oversight

The City of Las Vegas, NV, 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 2011-07-06.

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

                                                                 Issue Date
                                                                          July 6, 2011
                                                                 Audit Report Number
                                                                              2011-LA-1012




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 of Las Vegas, NV, 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 of Las Vegas Homelessness Prevention and Rapid Re-
             Housing Program (HPRP) established by the American Recovery and
             Reinvestment Act of 2009 (Recovery Act). Our review of the City was in
             keeping with requirements, which mandate that the Office of Inspector General
             (OIG) take responsibility for overseeing and auditing programs and activities
             funded by the Recovery Act. The City received a grant of $2.1 million. Our
             overall objective was to determine whether the City administered and expended
             its grant in accordance with program requirements.

 What We Found


             The City paid for HPRP services for ineligible participants and participants whose
             eligibility was unsupported. It also paid for ineligible activities. We reviewed 18
             case files and found that 8 participants were ineligible and 7 did not have
             adequate documentation to support eligibility. Additionally, the City also paid for
             ineligible activities for three participants. As a result, we questioned $75,273 of
           the $85,691 in direct assistance to participants reviewed. In addition, the City did
           not have adequate procedures to ensure that HPRP expenditures and activities
           were accurately tracked and recorded.

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 $45,825 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 $29,448 for participants
           reviewed who lacked adequate documentation and determine and reimburse any
           unsupported amounts that have been spent since our review for these participants;
           (3) design and implement adequate procedures for determining, reviewing, and
           approving eligibility for participants and activities that will provide reasonable
           assurance that assistance payments are made only for eligible participants and
           activities; (4) develop and implement new controls and procedures to ensure that
           financial records are accurate and prevent the deficiencies identified during the
           audit; and (5) perform a complete review of assistance payments to date and
           correct any errors. We also recommend that HUD review additional case files
           and identify additional questioned costs.

           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 the draft report on June 17, 2011, and held an exit
           conference with City officials on June 22, 2011. The City provided written
           comments on June 27, 2011. It generally agreed 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 1: The City Paid for Ineligible and Unsupported HPRP Services          5

   Finding 2: The City Did Not Have an Accurate Accounting of Direct Assistance   9
              Provided

Scope and Methodology                                                             12

Internal Controls                                                                 13

Appendixes

       A.   Schedule of Questioned Costs                                          15
       B.   Auditee Comments and OIG’s Evaluation                                 16
       C.   Schedule of Eligibility Deficiencies Per Participant                  20
       D.   Summary of Expenditures for Files Reviewed                            21
       E.   Criteria                                                              22




                                                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 through the 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 rehoused and stabilized. HPRP funding was
distributed based on the formula used for the Emergency Shelter Grant program.

The City of Las Vegas, NV

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 rehoused 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 for more than $2.1
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 program is
being administered by the City’s Neighborhood Services Department, and there are no
subgrantees.

Our overall objective was to determine whether the City administered and expended the grant in
accordance with program requirements. The focus of our review was to determine whether the
City followed eligibility and documentation requirements when it approved participants for
HPRP assistance.




                                               4
                                 RESULTS OF AUDIT

Finding 1: The City Paid for Ineligible and Unsupported HPRP Services
The City paid for HPRP services for ineligible participants, ineligible and activities that did not
meet the HPRP eligibility requirements, and participants whose eligibility was not supported.
The City could not support the eligibility of other participants. In addition, some participants did
not meet the City’s own determination to assist only families with minor children or senior
citizens. This occurred because procedures for approving participant eligibility and direct
assistance payments were inadequate and there was lack of supervisory review of case work,
especially eligibility documentation at intake and recertification. Consequently, the City
approved ineligible and unsupported costs totaling $75,273 and, thus, did not fully maximize the
effectiveness of the program.



