Issue Date December 21, 2010 Audit Report Number 2011-LA-1005 TO: Maria Cremer, Acting Director, Office of Community Planning and Development, San Francisco, Region IX, 9AD FROM: Tanya E. Schulze, Regional Inspector General for Audit, Region IX, 9DGA SUBJECT: The City and County of San Francisco, CA, Did Not Always Ensure That Homelessness Prevention and Rapid Re-Housing Funds Were Used as Required HIGHLIGHTS What We Audited and Why We audited the City and County of San Francisco (City) because its grant of more than $8.7 million was one of the largest Homelessness Prevention and Rapid Re-Housing Program (HPRP) grants in the State of California. Our objective was to determine whether the City disbursed HPRP funding in accordance with program requirements. What We Found The City paid for HPRP services for ineligible participants and participants whose eligibility was not supported. It also paid for ineligible activities. We reviewed 31 case files and found that 4 participants were ineligible and 10 did not have adequate documentation to support eligibility. We also identified 17 additional participants that the City had reviewed during monitoring whose eligibility was not adequately supported. Thus, we questioned the City‟s use of more than $63,000 in HPRP funds. What We Recommend We recommend that the Acting Director of the San Francisco Office of Community Planning and Development require the City to (1) reimburse the program $8,820 from non-Federal funds for the ineligible participants and activities and determine and reimburse any amounts that have been spent since our review for these participants; (2) provide supporting documentation for participants‟ eligibility or reimburse its program accounts $31,172 for participants reviewed who lacked adequate documentation and determine and reimburse any amounts that have been spent since our review for these participants; (3) provide supporting documentation for participants‟ eligibility or reimburse its program accounts $23,016 based on the City‟s monitoring review and determine and reimburse any amounts that have been spent since our review for these participants; (4) develop and implement procedures to ensure that its subgrantees verify and document participant eligibility in accordance with HPRP requirements; and (5) develop and implement effective monitoring procedures to ensure, at a minimum, that reviews are timely, deficiencies and corrections are clearly documented, and any reimbursements for ineligible participants or participants whose eligibility cannot be determined are repaid to the program. 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 Authority a draft report on November 24, 2010, and held an exit conference with the Department‟s officials on December 3, 2010. The Authority provided written comments on December 8, 2010. It generally disagreed with our report. 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 : The City Paid for Ineligible and Unsupported HPRP Services 5 Scope and Methodology 9 Internal Controls 11 Appendixes A. Schedule of Questioned Costs 12 B. Auditee Comments and OIG‟s Evaluation 13 C. Schedule of Noncompliant Cases Per Subgrantee 27 D. Summary of Expenditures for Files Reviewed 28 E. Criteria 29 3 BACKGROUND AND OBJECTIVE The Homelessness Prevention and Rapid Re-Housing Program. The Homelessness Prevention and Rapid Re-Housing Program (HPRP) is a new program under the U.S. Department of Housing and Urban Development‟s (HUD) Office of Community Planning and Development. It was funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act) on February 17, 2009. Congress has designated $1.5 billion for communities to provide financial assistance and services to either prevent individuals and families from becoming homeless or help those who are experiencing homelessness to be quickly re-housed and stabilized. HPRP funding was distributed based on the formula used for the Emergency Shelter Grant program. The City and County of San Francisco, CA. HUD allocated program funds for communities to provide financial assistance and services to either prevent individuals and families from becoming homeless or help those who are experiencing homelessness to be quickly re-housed and stabilized. HUD used its Emergency Shelter Grant formula to allocate program funds to metropolitan cities, urban counties, and States. On July 31, 2009, HUD entered into a grant agreement with the City and County of San Francisco (City) for more than $8.7 million in program funds. The agreement was pursuant to the provisions under the Homelessness Prevention Fund, Division A, Title XII, of the Recovery Act. The City is responsible for ensuring that each entity that administers all or a portion of its program funds or receives all or a portion of its program funds to carry out activities fully complies with the program requirements. On October 1, 2009, the City entered into subgrant agreements with six nonprofit entities to carry out the program. The six nonprofit subgrantees were Catholic Charities CYO, Holy Family Day Home, Tenderloin Housing Clinic, Hamilton Family Center, Larkin Street Youth Center, and Eviction Defense Collaborative. Mayor’s Office of Housing and Human Services Agency. Two departments within the City, the Mayor‟s Office of Housing and the Human Services Agency entered into a memorandum of understanding to oversee and administer the program funds awarded to the City. According to this memorandum of understanding, the Mayor‟s Office of Housing is the primary point of contact between the City and HUD for submitting required reports and drawing down program funds. The Human Services Agency is responsible for the day-to-day program administration, which includes coordination and monitoring of subgrantees, ensuring the eligibility of program participants and program expenditures, and quarterly reporting of participant data to HUD. Our objective was to determine whether the City disbursed HPRP funds in accordance with program requirements. 