oversight

City of Los Angeles Housing Department, Los Angeles, California, Did Not Ensure That the Noho Commons Housing Development Met HOME Program Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-10-28.

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

                                                                   Issue Date
                                                                          October 28, 2009
                                                                   Audit Report Number
                                                                            2010-LA-1001




TO:         William Vasquez, Director, Los Angeles Office of Community Planning and
            Development, 9DD



FROM:       Joan S. Hobbs, Regional Inspector General for Audit, Region IX, 9DGA

SUBJECT: City of Los Angeles Housing Department, Los Angeles, California, Did Not
         Ensure That the NoHo Commons Housing Development Met HOME Program
         Requirements


                                     HIGHLIGHTS

 What We Audited and Why

      We audited the City of Los Angeles Housing Department (City) as the result of two
      complaints, which alleged violations of affordable housing and low-income housing tax
      credit regulations at the NoHo Commons housing development (development), which
      was partially funded with HOME Investment Partnerships Program (HOME) funds and
      administered by the Community Redevelopment Agency of Los Angeles (subrecipient).
      Our objective was to determine whether the alleged violations had merit and warranted
      further review. Specifically, we wanted to determine (1) the type and amount of U.S.
      Department of Housing and Urban Development (HUD) funding used and (2) whether
      the City administered its subrecipient and the development in accordance with pertinent
      HUD regulations.

 What We Found


      We identified the HUD funding used and found that the allegations had merit. The City
      improperly allocated HOME funds for the development without adequate controls in
      place to ensure compliance with HOME program requirements. Specifically, the City’s
      subrecipient did not ensure that the development’s management agent implemented a
      waiting list as established by its lottery and subsequent applications, correctly determined
      tenants’ income to establish eligibility, maintained adequate documentation supporting
     the use of the HOME funds, and implemented adequate monitoring policies and
     procedures for the development.

What We Recommend

     We recommend that HUD require the City to suspend all HOME funding to the
     subrecipient until acceptable monitoring policies and procedures have been implemented
     to ensure compliance with all HOME program requirements, reconstruct and establish a
     complete waiting list, and determine which eligible applicants were improperly bypassed
     and ensure that they are given first priority for housing as vacancies arise. We also
     recommend that both the City and the subrecipient establish and implement effective
     policies and procedures to ensure compliance with HOME regulations.

     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 City a draft report on September 18, 2009, and held an exit conference
     with City officials on October 2, 2009. The City provided written comments on October
     13, 2009. The City generally agreed with our report recommendations. The subrecipient
     also submitted a response in which it disagreed with the finding, but agreed to implement
     the recommendations.

     The complete text of the City and subrecipient’s response, along with our evaluation of
     that response, can be found in appendix A of this report. The subrecipient’s response
     also included 14 attachments which did not constitute the views of the responsible
     officials and were voluminous in nature. Therefore, we did not include the attachments,
     but they are listed in appendix A of the report. The attachments can be provided upon
     request.




                                             2
                          TABLE OF CONTENTS

Background and Objective                                                        4

Results of Audit
      Finding 1: The City Improperly Allocated HOME Funds for the Development to 6
                 Its Subrecipient without Adequate Controls to Ensure Compliance
                 with HOME Program Requirements

Scope and Methodology                                                           10

Internal Controls                                                               11

Follow-up on Prior Audits                                                       12

Appendix

   A. Auditee Comments and OIG’s Evaluation                                     14




                                          3
                      BACKGROUND AND OBJECTIVE

The HOME Program

The HOME Investment Partnerships Program (HOME) is authorized under Title II of the
Cranston-Gonzalez National Affordable Housing Act, as amended, and program regulations are
at 24 CFR [Code of Federal Regulations] Part 92. The HOME program is the largest federal
block grant given to state and local participating jurisdictions, designed exclusively to create
affordable housing for low-income households. The program’s flexibility allows participating
jurisdictions to use HOME funds for grants, direct loans, loan guarantees or other forms of credit
enhancement, rental assistance, or security deposits. The intent of the HOME program is to

       Provide decent affordable housing to lower income households,
       Expand the capacity of nonprofit housing providers,
       Strengthen the ability of state and local governments to provide housing, and
       Leverage private-sector participation.

