oversight

Weaknesses Existed in Essex County, NJ's Administration of Its Homelessness Prevention and Rapid Re-Housing Program

Published by the Department of Housing and Urban Development, Office of Inspector General on 2011-09-20.

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

                                                                Issue Date
                                                                     September 20, 2011
                                                                Audit Report Number
                                                                     2011-NY-1015




TO:        Anne Marie Uebbing, Director, Office of Community Planning and
                                 Development, 2FD



FROM:       Edgar Moore, Regional Inspector General for Audit, 2AGA

SUBJECT: Weaknesses Existed in Essex County, NJ’s Administration of Its Homelessness
         Prevention and Rapid Re-Housing Program


                                   HIGHLIGHTS

 What We Audited and Why

             We audited Essex County, NJ’s Homelessnes Prevention and Rapid Re-Housing
             Program (HPRP) in support of the U.S. Department of Housing and Urban
             Development (HUD), Office of Inspector General’s (OIG) goal to review the
             expenditure of American Recovery and Reinvestment Act funds and contribute to
             improving HUD’s execution and accoutability of fiscal responsibilites. We
             selected Essex County based on a risk assessment that considered that the County
             received approximately $2.5 million in HPRP funds and received a score of 43, as
             compared to the median score of 34, in HUD’s HPRP risk assessment. The audit
             objective was to determine whether Essex County officials obligated and
             expended HPRP funds within prescribed timeframes and implemented adequate
             controls to ensure that grant awards complied with HPRP program requirements.

 What We Found


             While Essex County officials ensured that HPRP funds were obligated and
             expended within prescribed timeframes, they had not established adequate
           controls to ensure that the County’s HPRP was administered in accordance with
           program requirements. We attribute these conditions to Essex County and
           subrecipient officials’ unfamiliarity with program requirements. Consequently,
           its subrecipient expended at least $43,833 contrary to program requirements,
           disbursed $141,260 on behalf of recipients whose eligibility was not adequately
           supported, and awarded grants that did not always comply with administrative
           requirements. As a result, Essex County officials cannot adequately assure HUD
           that HPRP funds were expended in accordance with HPRP requirements.

What We Recommend

           We recommend that the Director of HUD’s New Jersey Office of Community
           Planning and Development instruct Essex County officials to (1) reimburse the
           HPRP line of credit $43,833 for funds expended on ineligible HPRP costs, (2)
           provide documentation to adequately support the $141,260 in unsupported
           disbursements, and (3) strengthen subrecipient monitoring procedures before
           administrating future similar HUD-funded programs.

           For each recommendation in the body of this report 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 a draft audit report to Essex County officials on August 31, 2011,
           and held an exit conference with Essex County officials on September 9, 2011.
           Essex County Officials provided written comments on September 13, 2011. They
           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: Weaknesses Existed in Essex County’s Administration of Its   5
                  Homelessness Prevention and Rapid Re-Housing Program

Scope and Methodology                                                          11

Internal Controls                                                              13

Appendixes
   A. Schedule of Questioned Costs                                             15
   B. Auditee’s Comments and OIG’s Evaluation                                  16
   C. Criteria                                                                 19




                                              3
                      BACKGROUND AND OBJECTIVE

The Homelessness Prevention and Rapid Re-Housing Program (HPRP) is a new housing
assistance program under the U.S. Department of Housing and Urban Development (HUD)
Office of Community Planning and Development. It was funded on February 17, 2009 under the
American Recovery and Reinvestment Act of 2009, which provided $1.5 billion for temporary
financial assistance and housing relocation and stabilization services to individuals and families
that are homeless, or would be homeless but for this assistance. Accordingly, HPRP assistance is
targeted at individuals and families that are (1) currently in housing, but are at risk of becoming
homeless and need temporary rent or utility assistance, or assistance to move to another unit and
(2) experiencing homelessness (residing in emergency or transitional shelters or on the street),
and need temporary assistance to obtain housing.

HPRP funding was distributed by HUD based upon the formula used for its Emergency Shelter
Grant program. HUD awarded more than $2.5 million in HPRP funds to Essex County, NJ,
which designated its Division of Housing and Community Development to administer the
program. On September 30, 2009, the County subsequently executed a subrecipient agreement
with its Division of Community Action, which reportedly had experience with similar programs,
through which it awarded $2,457,860 to be used for HPRP activities. On April 6, 2010,
authorization to administer the program was reassigned from the County’s Division of
Community Action to the Division of Training and Employment. The Division of Housing and
Community Development retained $63,022 for its administrative costs.

The objective of this audit was to determine whether Essex County officials obligated and
expended HPRP funds within prescribed timeframes and implemented adequate controls to
ensure that grant awards complied with HPRP program requirements.