4 RESULTS OF AUDIT Finding: The City Paid for Ineligible and Unsupported HPRP Services The City paid for HPRP services for ineligible participants, ineligible activities, and participants whose eligibility was not supported. This condition occurred because the City did not review eligibility documentation when approving payments to the subgrantees or establish effective monitoring procedures to ensure that the documentation was in the subgrantees‟ files. Consequently, it spent more than $63,000 on services for ineligible participants and participants for whom eligibility was not supported. HPRP Funds Were Used for Ineligible Participants and Ineligible Activities We reviewed 31 case files out of 130 for the period selected and found that the City paid $8,320 for HPRP services for 4 ineligible participants. The ineligible participants are discussed below. Two participants were documented by the subgrantees as undocumented immigrants. In one case, the participant had provided and the subgrantee included in the case file a notice to appear in removal proceedings because he was “an alien present in the United States who was not admitted or paroled.”1 In the other case, the subgrantee wrote in the participant‟s case notes that the two adults in the household “are monolingual Spanish speaking undocumented immigrants.” In accordance with Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, no entity that receives funds under HPRP may knowingly provide HPRP assistance to an alien who is not a qualified alien. One participant was not eligible for assistance because he was not at imminent risk of becoming homeless. When he applied and was approved for assistance, he was not behind in his rent and was not threatened with eviction, but the subgrantee approved the payment of rental subsidies for 4 months. One participant did not meet the City‟s income requirement because his income exceeded 30 percent of area median income ($23,750). The subgrantee did not correctly annualize the participant‟s gross annual income. It miscalculated the participant‟s gross annual income by taking income of $950 for a 2-week period, multiplying it by 2 to arrive at a monthly income of $1,900, and then multiplying by 12 for an annual total of $22,800. 1 The subgrantee made the assistance payment for this ineligible participant (client C3 in appendix D). However, it had not submitted an invoice to the City requesting reimbursement for this payment as of October 6, 2010. Therefore, the $8,320 in ineligible costs does not include the assistance payment made for this participant. 5 The correct calculation is $950 multiplied by 26 2-week pay periods annually, which equals $24,700. The income was understated by $1,900; therefore, the City made ineligible payments for this participant. The subgrantee also failed to show that this participant was at imminent risk of becoming homeless. In three other cases, annual income was incorrectly calculated, but the participants met requirements when income was calculated correctly. We also found two payments totaling $1,033 for ineligible activities, although they assisted eligible participants. In one case, the subgrantee did not obtain adequate confirmation from the landlord of the back rent owed and, consequently, overpaid by $500. In the other case, the subgrantee provided $533 in assistance for a partial month‟s rent, although the participant‟s file showed that the City also provided rental assistance for the same period through another program.2 HPRP requirements do not allow rental assistance payments to be made for the same period and for the same cost types when assistance is provided through another housing subsidy program (see appendix D for a listing of funds spent per case). The Subgrantees Did Not Always Adequately Support Participants’ Eligibility The City paid for HPRP services totaling $31,172 for 10 participants whose eligibility was not supported. Each of the four subgrantees visited provided assistance without adequate documentation of participant eligibility. For example, 7 of the 31 files reviewed did not include documentation or verification that the participant was imminently at risk of becoming homeless. Case files did not contain adequate documentation of income verification and/or financial documentation. Subgrantees did not always ask all adult household members whether they had income. When subgrantees calculated annual income based on only one part- time pay stub, the files did not show an attempt to determine whether it was representative of the usual hours worked. Although pay stubs or Social Security letters showed direct deposit to bank accounts, case workers often failed to ask for