The City

Los Angeles, California, is a participating jurisdiction which administers all of its HOME
programs under the City of Los Angeles’ Housing Department (City). The City typically awards
HOME funds to various subrecipients, developers, and private lenders. The City’s standard
procedures state that developers must apply for HOME funding from the City through a notice of
funding availability. The City’s Affordable Housing Trust Fund Unit receives applications and
then reviews and scores them using criteria established by the respective leveraging source
identified by the applicant.

However, the City did not use the standard procedures for funding the NoHo Commons
Development because, according to the City, the mayor and city council have authority to
allocate City funds outside the notice of funding availability process. Therefore, the City
allocated funding to its subrecipient using a cooperation agreement instead of standard
procedures.

The Subrecipient

The Community Redevelopment Agency of the City of Los Angeles (subrecipient) has been the
City’s independent public partner in housing, commercial, neighborhood, and economic
development, dedicated to revitalizing, refurbishing, and renewing economically underserved
areas of Los Angeles. Since its creation in 1948, its main task has been to lend a hand to
investors willing to take risks for a more vibrant city, to neighborhood residents with renewed
aspirations for their communities, and to those in need who strive to take part in the City’s
growing prosperity. In addition, it helps to increase the supply of housing for low- and
moderate-income families, provides infrastructure for commercial and industrial development,
and creates jobs necessary to maintain acceptable levels of employment. The subrecipient
receives funding from the City to help fund these activities.


                                                4
The Development

The NoHo Commons (development) is a 16.7-acre mixed-use campus designed to act as a
catalyst for the completion and revitalization of the commercial core in North Hollywood. The
development is located at the intersection of Chandler and Lankershim Boulevards. It consists of
three phases. NoHo Commons Phase I, called The Gallery at NoHo Commons, has 438 rental
units, of which 1151 are restricted to very low-, low-, and moderate-income households. NoHo
Phase II, called The Lofts at NoHo Commons, has 292 rental units, of which 282 are affordable
to very low-, low-, and moderate-income households. Phase III of the NoHo Commons
development is not complete as of the date of this report.3

Funding for the three phases of the development consists of both private and public funds
estimated at $235.6 million, of which more than $200 million in private investment is expected
to be used by development completion. We determined that HUD funds for the three phases of
the development consisted of a $14 million Section 108 loan, $1.8 million Economic
Development Initiative (EDI) grant, $3 million Community Development Block Grant (CDBG)
float loan, and $5 million in HOME funds as shown in the table below.

                 Funding type                         Amount                 Development phase
              HUD Section 108 loan                  $14 million                    I & II
                HUD EDI grant                       $1.8 million                   I & II
                 HOME grant                          $5 million                       I
                CDBG float loan                      $3 million                      III


Audit Objective

Our objective was to determine whether the alleged violations of affordable housing and low-
income housing tax credit regulations at the development had merit and warranted further
review. Specifically, we wanted to determine (1) the type and amount of HUD funding used and
(2) whether the City and the subrecipient administered the development in accordance with
pertinent HUD regulations.




1
  Only 40 of these units are HOME-assisted rental units.
2
  None of these units is a HOME-assisted rental unit.
3
  Although this phase is not complete, the $3 million in CDBG funding has been used for parcel acquisition.


                                                         5
                                 RESULTS OF AUDIT

Finding 1: The City Improperly Allocated HOME Funds for the
           Development to Its Subrecipient without Adequate Controls
           to Ensure Compliance with HOME Program Requirements
The City improperly allocated HOME funds for the development to its subrecipient without
adequate controls in place to ensure compliance with HOME program requirements.
Specifically, the subrecipient did not

    Ensure that the development’s management agent (agent) implemented a waiting list as
     established by the initial lottery and subsequent applications received;
    Ensure that the development’s agent correctly determined the tenants’ income to establish
     eligibility;
    Maintain adequate documentation supporting the use of the HOME funds; and
    Implement adequate monitoring policies and procedures for the development.

These conditions occurred because the City lacked written procedures and had insufficient
monitoring controls in place for projects that were not processed and administered through its
affordable housing trust fund process. As a result, while we were able to independently confirm
that the $5 million in HOME funds was used for eligible purposes, the City did not fulfill its
responsibility to HUD to ensure that the HOME program intent to provide affordable housing for
low-income households was fully met.




