) or Tribal Historic
Preservation Officer (THPO) to be involved in the Section 106 process. The agency official
shall also determine whether the undertaking may occur on or affect historic properties on any
tribal lands and if so, whether a THPO has assumed the duties of the SHPO. The agency official
shall then initiate consultation with the appropriate officer or officers.
Federal statutes at 16 U.S.C. (United States Code) 470.101(b)(3)(J) state that it shall be the
responsibility of the SHPO to administer the State Historic Preservation Program and to advise
and assist in the evaluation of proposals for rehabilitation projects that may qualify for Federal
assistance.
City Criteria
Home Repair Program
The Home Repair Program is designed to assist homeowners in the city of East St. Louis with
making repairs to their homes of qualified applicants. The maximum amount available will be
$15,000.
To Qualify:
- Persons must live in East St. Louis
- Household income must not exceed HUD moderate income guidelines
- Persons are to fill out application and provide proof of income for all household
members, proof of ownership, proof of paid taxes, and proof of homeowners
insurance, and or proof of flood insurance if in a flood plain. (Insurance is to be
provided prior to work starting)
- Persons will sign a lead certification and home repair information sheet
Examples of Eligible Repairs include:
- Roofing repair/replacement
- Windows
- Storm/prime doors
- Weather stripping/siding
21
- Electrical and plumbing
All applications will be issued on a lottery drawing. The maximum amount of the grant will not
exceed $15,000. The amount is based on the inspector’s determination and bid price. If the
amount needed to address the home repair is more than $15,000, CDBG will allow the
homeowner to supplement the additional funds needed. Additional funds must be paid to CDBG
prior to signing the contract and will be held by CDBG until work is complete. This will assure
the funds are available to pay the contractor. If the homeowner does not have the additional
funds necessary over $15,000, the project will be denied.
The CDBG inspector will inspect the home to determine the needed repairs. The inspector will
inspect all phases of the work through completion. The inspector will then request payment;
homeowner will be requested to sign the final pay request. No interim payments will be made to
contractors – only final payments when the work is complete. All checks will be issued in the
name of the contractor or the contractor and the financial institution, based on the signed contact.
Senior Modification and Emergency Home Repair
The Senior Modification program is designed to assist seniors 62 years and older, with
emergency repairs only. The program is designed for families who have an emergency that is a
hindrance to the family and or home. The maximum amount available will be $9, 999.00.
The Emergency Home Repair program is designed to assist homeowners with emergency
repairs. The program is designed for families who have an emergency that is a hindrance to the
family and or home. The maximum amount available will be $9, 999.00.
To Qualify:
- Persons must live in East St. Louis
- Household income must not exceed HUD moderate income guidelines
- Persons are to fill out application and provide proof of income for all household
members, proof of ownership, proof of paid taxes, and proof of homeowners
insurance, and or proof of flood insurance if in a flood plain. (Insurance is to be
provided prior to work starting)
- Persons will sign a lead certification and home repair information sheet
- Applicants must be the owner of the property and living in the home (NO BOND
FOR DEEDS).
- Must be a single family unit
Examples of Eligible Repairs include:
- Roofing repair/replacement
- Electrical and plumbing
- HVAC
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The amount is based on inspector’s determination and bid price not to exceed $9,999.00. If the
amount needed to address the emergency is more than $9,999.00, CDBG will allow the
homeowner to supplement the additional funds needed. The additional funds must be paid to
CDBG prior to signing the contract and will be held by CDBG until work is complete. This will
assure the funds are available to pay contractor. If the homeowner does not have the additional
funds necessary over $9,999.00 the project will be denied.
CDBG inspectors will inspect the home to determine the emergency needed. The inspector will
inspect all phases of the work through completion. The inspector will then request payment;
homeowners will be requested to sign the final request. No interim payments will be made to
contractors only final payments when work is complete. All checks will be issued in the name of
the contractor or the contractors and the financial institution, based on the signed contract.
Criteria for Disqualification for the Home Repair, Senior Modification, and Emergency
Home Repair programs:
- Applicant is not a resident of East St. Louis
- Applicant does not own the home
- Application is incomplete
- Information on the application and other documents are falsified
- Tax bills or debts to the City of East St. Louis are delinquent
- Poor sanitary conditions, pests, rodents, odors, garbage, etc.
- The structure of home is unsound and further attempts at improvement prove to be
hazardous and could further jeopardize its structure integrity
- Owner is violating local codes
- CDBG inspector would be endangering his personal safety by entering structure
- Applicant received grant for rehabilitation or homebuyer’s assistance within past 5
years
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The City of East St. Louis Awarded Block Grant Program Funds to Recipients Without Adequately Verifying Their Eligibility
Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-09-28.
Below is a raw (and likely hideous) rendition of the original report. (PDF)