bank statements and wrote in the file that the participants had “no bank account.” When files did include bank statements, it did not appear that case workers considered the information they contained. In one case, the recent bank statement showed deposits exceeding the income shown on the pay stubs the participant provided. If the deposits to the bank account were an indication of true income, the participant exceeded the City‟s income eligibility requirement (see appendix 2 The subgrantee made the assistance payment on behalf of the participant for this ineligible activity. However, it had not submitted an invoice to the City requesting reimbursement for this payment as of October 6, 2010. Therefore, the assistance payment of $533 was not included as part of the ineligible costs computation. 6 C for a full listing of cases of noncompliance and appendix D for a listing of funds spent per case). All Assistance Payments Made by One Subgrantee Were Unsupported We selected 4 of 6 subgrantees to visit. While we were doing fieldwork, the City issued its monitoring report for one subgrantee that we did not select for our case file reviews and disclosed significant deficiencies in eligibility documentation. The City had reviewed files for all 17 of the subgrantee‟s participants assisted as of July, 2010. The City suspended this subgrantee from accepting new participants and instructed the subgrantee‟s supervisory staff to review all case files and correct all deficiencies in documentation of eligibility, income, and financial assistance. Monitoring findings included, “Insufficient documentation of why the assistance that was provided was needed, or explanation of how the level of assistance was calculated; inconsistent compliance with documentation of the „but for‟ rule to determine eligibility - that the client would be homeless but for receiving HPRP assistance; missing or inconsistent income verification for the primary client; missing or inconsistent documentation of income for each household member; multiple forms in one file with information that was contradictory, including the need for assistance, amount of assistance provided, intake and discharge dates, and family composition and ethnicity; and no evidence of habitability inspections being conducted prior to occupancy when assistance was used to move clients into a new unit.” The City did not document or maintain specific records showing the deficiencies found for individual case files during monitoring reviews. A City official told us that the City reviewed the files for corrective action and found that the subgrantee had improved its file documentation. For closed cases, it was not possible to obtain better documentation, but for the ongoing cases, the City was able to add to the files. The City could not support the eligibility of the assistance to the subgrantee‟s 17 participants; therefore, we questioned the $23,016 in services paid for these participants. The City Needs To Improve Subgrantee Monitoring The subgrantees began assisting participants in October 2009; however, the City performed its first onsite monitoring reviews in July 2010. When the City reviewed participant case files during monitoring, it did not detect significant deficiencies relating to eligibility for five of its six subgrantees, nor could the City provide documentation showing which files were reviewed or the results for each file. Based on the results of our case file reviews, the City needs to improve procedures to ensure that HPRP funds are only used to assist participants for whom eligibility is documented. 7 Conclusion The City did not always ensure that HPRP funds were used as required. We attribute the deficiencies to the City‟s failure to develop procedures to ensure that subgrantees determined and documented participant eligibility in accordance with program requirements and inadequate monitoring. Although the City identified significant deficiencies in the eligibility documentation for one subgrantee during monitoring, it did not find significant eligibility problems when it monitored the other five subgrantees. We found that all subgrantees needed better oversight. Eligibility criteria and documentation requirements were published in Federal Register Notice FR-5307-N-01 and HUD provided guidance on how to meet the requirements on its website. (see appendix E) Recommendations We recommend that the Acting Director of the HUD San Francisco Office of Community Planning and Development 1A. Require that the City reimburse the program $8,820 from non-Federal funds for the ineligible participants and activities and determine and reimburse any amounts that have been spent since our review for these participants. 1B. Require that the City either provide supporting documentation for participants‟ eligibility or reimburse its program accounts $31,172 for participants reviewed who lacked adequate documentation and determine and reimburse any amounts that have been spent since our review for these participants. 1C. Require that the City either provide supporting documentation for participants‟ eligibility or reimburse its program accounts $23,016, based on the City‟s monitoring review, and determine and reimburse any amounts that have been spent since our review for these participants. 