 Waiting List Not Implemented


       The development’s agent did not implement a waiting list as established by the lottery
       and subsequent applications received. We were provided multiple waiting lists; however,
       none of the lists was complete, and we were unable to establish which one was the
       official waiting list. In addition, the agent did not select or house individuals in the order
       listed on any of the waiting lists provided. Federal Regulations at 24 CFR 92.253(d)
       state, “An owner of rental housing assisted with HOME funds must adopt written tenant
       selection policies and criteria that: (4) Provide for the selection of tenants from a written
       waiting list in the chronological order of their application, insofar as is practical”.

       We acknowledge that a lottery is acceptable method to establish a waiting list for initial
       lease up when there is a large pool of applicants. However, we reviewed several lists
       provided by the subrecipient and its agent, and were unable to determine which list was
       the official waiting list and what process was used to offer housing to applicants. We


                                                 6
     interviewed a subrecipient staff member and the agent’s director of compliance who both
     stated that a waiting list was established during the initial lease-up process by using a
     lottery, in which applications were drawn from a box to establish the order, rather than
     compiling a list based on the order in which the applications had been received.

     We reviewed several incomplete lists provided by the subrecipient and its agent.
     Specifically, we reviewed the following:

            A hand-written list entitled “lottery 12/13/06 No Ho Gallery” (lottery);
            An Excel spreadsheet entitled “Inclusionary Waitlist”;
            A PDF file entitled “Lottery List for Inclusionary Program”; and
            A PDF file entitled “Waiting List.”

     We analyzed the various versions of the waiting lists and lottery lists and identified a
     number of inconsistencies. We compared the inclusionary waitlist to the hand-written
     “lottery” and determined that several individuals on the “lottery” did not appear on the
     waitlist and vice versa. For example, individuals listed as numbers 350, 359, 497, 498,
     535, and 544 shown on the waiting list and not on the lottery were housed, while others
     shown on the lottery had not been contacted to determine eligibility for lease-up. Further,
     the individual listed as number one on the “lottery,” “Lottery List for Inclusionary
     Program,” and “Waiting List” had not leased up.

     We determined that the waiting list and all documents related to the waiting list were
     inconsistent and haphazard. The agent’s inadequate record keeping caused several
     individuals in need of affordable housing to be bypassed, while others were offered
     housing prematurely.

     Documentation provided by the subrecipient in its response to this report further
     supported that the waiting list was not implemented, as it should have been. Specifically,
     the response stated that 318 applications were received for the 115 affordable units, then
     randomly selected to establish the chronological waiting list provided by the subrecipient
     in its response. Therefore this waiting list should have been completely exhausted by
     ensuring all 318 individuals had an opportunity to lease, be denied/disqualified, or
     decline. We determined that several individuals had been bypassed and no supporting
     documentation was provided to show why.

Tenants’ Income Calculations Not
Done Correctly


     We reviewed 17 tenant files, and found that for 10 (59 percent) of the files, the agent
     miscalculated the tenants’ income for one or more years of eligibility certifications. The
     subrecipient stated that at the time of initial income certification, HOME program
     eligibility was determined for all 17 applicants. However, we did not find any evidence
     to support this statement. The subrecipient provided an email and a document titled
     “Initial Rent and Occupancy” to support that initial occupancy was reviewed and


                                              7
           monitored. We determined that neither the email, nor the report adequately supported
           that the subrecipient monitored its agent. The miscalculations in the 17 tenant files we
           reviewed did not affect tenant program eligibility, however, it is possible that
           miscalculations could affect eligibility, allowing inappropriate acceptance into the
           program. Had the subrecipient monitored the agent as required, it might have detected
           the errors.

    Inadequate Supporting
    Documentation Maintained

           Although we were able to independently obtain supporting documentation from the
           developer, neither the City nor the subrecipient had adequate documentation to show that
           $5 million in HOME funding allocated for the development was used for eligible
           purposes. Specifically, the City only maintained disbursement records, which included a
           reimbursement request and an interdepartmental memorandum. The interdepartmental
           memorandum from the City’s finance department to its accounting department requested
           the draw of funds for the development but contained incorrect information, which
           included the wrong (1) cooperation agreement number, (2) development cross streets, and
           (3) Integrated Disbursement and Information System number.