 HPRP Funds Were Used for
 Ineligible Participants and
 Activities

               We reviewed 18 participant files for the period selected and found that the City
               paid $45,825 for ineligible activities, including assistance to 8 ineligible
               participants (44 percent) and ineligible activities for other participants. The
               deficiencies included (see also appendixes C and D)

                       Unreported unemployment benefits,
                       No expectation that stability could be achieved,
                       Unreported residents,
                       Resident that was not a family with minor children or a senior, and
                       Resident that was not homeless or at imminent risk of becoming homeless.

               Unreported Unemployment Benefits

               Contrary to the requirements of Federal Register Notice FR-5307-N-01 Section
               IV, D(2) (the Notice) and HPRP Eligibility Determination and Documentation
               Guidance, Section 2, that grantees verify and document participants’ household
               income to ensure it does not exceed 50 percent of area median income, one family
               received a full 12 months of assistance (the maximum the City allowed for HPRP
               assistance), although the head of household had $10,224 in unreported
               unemployment benefits during that time. The caseworker did not follow up on a
               letter from the welfare department (obtained to document the end of Temporary
               Assistance to Needy Families) stating that the participant had an increase in
               unearned income. If the caseworker had contacted the welfare department, she
               would have learned that the participant was receiving unemployment benefits and



                                                 5
was likely to have been working during a break in benefits. This participant paid
the minimum tenant portion of rent, $10 per month, while the City provided
$8,679 in rent and utility assistance.

No Expectation That Stability Could Be Achieved

One participant family included a husband, wife, and two minor children.
Although both adults claimed to be permanently disabled and unable to work,
only the husband was receiving Social Security benefits. There was no
documentation showing that either adult was attempting to obtain employment.
After 9 months of rental assistance totaling $7,215, the caseworker terminated
assistance when the wife said she was not sure the caseworker understood that
neither she nor her husband was capable of working. There was never a
reasonable plan for these participants to achieve stability as HUD intended
according to the Notice Section I. A(1) . In addition, the City moved this family
from an apartment to a hotel because of unspecified and undocumented housing
quality issues. From the hotel, the family moved into an apartment at almost
double the earlier rent.

Unreported Residents

One participant applied for HPRP assistance, stating that she could not pay her
rent because her husband had abandoned her. The City provided $5,028 in direct
assistance for utilities and rent. When the caseworker visited the participant’s
apartment, her husband and mother-in-law were living there. Participants must
disclose all household members in order for the HPRP grantee to determine
eligibility based on household income. Although the caseworker terminated
assistance for noncompliance, the City did not take action to recover ineligible
assistance and paid for the participant’s utilities after the termination.

Resident That Was Not a Family With Minor Children or a Senior

Another participant stated that she only needed assistance for 1 month because
she was employed but missed one rent payment because her boyfriend was in jail.
The participant failed to meet the City’s written HPRP eligibility requirement of
being either a family with minor children or a senior. The City paid for this
participant to move to a hotel while she looked for another apartment, paid for
rent at the hotel and the new apartment for the same period, and then terminated
the participant for noncompliance after the caseworker discovered that there was
an undisclosed adult male living in her household. The City did not attempt to
obtain a refund from the apartment complex that the participant never moved into.
Ineligible expenditures for this participant totaled $1,452.




                                 6
            Resident That Was Not Homeless or at Imminent Risk of Becoming
            Homeless

            The City did not always follow the Notice Section IV. D(2) requirement that
            grantees verify and document participants’ homelessness or imminent risk of
            becoming homeless as required by before providing HPRP assistance.
            Documentation for one participant’s imminent risk of becoming homeless was not
            credible due to a 5-day notice to “pay rent or quit” that was dated and served on
            April 1, 2010, the day rent was due. In addition, the City did not verify how
            much money the participant had in her bank account or if she had sufficient funds
            to pay rent. The participant stated that she needed help for one month because her
            roommate (who had never paid rent) moved out and she used her rent money to
            repay a personal loan. The City paid $750 for back rent and late fees.

            Ineligible Activities

            The City also approved program funds for ineligible activities listed in the Notice
            Sections IV.A(1)(c) and IV.B(3)including utility allowances, landlords’ legal fees,
            late fees (caused by the City’s late payment of rental assistance), duplicate
            payments, and rent for apartments that were never occupied.

