oversight

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)

                                                                  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



                                                  22
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




                                                  23