           The City’s subrecipient also did not have adequate documentation to show that $5 million
           in HOME funding allocated to its developer was used for eligible purposes. The
           subrecipient was able to supply copies of a wire transfer of $2 million in HOME funding
           to Bank of America for reimbursement of parcel acquisition but was unable to provide
           documentation for the additional $3 million in HOME funds. Additionally, the wire
           transfer documentation did not identify the purchased parcels. Subrecipient accounting
           personnel stated that a credit of $3 million in HOME funding to the developer was
           supported by “using the grant agreement contract with the City and the owner
           participation agreement as supporting documentation.”4

    Lack of Monitoring Policies and
    Procedures

           The City did not have monitoring policies and procedures in place to ensure that its
           subrecipient administered the development in compliance with HOME regulations. The
           City placed the responsibility on its subrecipient by executing a cooperation agreement,
           which stated that the subrecipient “shall be solely responsible to monitor the use of Home
           Funds and maintain its own records.” Although the City had started to draft monitoring
           policies and procedures in response to a prior audit, the procedures were not in place at
           the time that it allocated HOME funds to its subrecipient.

           The City’s subrecipient did not have monitoring policies and procedures in place to
           ensure that its agent complied with HOME regulations. Instead, the subrecipient placed
4
    We obtained supporting documentation for the $3 million from the subrecipient’s developer.


                                                          8
    the burden of monitoring on the agent. The subrecipient’s housing policy manual states
    that owners will be required to complete a self-monitoring form to verify that tenants
    meet eligibility requirements and that affordable units fall within applicable rent limits.
    We determined that the subrecipient did not monitor the agent because it was only able to
    provide a blank occupancy summary report, a blank certificate of continuing program
    compliance, and a household characteristics report. None of these documents adequately
    supported compliance with HOME regulations.

Conclusion

    The City improperly allocated HOME funds for the development to its subrecipient
    without adequate controls in place to ensure compliance with HOME program
    requirements. This condition occurred because the City lacked written procedures and
    had insufficient monitoring controls in place for projects that were not processed and
    administered through its affordable housing trust fund process. As a result, although we
    were able to independently confirm that the $5 million in HOME funds was used for
    eligible purposes, the City did not fulfill its responsibility to HUD to ensure that the
    HOME program intent to provide affordable housing for low-income households was
    fully met.

Recommendations


    We recommend that the Director of the Los Angeles Office of Community Planning and
    Development require the City to

        1A. Suspend all HOME funding to the subrecipient until acceptable subrecipient
            monitoring policies and procedures are implemented to ensure compliance with
            all HOME program requirements.

        1B. Reconstruct and establish a waiting list that is complete and lists the applicants
            in order based on the lottery results and/or the date the applicants applied for
            housing after the lottery cut-off date.

        1C. Determine all eligible applicants that were improperly bypassed and ensure that
            they are given first priority for housing as vacancies arise for HOME-assisted
            rental units before other applicants are housed.

        1D. Ensure that the subrecipient establishes and implements effective written policies
            and procedures to ensure that its HOME-assisted developments comply with
            HOME regulations.

        1E. Establish and implement effective written policies and procedures for monitoring
            its subrecipients’ projects that were not processed and administered through its
            affordable housing trust fund process.



                                             9
                         SCOPE AND METHODOLOGY

We performed our on-site audit work from April through May 2009 at the subrecipient’s offices
in Los Angeles and North Hollywood, California, as well as the development’s agent’s office in
North Hollywood, California. The audit generally covered the period June 2004 through July
2009. We expanded our audit period as needed to accomplish our objective. We reviewed the
City’s compliance with applicable laws and HUD regulations. Our methodology included

       Reviews of documentation provided by complainants;
       Reviews of loan files, grant files, project files, and accounting records at the City and its
       subrecipient to obtain the source, amount, and supporting documentation for HUD
       funding used for the housing development;
       Reviews of escrow documentation provided by the developer;
       Interviews with pertinent personnel at the City, its subrecipient, and the development;
       Reviews of the City’s and its subrecipient’s policies and procedures for financing and
       monitoring HUD-funded properties;
       Reviews of relevant HUD regulations related to the HUD funding used;
       Reviews of tenant files at the development to determine whether tenant eligibility, unit
       affordability, and records maintenance complied with HOME regulations;
       Reviews of physical inspection reports provided by the City; and
       Reviews of waiting lists provided by the City’s subrecipient and the development.