                                                4
                                RESULTS OF AUDIT

Finding: Weaknesses Existed in Essex County’s Administration of Its
         Homelessness Prevention and Rapid Re-Housing Program

While Essex County officials ensured that HPRP funds were obligated and expended within
prescribed timeframes, they had not established adequate controls to ensure that the County’s
HPRP was administered in accordance with program requirements. Specifically, Essex County
officials provided inadequate training and oversight to a subrecipient, and the subrecipient
awarded grants for ineligible and unsupported costs, and that did not comply with administrative
requirements. We attribute these conditions to Essex County and subrecipient officials’
unfamiliarity with program requirements. Consequently, its subrecipient expended at least
$43,833 contrary to program requirements, disbursed $141,260 on behalf of recipients whose
eligibility was not adequately supported, and awarded grants that did not always comply with
administrative requirements. As a result, Essex County officials cannot adequately assure HUD
that HPRP funds were expended in accordance with HPRP requirements.



 HPRP Funds Obligated and
 Expended Within Prescribed
 Timeframes

              Essex County officials were awarded $2.5 million on July 16, 2009. In spite of
              difficulties in the initial implementation of the HPRP, officials obligated and
              expended HPRP funds within prescribed timeframes. The notice of funding
              availability for the HPRP required that grantees obligate funds by September 30,
              2009. Further, the American Recovery and Reinvestment Act required that 60
              percent of the funds be expended within 2 years of the date that the funds became
              available to a grantee and that 100 percent be expended within 3 years of that
              time. Essex County officials obligated the funds in a timely manner by executing
              a subrecipient agreement on September 30, 2009 with the County’s Division of
              Community Action.

              Essex County officials believed the Division of Community Action had the ability
              to administer the HPRP; however, they later released the Division from
              administrating the program because they thought it was progressing too slowly in
              its implementation of the HPRP. Consequently, on April 6, 2010, the County
              reassigned administration of the HPRP to the County’s Division of Training and
              Employment.

              Based on reports obtained from HUD’s Integrated Disbursement and Information
              System, $2.3 million, or 91.7 percent of the Essex County’s more than $2.5
              million in HPRP funds were expended as of March 31, 2011, thereby exceeding
              the 60 percent requirement that $1.5 million be expended before July 16, 2011. In


                                               5
            addition, Essex County officials had expended $18,000 of the more than $63,000
            they had set aside for administrative costs.

Inadequate Training and
Oversight Provided to the
County’s Subrecipient

            There were weaknesses in the training and oversight provided to Essex County’s
            subrecipient. Specifically, Essex County officials did not provide the Division of
            Training and Employment staff adequate technical assistance, conduct quarterly
            monitoring reviews as planned, or follow up to ensure that deficiencies noted
            during monitoring had been corrected. While Section 2 of the County’s HPRP
            Manual provided that the County would give support and technical assistance to
            the subrecipient, County officials provided little training or technical assistance to
            the Division of Training and Employment officials. Officials of the Division of
            Training and Employment stated that they did not have experience with programs
            comparable to HPRP, and that training provided was less than an hour during a
            meeting arranged by Essex County officials with an HPRP specialist from HUD
            to answer their questions. This deficiency occurred because Essex County
            officials did not have sufficient staff to provide training and technical assistance
            to its subrecipient.

            Regulations at 24 CFR (Code of Federal Regulations) 85.40(a), Monitoring and
            Reporting Program Performance, require HPRP grantees to monitor grant and
            sub-grant supported activities to assure compliance with applicable Federal
            requirements. Further, section C of Essex County’s substantial amendment for its
            program year 2008 Action Plan (Amendment) provided that County officials
            would conduct quarterly onsite monitoring visits of all subgrantees to ensure that
            services identified in the contract were provided. However, County officials did
            not conduct visits as planned; they conducted three monitoring visits between
            October 2009 and January 2011, one to the Division of Community Action in
            November 2009, and two to the Division of Training and Employment in June
            2010 and January 2011.

            Review of the subrecipient monitoring reports disclosed that the reports were not
            always adequate and follow-up was not conducted to ensure that the corrective
            action needed had been taken. For instance, review of three cases included in the
            County’s reports disclosed potential participant ineligibility issues that were not
            addressed by the subrecipient or followed-up on by County officials. For
            example, in one case, there was no explanation in the file as to why the income, if
            any, of the participant to whom an eviction notice was given was not considered
            in determining eligibility. Also, in two other cases, County officials did not
            inquire about the participants’ financial resources other than salary.




                                              6
                  Further, while County officials provided the subrecipient with a report of
                  deficiencies found, along with recommendations for corrective action, County
                  officials did not ensure that the subrecipient implemented the recommended
                  corrective action. For instance, the monitoring review report dated January 11,
                  2011 noted that an HPRP case file did not contain a bill to support $590 in
                  moving expenses that were paid from HPRP funds and recommended that the
                  subrecipient’s staff obtain a copy of the bill. However, at the time of our review,
                  subrecipient staff had not requested the bill and County officials had not
                  followed-up to ensure that a copy of the bill was obtained or request that the
                  unsupported moving expense be reimbursed. Nevertheless, County officials did
                  provide a copy of the bill at the exit conference.

    Grants Awarded for Ineligible
    Purposes


                  Essex County’s subrecipient disbursed $43,833 for ineligible HPRP costs. This
                  deficiency occurred because County officials did not properly monitor the
                  County’s subrecipient nor ensure that subrecipient staff was adequately trained.
                  As noted below, the ineligible funds were disbursed for either participants who
                  were ineligible for the benefit received or for ineligible expenses.