1D. Require the City to develop and implement procedures to ensure that its subgrantees verify and document participant eligibility in accordance with HPRP requirements. 1E. Require the City to develop and implement effective monitoring procedures to ensure, at a minimum, that reviews are timely, deficiencies and corrections are clearly documented, and any reimbursements for ineligible participants or participants whose eligibility cannot be determined are repaid to the program. 8 SCOPE AND METHODOLOGY We performed our onsite audit work at the City‟s office and selected subgrantee offices in San Francisco, CA, between July and September 2010. The audit generally covered the period September 1, 2009, through June 30, 2010. We expanded our audit period as necessary. To accomplish our objective, we interviewed HUD staff, grantee staff, and subgrantee staff responsible for program execution. We also reviewed Applicable HUD requirements, including the Recovery Act; the Revised HPRP Notice, Redline with Corrections, issued June 8, 2009; and program guidance issued by HUD; The City‟s substantial amendment to the consolidated plan/2008 action plan for HPRP; The HPRP grant agreement between HUD and the City; The memorandum of understanding between the Mayor‟s Office of Housing and the Human Services Agency; The subgrant agreements between the City and its six nonprofit subgrantees; The City‟s accounting policies and procedures for subgrantee reimbursement requests and program funds drawdowns; The City‟s policies and procedures for subgrantee program monitoring and fiscal monitoring; The City‟s and subgrantees‟ disbursement records; and Subgrantee participant case files. Between January 1 and June 30, 2010, the City disbursed nearly $1.5 million in HPRP funds. During our survey, we reviewed $120,714 in program expenditures (8 percent of total HPRP funds disbursed), which included financial assistance provided to participants by three subgrantees, data collection expenses, and administrative expense. For each of these 3 subgrantees, we selected 4 participant files for review for a total of 12 participant files. Although inconsistencies and errors were found in these participant case files, the City and subgrantees contended that issues were found only because these files were from the early days of the program before HUD provided guidance. The City and subgrantees insisted that procedures and documentation had improved in more recent participant case files. By August 31, 2010, the City had disbursed more than $1.8 million in HPRP funds. In the audit phase, we revisited the three subgrantees and added a fourth subgrantee. The fourth subgrantee was added because it was the only subgrantee that provided rapid re-housing assistance. We reviewed an additional $42,952 in financial assistance provided to 19 more participants whose program entry dates were from 2 recent months between May and July 2010. For each of the four subgrantees, we selected the greatest of 20 percent of new participant entries for the 2- month period or four participants to review. With the additional 19 participant files selected, we reviewed a total of 31 case files. 9 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 objectives. 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 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 control was relevant to our audit objective: Controls to ensure that subgrantees follow applicable laws and regulations with respect to the eligibility of HPRP participants and activities. We assessed the relevant control 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 its subgrantees followed Federal requirements for the eligibility of HPRP participants (see finding 1). 11 APPENDIXES Appendix A SCHEDULE OF QUESTIONED COSTS Recommendation Ineligible 1/ Unsupported 2/ number 1A $8,820 1B $31,172 1C $23,016 1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity that the auditor believes are not allowable by law; contract; or Federal, State, or local policies or regulations. These costs consist of HPRP funds used to assist ineligible participants and activities. 2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program or activity when we cannot determine eligibility at the time of 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. These costs consist of HPRP funds used to assist participants whose eligibility was not supported by appropriate documentation. 12 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments 13 Comment 1 14 Comment 1 & 2 Comment 3 Comment 4 15 Comment 5 Comment 6 Comment 7 16 Comment 8 Comment 9 17 Comment 10 Comment 11 Comment 12 18 Comment 13 Comment 14 Comment 15 19 Comment 15 20 Comment 15 Comment 16 21 Comment 16 Comment 17 Exhibits made available upon request 22 OIG Evaluation of Auditee Comments Comment 1 The 2009 and 2010 guidance for assessing the risk of homelessness (as quoted by the City in its response to this audit) are essentially the same.3 In both of the quotes cited by the City, the key is determining if the applicant has other housing options or has financial resources or support networks to obtain immediate housing or remain in current housing. Both the March 2010 citation the City quoted above, and the revised HPRP notice from June, 2009, state that the assistance is specifically for " individuals and families who are homeless or would be homeless but for this