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.




                                                 10
                              INTERNAL CONTROLS

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

       Program operations,
       Relevance and reliability of information,
       Compliance with applicable laws and regulations, and
       Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They 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 objective:

              Policies and procedures for the distribution of HOME funds to subrecipients.

              Policies and procedures for monitoring subrecipients that receive HOME funds.

       We assessed the relevant controls identified above.

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

 Significant Weaknesses

       Based on our review, we believe that the following items are significant weaknesses:

              The City did not have policies and procedures to ensure that HOME funding
              disbursed to its subrecipients was used for eligible purposes.

              The City did not have policies and procedures to ensure that subrecipients of
              HOME funding followed all HOME regulations for the entire affordability period
              (covenant period).




                                                11
                    FOLLOW-UP ON PRIOR AUDITS


Audit of the City of Los Angeles
Housing Department – HOME
Program Administration and
Monitoring, 2009-LA-1011,
dated July 1, 2009


     We audited the City as the result of problems noted during a prior audit involving
     HOME-funded activities administered by the Community Redevelopment Agency of the
     City of Los Angeles (subrecipient), which were not adequately monitored by the City,
     compounded by concerns stemming from various newspaper articles related to the
     Marlton Square project, which included the Buckingham Place Senior Affordable
     Housing (Buckingham Place) project. Our objective was to determine whether HUD
     funds awarded to Los Angeles and administered by the City were administered in
     accordance with HUD’s requirements for the HOME program as they relate to a specific
     subrecipient.

     We found that the City improperly allocated HOME funds for the Buckingham Place
     project to its subrecipient without adequate controls in place to ensure that HOME
     program requirements were met. This condition occurred because the City lacked written
     procedures and had insufficient monitoring controls in place for projects not processed
     and administered through its affordable housing trust fund process.

     We recommended that HUD require the City to provide documentation supporting the
     eligibility of the $8.5 million HOME investment for its proposal to complete the one
     partially completed building and have it ready for occupancy within two years of the date
     of the report or repay the funds from nonfederal sources. In addition, the City should
     establish and implement written procedures for projects administered by its subrecipients
     that are not processed through the affordable housing trust fund process. On October 21,
     2009, we entered into management decisions with HUD to correct the items in the
     recommendations, which have a target completion date of September 1, 2011.

Audit of the City of Los Angeles
Housing Department
Rehabilitation of Four HOME-
Funded Projects, 2009-LA-
1007, dated February 20, 2009

     We audited the City as a result of a prior audit (2008-LA-1016), which detected four
     projects that may not have been rehabilitated as intended. We found that the City did not
     always ensure that its HOME-assisted rehabilitation work was complete and in
     accordance with HOME requirements. Of the four projects, we found one project in


                                            12
     which the City paid $22,466 in HOME funds for incomplete rehabilitation work. On
     June 19, 2009, we entered into management decisions with HUD to correct the items in
     the recommendations, which have a target completion date of February 20, 2010.

Audit of the City of Los Angeles
Housing Department – HOME
Affordability Monitoring and
Inspections, 2008-LA-1016,
dated September 18, 2008

     We audited the City’s HOME affordability monitoring and inspection requirements
     regarding HOME-assisted rental units, prompted by a prior audit (2008-LA-1004), which
     detected problems in this area. We found that the City did not comply with HOME
     affordability monitoring and inspection requirements for its HOME-assisted rental
     housing. It failed to maintain the required tenant eligibility information for 26 HOME-
     assisted rental housing projects totaling nearly $38 million. In addition, it did not
     maintain complete tenant eligibility information, did not ensure that its contractor
     conducted occupancy monitoring in accordance with HOME program requirements, and
     failed to inspect HOME-assisted rental housing projects when required. On December 2,
     2008, we entered into management decisions with HUD to correct the items in the
     recommendations, which have a target completion date of December 2, 2009.