            There were five instances in which caseworkers approved participant utility
            allowances. As part of the City’s HPRP, the City required participants to pay the
            greater of 30 percent of their monthly adjusted income or $10 per month for rent;
            therefore, the allowance reduced the tenant portion of rent and added to the HPRP
            rental assistance payment. However, HPRP regulations only allow assistance
            payments to third parties for actual incurred expenses. Actual utility costs paid to
            utility companies would be eligible, but utility allowances were not (see appendix
            D).

The City Did Not Always
Adequately Support
Participants’ Eligibility

            The City paid for HPRP services totaling $29,448 for seven participants whose
            incomes and eligibility were not supported in accordance with the Notice Sections
            IV. A and D, (see appendix D). Deficiencies included

                   Income was only verified for the head of household, and other adults were
                   not required to sign income certifications;
                   The caseworkers did not address whether the participants were receiving
                   child support or, if not, were entitled to it;
                   Income was verified during intake but not when participants were
                   recertified for extended assistance;




                                             7
                    Income verification was based on old documentation; therefore, it did not
                    show current income; and
                    Although some participants had bank accounts, caseworkers did not
                    require the participants to provide bank statements to determine whether
                    resources were available for housing.

             In one case, the family consisted of parents, one adult son, and two minor
             children. The adult son was the only family member employed. The son’s
             income was supported by pay stubs at intake but was not re-verified at
             recertification. There was no verification or certification of income for the
             mother. The father was unemployed and the only family member required to
             certify income status. Total assistance amounted to $8,242. In one case, the
             participant had six children. The oldest was 16 years old, and the youngest was
             an infant at the time the participant applied, but the file did not contain evidence
             to show whether the issue of child support was raised, and no support was listed
             as income. The unsupported amount was $2,402.

Conclusion


             The City approved $75,273 in assistance for eight ineligible participants,
             ineligible activities, and seven participants for whom eligibility was not
             adequately supported. We attribute the deficiencies to the City’s failure to
             develop adequate procedures for determining eligibility and approving payments.
             Although the City had developed forms and checklists to use in the eligibility
             determinations, their use was inconsistent, they frequently contained conflicting
             information, and dates and signatures were missing. Since the City started
             providing assistance to participants in February 2010, it had made staffing
             changes in the program supervisor and caseworker positions, which could also be
             a contributing factor. Funds spent for ineligible participants or activities were not
             available to eligible individuals, and the City did not maximize the effectiveness
             of the program.

Recommendations



             We recommend that the Acting Director of the HUD San Francisco Office of
             Community Planning and Development require the City to

             1A.    Reimburse or reprogram $45,825 in ineligible expenditures from non-
                    Federal funds and determine and reimburse any ineligible amounts that
                    have been spent since our audit for these participants (see appendixes C
                    and D).




                                               8
1B.    Support or repay $29,448 in unsupported expenditures from non-Federal
       funds and determine and reimburse any additional amounts that have been
       spent since our audit for these participants (see appendixes C and D).

1C.    Design and implement adequate procedures for determining, reviewing,
       and approving eligibility for participants and activities that will provide
       reasonable assurance that assistance payments are made only for eligible
       participants and activities.

We also recommend that the Acting Director of the HUD San Francisco Office of
Community Planning and Development

1D.    Review the City’s HPRP participant files not covered in our audit scope,
       identify any additional ineligible HPRP expenses, and require the City to
       repay any such costs from non-Federal funds.




                                 9
Finding 2: The City Did Not Have an Accurate Accounting of Direct
           Assistance Provided
The City did not have an accurate accounting of grant funds spent for direct assistance to
participants Payments were not always coded correctly for the appropriate HPRP activity, voided
checks were not reversed, and in one instance, a payment was duplicated. These errors occurred
because the City had not established adequate controls to ensure that payments were supported
and accurate. Because of this lapse in controls, the City drew reimbursements for services and
activities that were ineligible and could not provide accurate reports showing the amounts spent
on specific grant activities.