assistance." Regarding the requirement to assess and document an applicant's risk of homelessness, the 2009 HPRP Notice also stated: "Grantees are responsible for verifying and documenting the individuals’ risk of homelessness that qualifies them for receiving rental assistance." Comment 2 During the audit, OIG reviewed 31 case files (see appendix D). In addition, recommendation 1C refers to 17 files that the City reviewed during its monitoring of Larkin Street Youth Services. Comment 3 We evaluated the reasons the City gave for disagreeing with questioned costs and did not find that the additional information provided warranted any changes to the amounts questioned. Additional documentation obtained after audit field work was complete can be provided during the audit clearance process. The City's case by case comments and OIG's evaluation are below. Comment 4 Holy Family Day Home - Client A4: It was the City's decision to set an annual income requirement that was lower than the one established by HUD. Once a limit was established, it should have been applied equally to all applicants. In this case, the file showed a miscalculation of income, not a decision to make an exception. Comment 5 Tenderloin Housing Clinic - Client D3: As noted above, the requirement to verify and document the risk of homelessness existed from program inception. The file did not contain such documentation and the individual was current on his rent. The case file showed that the client initially applied for HPRP assistance in November 2009 when he asked for assistance paying his December rent. The other subgrantee said it could not help and referred him to Tenderloin Housing clinic. When he applied for help from Tenderloin in December, his December rent was paid without HPRP assistance, providing an indication he may have had other resources Comment 6 Catholic Charities CYO - Client B6: OIG found three deficiencies in this case file. First, there was nothing in the file that actually documented the niece's residence in the aunt's former apartment, or her imminent risk of becoming 3 The HPRP Notice was revised and reissued on June 8, 2009, in advance of the City's October, 2009, start of HPRP program assistance. 23 homeless. The niece's name was not on the arson report. Second, both the aunt and the niece had bank accounts, evidenced by the income documentation obtained by the caseworker, who did not obtain or review the bank statements to determine if the participants had financial resources to pay the security deposit. The caseworker wrote "No bank account" in the file. Therefore, eligibility was not supported. Finally, although there was no direct effect on income eligibility, the subgrantee incorrectly calculated annual income. The subgrantee did not rely on the Section 8 calculation worksheet; it relied on only one pay stub which was for a one-week pay period. The subgrantee took the $269.23 earned by the niece in 1 week and multiplied it by 2, incorrectly arriving at $538.46 monthly earned income and $6,461.52 annual income. The correct calculation would have been $269.23 per week multiplied by 52 weeks = $13,999.96. Added to the aunt's $929 monthly SSI the correct annual income was $25,147.96. Comment 7 Catholic Charities CYO - Client B7: Documentation of bank accounts can be provided to HUD during the process of clearing the findings. We do not agree that the grantee can rely on an assumption that assets should have been verified by another agency that also provided assistance. We also noted that case notes said this client was spending $50 per month on internet and sending $50 to assist a relative in another country. Comment 8 Catholic Charities CYO - Client B8: The City's argument that the Section 8 rent computation sheet from the household's last annual recertification shows the son has no income is not acceptable. We do not agree that the grantee can rely on an assumption that income should have been verified by another agency that also provided assistance. Further, the Section 8 recertification in the HPRP case file was dated 14 months before participants' HPRP intake month. There is no indication in the client file to show the caseworker asked if the 21-year-old had any income at intake. Comment 9 Catholic Charities CYO - Client B10: We questioned the $590 back rent payment in December, 2009, because the file, including case notes, did not show any indication the amount of back rent owed was verified. The only documentation in the file was two letters from a prospective landlord the first stating that back rent owed to a prior landlord was $248, the second stating the amount was $590. Through our own research, we found the judgment was for $248. We also found that the applicant did not move into the apartment that she had applied for, although she was approved for move-in. She was still “couch surfing” when she returned for additional assistance in May 2010. In addition, the file did not show that employment income was verified in December 2009. Shredding prior documentation when new documentation is obtained months later would not be an acceptable practice and it is not a practice we saw in any other files we reviewed or in the subgrantees procedures. Documentation can be provided to HUD during the clearance process. 