                                           13
Appendix A

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




                         14
15
16
17
Comment 1




            18
Comment 2




Comment 3




Comment 4




            19
20
21
                           OIG Evaluation of Auditee Comments

Comment 1 We agree that a lottery is an acceptable method for establishing a list of applicants
          and revised the finding accordingly. However, we disagree that the waiting list
          was implemented in the chronological order it was established. Specifically, the
          response stated that 318 applications were received for the 115 affordable units,
          then randomly selected to establish the chronological waiting list. Therefore, these
          318 individuals should have been given the opportunity to obtain housing in that
          order, or be denied/disqualified, or decline. We found this was not the case. We
          determined that several individuals had been bypassed and no supporting
          documentation was provided to show why.

             In addition, the subrecipient’s response stated that applications received after the
             initial application deadline, but before the lottery was held, were placed on the
             "lottery" established waiting list, in chronological order of receipt of application.
             Therefore, those individuals listed as 319 - 573 on the waiting list were not to be
             offered housing until the first 318 individuals were exhausted. We found this was
             not the case. The subrecipient’s occupancy summary reports (attachment 13)
             showed that individuals listed as 350, 359, 497, 498, 535, and 544 had leased up in
             2007, but no support was provided to describe why several individuals on the
             waiting list of the first 318 applicants were bypassed.

Comment 2 We agree that one of the 18 tenant files reviewed was not a HOME assisted unit
          and removed it from the report. However, we disagree that the subrecipient
          conducted reviews of all applicants at the time of initial certification, or that it
          conducted the required annual monitoring for program compliance. As stated in
          the finding, we found that 10 of 17 tenant files reviewed showed miscalculated
          income for one or more years. The report did not state that the tenants were
          ineligible, rather the data was used to support the lack of monitoring conducted by
          the subrecipient. The subrecipient stated that at the time of initial income
          certification, HOME program eligibility was determined by the subrecipient for all
          17 applicants. However, that is false. Attachment 7 of the subrecipient’s response
          showed that 3 of 17 applicants were not reviewed. The spreadsheet shows the
          applicant's name, unit number, date received, status, and date approved, does not
          show what was reviewed or who reviewed it.

             Further, the subrecipient states that it conducted on-site monitoring in November
             2008, however, none of the documentation adequately showed the extent of the
             monitoring that was conducted, the results, or any subsequent actions taken.

Comment 3 Since the subrecipient agreed with our conclusion in this section, we have no
          further comment.

Comment 4 We disagree with the subrecipient’s statements. On June 2, 2009, we asked the
          subrecipient’s Director of Audits and Compliance for its monitoring policies and
          procedures and supporting documentation to show what had been monitored and



                                               22
the results of that monitoring. The Director told us that the Housing Monitoring
Managers would provide the information. However, the Housing Monitoring
Manager was only able to provide a blank occupancy summary report, a blank
certificate of continuing program compliance, and a household characteristics
report, and stated that he didn't have access to the other documents as they were in
the working file already provided to us. The working file did not contain this
information.

The subrecipient’s response also indicated that we interviewed the Housing
Management Officer responsible for monitoring the Gallery, but did not ask for or
mention the lack of any monitoring documentation. We agree we had not asked
this individual for monitoring documentation. We interviewed her early in the
audit to determine whether she had additional information about the management
agent and/or complaints from tenants located at a different property also
administered by the subrecipient. At that point in time, we had not concluded that
there was a lack of monitoring documentation. Two months later, we asked the
Director of Audits and Compliance for the monitoring documentation since he was
our point of contact for information requests. If the Director of Audits and
Compliance knew that the Housing Management Officer had the documents we
requested, he should have obtained them for us.

Further, the occupancy summary and certificate of continuing occupancy reports
submitted were not adequate evidence of monitoring for program compliance
because they were incomplete. No signatures were found on any of the occupancy
summary reports submitted and we noted that the signature area was deleted from
all of the forms; therefore, we were unable to determine who generated these
forms. In addition, the certificate of continuing program compliance in attachment
13 was not signed by anyone; therefore, we were unable to determine who
generated this form.




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