 HPRP Activities Were Not
 Accurately Coded


              HPRP activities were not always accurately coded. We found instances in which
              HPRP activities were interchanged. For budgetary purposes and reporting to
              HUD, funds spent for each activity should be recorded correctly. Due to this
              lapse in internal control, there was no correct accounting of what was spent for
              each activity, as required by Federal Register Notice FR-5307-N-01, Section VI.
              C


 A Payment Was Duplicated and
 Voided Checks Were Not
 Accounted For

              One homeless participant found two apartment landlords that initially agreed to
              rent to her and then backed out. The City issued a check for $1,409 on December
              16, 2010, for December and January rent at The Reserve. The City’s business
              specialist was responsible for keeping copies of all HPRP payment documentation
              and maintaining spreadsheets and monthly reconciliations of all HPRP payments.
              She also maintained copies of all HPRP payment documentation. The check was
              voided according to the business specialist’s file documentation, but it was not
              reversed in her reconciliation. It was also not reversed in the accounting system.
              The void was not processed until March 16, 2011, after our inquiry.

              In the case of the second apartment, the City issued and Tivoli Apartments cashed
              a January 12, 2011, check for $886 that included $97 for advance prorated first
              month’s rent for this participant, along with full December rent for a different
              participant. On January 19, 2011, a new check was issued for $97 for the same
              prorated rent. When Tivoli later stated that it was not going to rent to the
              participant, the City voided the second check. Although this voided check was


                                              10
             processed through the accounting system, the City was not aware that it was a
             duplicate payment until our notification. This amount also should be reimbursed
             to HPRP and is included in Finding 1.

Conclusion



             The City did not have an accurate accounting of what was spent for HPRP direct
             assistance activities. This occurred because it did not have adequate controls over
             disbursement processing and accounting. As a result the City did not always
             record expenditures using the correct code and could not accurately report to
             HUD the amount and types of assistance provided.



Recommendations


             We recommend that the Acting Director of the HUD San Francisco Office of
             Community Planning and Development require the City to

             2A.    Develop and implement new controls and procedures to ensure that
                    financial records are accurate and prevent the deficiencies identified
                    during the audit.

             2B.    Perform a complete review of assistance payments to date and correct any
                    errors, including repayment to the program if appropriate.




                                              11
                        SCOPE AND METHODOLOGY

We performed our onsite audit work in the City of Las Vegas, NV, in its Neighborhood Services
Department between January and May 2011. The audit generally covered the period February 1,
2010, through January 31, 2011.

To accomplish our objective, we interviewed HUD officials and City 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 for HPRP;
       The HPRP grant agreement between HUD and the City;
       The City’s accounting policies and procedures for reimbursement requests and program
       funds drawdowns;
       The City’s policies and procedures for program and fiscal monitoring;
       The City’s disbursement records; and
       Participant case files.

We selected 18 participant case files to review for eligibility and payments made from the time
of approval through January 31, 2011. We selected the sample from a list of 202 participants
sorted first by caseworker and then by date of entry into the program. We selected five
participants from each of the three caseworkers and three participants from the small caseload
handled by the supervisor. For each employee, we selected from the list the first and last
participants to enter the program and additional participants in evenly spaced intervals.

We also tested disbursements for direct assistance, case management staff time, and
administrative costs for December 2010. We selected December, (which included 2 pay periods;
employees were paid bi-weekly) out of the 11-months the City had administered HPRP. We
also compared the December 2010 HPRP payment records for direct assistance to the records in
the City’s accounting system and identified discrepancies for 12 out of the 95 participants that
were active. We determined we could not rely on its computer generated data. Therefore, we
reviewed all December payments for those participants.

The City’s drawdowns for reimbursement from HUD as of January 31, 2011, showed HPRP
disbursements of $846,713 for financial assistance, $125,612 for housing and stabilization,
$4,299 for data collection and evaluation, and $10,033 for budget administration as of January
2011. These amounts total 47 percent of the $2.1 million grant.