24 We did not question the provision of a security deposit in May 2010. Comment 10 Holy Family Day Home - Client A1: We reviewed the copy of the stipulated agreement and, as a result decreased the count of cases where risk of homelessness was not documented. However, this case is still unsupported because annual income was inadequately verified. The participant had two part- time jobs and provided pay stub covering a six-week period. Pay stubs were provided from 1 job for the first 2 weeks, 2 jobs for the second 2 weeks and 1 job for the third 2 weeks. There was no explanation in the file regarding the periods with documentation from only one job. Further, the recent bank statement in the file showed deposits for the month that significantly exceeded the documented income. If the bank deposits were a true indication of income, this participant would not be eligible for HPRP assistance. Comment 11 Holy Family Day Home - Client A2: Participants were ongoing Section 8 tenants. The file did not indicate why they had to move or that they were at risk of homelessness. There were no case notes in the file. Under the 2009 HPRP Notice, grantees (or subgrantees) were responsible for verifying and documenting the individuals' risk of homelessness. Comment 12 Holy Family Day Home - Client A3: We agree that this participant was low income; however, we did not see verification or documentation of risk of homelessness in the file. We did not see the landlord letter referred to in the City's response to the audit. The file also showed that the participant was approved in April 2009 for rental subsidy from the City through another program but had never received it. The case worker explained that the participant had not received the subsidy because he failed to come in for required case management/counseling sessions. As a result, at the end of October 2009, he was four months behind on his rent. Comment 13 Holy Family Day Home - Client A5: Without looking at the bank statements, the grantee can only guess that the applicant does not have undisclosed income or assets. Verification and documentation is required. Comment 14 Tenderloin Housing Clinic - Client D4: The letter from the employer was hand- carried by the participant and there is no way of knowing who filled it out and signed it. Nothing in the case notes or the file indicated that the caseworker contacted the employer directly. Therefore, income was inadequately verified. Regarding the letter in Spanish, the auditor translated it and agrees that the landlord wrote that she would evict if she did not receive the back rent. Comment 15 Regarding Larkin Street Youth Services, City officials told us that they had reviewed 17 files during monitoring in July 2010, although only 13 of the cases had been submitted to the City for reimbursement. Regarding the eight cases the City said it has determined met eligibility and documentation requirements, support may be provided to HUD during the process of clearing the findings. 25 Comment 16 We do not dispute any of the City's comments about it's HPRP monitoring procedures; however, the results of the audit show that subgrantees did not ensure that participants and assistance payments were eligible and supported. Comment 17 HUD provided guidance and tools for monitoring, but not comprehensive procedures, which are the grantee's responsibility. The City's monitoring did not result in any findings of unsupported or ineligible payments for the four subgrantees we visited and reviewed, and the City had no record of specific unsupported payments made by Larkin Street, although it deemed deficiencies to be significant and suspended intake of new clients. Therefore, we concluded that detailed procedures are needed to ensure that results of each individual case file review, including deficiencies, are documented and appropriate action is taken for ineligible or unsupported payments. 26 Appendix C SCHEDULE OF NONCOMPLIANT CASES PER SUBGRANTEE Number of case Total files per subgrantee Deficiencies A B C D 1 Assistance provided to undocumented 1 1 2 immigrants 2 Did not show imminent risk of becoming 3 3 6 homeless 3 Participant was not at imminent risk of 1 1 becoming homeless 4 Participant exceeded the City‟s income limit 1 1 5 Errors in calculating annual income 2 2 4 6 Lack of income verification for primary 1 1 1 1 4 participant 7 Lack of income verification for other adult(s) 1 2 3 in household 8 No verification of bank accounts for 1 4 5 participants who had bank accounts 9 Amount of back rent not verified by landlord 1 1 10 No housing inspection 1 1 11 Housing inspection was 9 months before 1 1 move-in 12 Did not show risk of utility shutoff 1 1 13 Overpayment to landlord 1 1 14 HPRP rental subsidy given for the same 1 1 period that rental subsidy was provided by the City through another program KEY: A – Holy Family Day Home; B – Catholic Charities CYO; C – Hamilton Family Center; D – Tenderloin Housing Clinic 27 Appendix D SUMMARY OF EXPENDITURES FOR FILES REVIEWED Amounts paid by the City as of 10/6/10 Amount Paid by Subgrantee Client invoiced the City Eligible Ineligible Unsupported Subgrantee A A1 2,440.40 Yes - - 2,440.40 A2 1,641.00 Yes - - 1,641.00 A3 1,807.56 Yes - - 1,807.56 A4 1,520.00 Yes - 1,520.00 - A5 9,300.00 Yes - - 9,300.00 A6 196.00 Yes 196.00 - - A7 2,748.00 Yes 2,748.00 - - A8 221.00 Yes 221.00 - - Total for subgrantee A 19,873.96 19,873.96 3,165.00 1,520.00 15,188.96 Subgrantee B B1 1,813.00 Yes 1,813.00 - - B2 2,107.25 Yes 2,107.25 - - B3 1,526.00 Yes 1,526.00 - - B4 1,332.90 Yes - - 1,332.90 B5 6,521.31 Yes 6,521.31 - - B6 1,823.00 Yes - - 1,823.00 B7 7,011.60 Yes - - 7,011.60 B8 2,226.00 Yes - - 2,226.00 B9 3,600.00 Yes - 3,600.00 - B10 1,790.00 Yes 1,200.00 - 590.00 B11 4,495.31 Yes 3,995.31 500.00 - Total for subgrantee B 34,246.37 34,246.37 17,162.87 4,100.00 12,983.50 Subgrantee C C1 2,700.00 Partial 1,350.00 - - C2 2,133.00 No - - - C3 1,780.00 No - - - C4 2,501.73 No - - - Total for subgrantee C 9,114.73 1,350.00 1,350.00 - - Subgrantee D D1 1,880.00 Yes 1,880.00 - - D2 778.00 Yes 778.00 - - D3 3,200.00 Yes - 3,200.00 - D4 3,000.00 Yes - - 3,000.00 D5 2,956.98 No - - - D6 586.41 Yes 586.41 - - D7 1,083.00 Yes 1,083.00 - - D8 - No - - - Total for subgrantee D 13,484.39 10,527.41 4,327.41 3,200.00 3,000.00 Total dollars reviewed for the four subgrantees 76,719.45 65,997.74 26,005.28 8,820.00 31,172.46 28 Appendix E CRITERIA A. The Recovery Act became Public Law 111-5 on February 17, 2009. The Recovery Act establishes the Homelessness Prevention Fund. The homelessness prevention portion of the Recovery Act falls under Title XII – Transportation and Housing and Urban Development, and Related Agencies. B. HUD Federal Register Notice FR-5307-N-01 advised the public of the allocation formula and allocation amounts, the list of grantees, and requirements for the Homelessness Prevention Fund, hereafter referred to as the “Homelessness Prevention and Rapid Re- Housing Program (HPRP),” under Title XII of the Recovery Act. The notice included the following: Grantees are responsible for verifying and documenting the individuals‟ risk of homelessness that qualifies them for receiving rental assistance. HUD requires grantees and/or subgrantees to evaluate and certify the eligibility of program participants at least once every 3 months for all persons receiving medium-term rental assistance. Grantees and subgrantees should carefully assess a household‟s need and appropriateness for HPRP. If the household needs more intensive supportive services or long-term assistance or if a household is not at risk of homelessness, grantees and subgrantees should work to link them to other appropriate available resources. In order to receive financial assistance or services funded by HPRP, individuals and families must at least meet the following minimum criteria: Have at least an initial consultation with a case manager or other authorized representative who can determine the appropriate type of assistance to meet their needs. HUD encourages communities to have a process in place to refer persons ineligible for HPRP to the appropriate resources or service provider that can assist them. Be at or below 50 percent of area median income. Be either homeless or at risk of losing their housing and meet both of the following circumstances: (1) no appropriate subsequent housing options have been identified and (2) the household lacks the financial resources and support networks needed to obtain immediate housing or remain in its existing housing. 29 Grantees are responsible for ensuring that HPRP amounts are administered in accordance with the requirements of this notice and other applicable laws. Each grantee is responsible for ensuring that its subgrantees carry out the HPRP eligible activities in compliance with all applicable requirements. Each grantee and subgrantee must keep any records and make any reports (including those pertaining to race, ethnicity, gender, and disability status data) that HUD may require within the timeframe required. Grantees are responsible for monitoring all HPRP activities, including activities that are carried out by a subgrantee, to ensure that the program requirements established by this notice and any subsequent guidance are met. Organizations providing rental assistance with HPRP funds will be required to conduct initial and any appropriate follow-up inspections of housing units into which a program participant will be moving. C. HUD‟s Web site (HUDHRE.info) provided guidance for HPRP grantees. Regarding assistance to undocumented immigrants, HUD wrote: “Can HPRP funds be used to assist illegal immigrants?” HUD then provided the following answer: “In accordance with Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, an alien (a person who is not a U.S. citizen or national) may be eligible for assistance under HPRP only if he or she is a „qualified alien‟ (defined in 8 U.S.C. [United States Code] 1641). This means that no entity that receives funds under HPRP may knowingly provide HPRP assistance to an alien who is not a qualified alien. “The law requires all state and local governments that directly administer HPRP assistance to first verify that an alien is a qualified alien before using HPRP funds to assist him or her. Nonprofit organizations that administer HPRP assistance are not required, but may, verify that an alien is a qualified alien in order to provide him or her with HPRP assistance.” 30
The City and County of San Francisco, CA, Did Not Always Ensure That Homelessness Prevention and Rapid Re-Housing Funds Were Used as Required
Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-12-21.
Below is a raw (and likely hideous) rendition of the original report. (PDF)