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.



                                               12
                              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
               objective:

                      Controls to ensure that the City follows applicable laws and regulations
                      with respect to the eligibility of HPRP participants and activities and
                      Controls to ensure that HPRP expenditures and activities are accurately
                      tracked and recorded.

               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 Deficiencies


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

                      The City did not have adequate controls in place to ensure that it followed
                      Federal requirements for the eligibility of HPRP participants and activities
                      (see finding 1).


                                                13
The City did not have adequate controls in place to ensure that it could
provide an accurate accounting of HPRP expenditures and activities (see
finding 2).




                        14
                                   APPENDIXES

Appendix A

                SCHEDULE OF QUESTIONED COSTS

                  Recommendation            Ineligible 1/   Unsupported 2/
                         number
                                1A               $45,825
                                1B                                29,448
                              Total              $45,825         $29,448


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 (see appendixes C and D).

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 (see
     appendixes C and D).




                                            15
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




                         16
Comment 1




Comment 2




            17
Comment 3




Comment 4




            18
                         OIG Evaluation of Auditee Comments

Comment 1   The City has demonstrated willingness to improve HPRP procedures but needs to
            ensure that all procedural changes are well documented, including implementation
            dates. The City’s response included changes that we did not observe in writing or
            in practice.

Comment 2   We reviewed the results of the January 2011 internal monitoring of HPRP case
            files and observed that they revealed numerous case file errors; however, we were
            informed that the results were never provided to the program staff for correction
            and the effort was abandoned when our audit was announced. We did not observe
            any random file reviews or corrections made to files based on quality control
            reviews. The City should develop detailed written procedures for quality control
            reviews, particularly if the reviews are to be performed by staff that do not have
            detailed program knowledge. All results of reviews, including corrective action,
            should be documented.

Comment 3   Although we observed the use of standardized forms throughout the case files,
            forms were often missing, incomplete, undated, or unsigned.


Comment 4   In May 2010, the City’s program had been in operation for two months. Although
            case files contained case notes, the case notes did not always address the
            “reasonable prospect” or potential of sustainability once the HPRP assistance
            ended.




                                            19
        Appendix C

                           SCHEDULE OF ELIGIBILITY DEFICIENCIES PER PARTICIPANT

Participant   Unreported        No       Unreported      Not        Not         Utility     Income/lack     Bank          Error        Error        Late
 number        income       reasonable    adults in    family     homeless    allowance    of income not   account    calculating   calculating   recerti-
                              plan to    household      with        or at     subtracted      verified     balance       annual      monthly      fication
                              achieve                 minors or   imminent   from tenant                     not        income       adjusted
                             stability                a senior      risk         rent                      verified                   income
  A1                           X                                                  X             X
  A2                                         X                                                  X
  A3                                                                 X                                       X
  A4                                         X           X           X                          X
  A5                                                                                            X                         X             X
  B1                                                                              X                                       X             X
  B2                                                                                            X                         X             X
  B3                           X                                                                X                         X             X
  B4                                                                 X                          X            X            X                         X
  B5              X            X                                     X            X             X                         X             X
  C1                                                                                            X
  C2                                                                              X                                       X             X
  C3                                         X                                                  X                         X
  C4                                                                              X             X            X            X                         X
  C5                                                                                            X                         X             X           X
  D1
  D2                                                                                            X
  D3
Total             1             3            3           1           4            5             13            3           10            7            3




                                                                             20
Appendix D

    SUMMARY OF EXPENDITURES FOR FILES REVIEWED
     Participant    Total payments           Eligible       Ineligible        Unsupported
         B5                  8,679                  0           8,679                   0
         B3                  7,215                  0           7,215                   0
         A2                  5,028                  0           5,028                   0
         A4                  1,452                  0           1,452                   0
         A1                  2,402                  0                0              2,402
         A3                    750                  0             750                   0
         A5                  7,277                  0                0              7,277
         B1                  2,812             2,476              336                   0
         B2                  6,119                  0                0              6,119
         B4                  7,789                  0           7,789                   0
         C1                  1,072                  0              96                 976
         C2                  5,737             3,604            2,133                   0
         C3                 11,864                  0         11,864                    0
         C4                  8,242                  0                0              8,242
         C5                  4,405             1,182              483               2,740
         D1                  1,929             1,929                 0                  0
         D2                  1,692                  0                0              1,692
         D3                  1,227             1,227                 0                  0
                           $85,691          $10,418          $45,825              $29,448

           Amounts are rounded

NOTE: Several participants were determined ineligible for the program. In addition, there were
ineligible activities for otherwise eligible participants.




                                              21
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:

             Section I, A(1) - HUD expects that HPRP resources will be targeted and
            prioritized to serve households that are most in need of this temporary assistance
            and are most likely to achieve stable housing, whether subsidized or unsubsidized,
            outside of HPRP after the program concludes.

            Section IV, A(1)- Financial assistance is limited to the following activities: short-
            term rental assistance, medium-term rental assistance, security deposits, utility
            deposits, utility payments, moving cost assistance, and motel and hotel vouchers.
            Grantees and subgrantees must not make payments directly to program
            participants, but only to third parties, such as landlords or utility companies.

            Section IV, A(1)(a) - 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.

            Section IV, A(1)(c) - HPRP funds may be used for up to 18 months of utility
            payments, including up to 6 months of utility payments in arrears, for each
            program participant, provided that the program participant or a member of his/her
            household has an account in his/her name with a utility company or proof of
            responsibility for making utility payments, such as cancelled checks or receipts in
            his/her name from a utility company.

            Section IV, B(3) - In no case are funds eligible to be issued directly to program
            participants. If funds are found to be used for ineligible activities as determined
            by HUD, the grantee will be required to reimburse its line of credit.


     Section IV, D - Grantees are responsible for verifying and documenting the individuals’
     risk of homelessness that qualifies them for receiving rental assistance.

     Section IV, D(1) - Grantees and subgrantees should carefully assess a household’s need
     and appropriateness for HPRP. If the household needs more intensive supportive


                                              22
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.

Section IV, D(2) - 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.

       Section V, F - Grantees are responsible for ensuring that HPRP amounts are
       administered in accordance with the requirements of this notice and other
       applicable laws.

       Section V, G - 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.

       Section VI. C - The Recovery Act requires grantees to submit quarterly and
       annual reports that include HPRP funds expended by activity type, the number of
       unduplicated individuals and families served, the number of new jobs created, the
       number of jobs retained, challenges to effective program operation, and other data
       items. It also requires grantees to have systems and internal controls in place that
       allow them to separately track and report on Recovery Act funds.

       Section VII, A(1) - 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 published HPRP Eligibility and Documentation Guidance on March 17,
2010. It can be found on HUD’s Homeless Resource Exchange Web site.
http://www.hudhre.info/HPRP/index.cfm?do=viewHPRPIssuances

       Section 2. Assessment - Grantees and subgrantees are expected to include
       documentation on the results of the eligibility assessment process in the case file.
       Note that an eviction notice and proof of income alone are not enough to
       determine eligibility and appropriateness for HPRP. For households who are at-
       risk of losing their housing, in addition to documenting that the household meets
       income eligibility criteria and are at-risk of losing their current housing, grantees
       and subgrantees must assess and document the household would become literally



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homeless “but for” HPRP assistance. This includes assessing and documenting a
household’s support networks and financial resources and other housing options.
HUD recognizes this determination requires a level of professional judgment and
discretion and encourages grantees and subgrantees to carefully think about how
they assess and document these criteria. See the box on this page for a detailed
discussion on the “but for” determination. To ensure program compliance, the
case file should include case notes and other documentation (as appropriate) that
demonstrate the grantee or subgrantee has assessed the client’s other financial
resources, support networks, and subsequent housing options.




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