                             Ineligible Use of HPRP Funds                         Number of                Cost
                                                                                  Participants
                  Assistance to ineligible HPRP participants                           11                $34,783
                  Payment to landlords and management
                  companies for their legal and court fees                              21                $6,068
                  Payment of recurring rental assistance for more
                  than 3 months without recertifying the                                 3                $1,657
                  participants
                  Payment of recurring rental assistance to HPRP
                  participants who were receiving housing                                3                $1,325
                  assistance from other housing programs for the
                  same period and the same type of cost
                                Total Ineligible Cost                                   371              $43,833

                  HPRP participants were determined to be ineligible because the file did not
                  comply with program requirements published in HUD Federal Register Notice
                  FR-5307-N-01 and/or the HUD HPRP Eligibility Determination and
                  Documentation Guidance (see Appendix C) for one of the following reasons: (1)
                  annual income exceeded 50 percent of the area median income for a household
                  with a comparable number of household members, (2) participant applied for and
                  received utility assistance by using a utility bill, dated 1 year prior to the

1
  Total does not add because one participant received benefits for ineligible legal fees incurred by a landlord and
ineligible recurring rental assistance.


                                                           7
                  participant’s application date, or (3) a utility shutoff notice was not included on
                  the utility bill used to qualify the participant for utility assistance.

    Grant Awards Inadequately
    Supported

                  Essex County officials disbursed $141,260 on behalf of 38 participants whose
                  eligibility was inadequately supported. This condition occurred because County
                  officials did not properly monitor the subrecipient or ensure that subrecipient staff
                  was adequately trained. The eligibility of the 382 participants was determined to
                  be unsupported because file documentation did not comply with HUD Federal
                  Register Notice FR-5307-N-01 and/or the HUD HPRP Eligibility Determination
                  and Documentation Guidance (see Appendix C) for the following reasons:

                                17 cases - Lack of documents to support that utility assistance
                                provided was related to a utility balance that was not greater than 6
                                months in arrears.

                                14 cases – No bank statements to support those participants did not
                                have other financial resources, while documents in the files indicated
                                that the participants had bank accounts.

                                9 cases – No lease agreement for the assisted units.

                                9 cases – Lack of documents or notes to support that participants with
                                minor children did not have income from child support.

                                7 cases – Lack of a completed and signed declaration form for
                                household members older than 18 and evidence that they were full
                                time students.

                                4 cases – Lack of lease agreements or participants’ self certification
                                when the participants were evicted from houses or apartments rented
                                by participants’ friends or relatives.

                                4 cases - An eviction notice, a lease agreement, or an HPRP
                                application was provided that included individuals who, along with
                                any potential income, were not included when determining eligibility.

                                 4 cases - Included utility assistance for utility charges that were based
                                on estimated utility consumption rather than actual consumption.


2
  The deficiencies are not independent of one another; each of the 38 participant files exhibited one or more of the
reasons for which they were determined to be unsupported.


                                                          8
                        3 cases – Lack of documents or notes to explain significant
                        drawdowns listed on participants’ bank statements.

                        1 case - No eviction notice to support that the participant was being
                        evicted.

                        1 case - No documents or notes to support that the participant was at
                        risk of becoming homeless.

Grant Awards Did Not always
Comply with Administrative
Requirements


             Review of the sampled HPRP participants’ case files and discussion with
             subrecipient staff disclosed that the subrecipient did not always comply with
             HUD HPRP Eligibility Determination and Documentation Guidance (see
             Appendix C) because they did not always (1) conduct an initial consultation with
             each HPRP participant, (2) evaluate whether each HPRP participant had other
             financial resources and other housing options, (3) conduct a habitability
             inspection for all HPRP-assisted units when required, (4) conduct a lead based
             paint assessment for all HPRP-assisted units when required, (5) conduct rent
             reasonableness analysis when required, (6) have information related to
             participants’ housing status after HPRP housing assistance ended, and (7) obtain
             and maintain documents to support that paid utility assistance was not greater than
             6 months in arrears. Further, 34 of the 62 HPRP participants’ case files included
             subrecipient staff self-certification forms that were not signed by a staffmember
             or a staff supervisor, and 6 lacked a signed subrecipient staff self-certification
             form. These deficiencies occurred because (1) Essex County officials did not
             properly monitor the subrecipient to ensure that the subrecipient administered the
             County’s HPRP in accordance with the HPRP program requirements and (2)
             subrecipient officials were not experienced or trained to administer the County’s
             HPRP program.

Conclusion

             Essex County officials ensured that HPRP funds were obligated and expended
             within prescribed timeframes; however, they had not established adequate
             controls to ensure that their HPRP was administered in accordance with program
             requirements. We attribute these conditions to Essex County and subrecipient
             officials’ unfamiliarity with program requirements. Consequently, the County’s
             subrecipient expended at least $43,833 contrary to program requirements,
             disbursed $141,260 on behalf of recipients whose eligibility was not adequately
             supported, and awarded grants that did not always comply with administrative




                                              9
          requirements. As a result, Essex County officials cannot adequately assure HUD
          that HPRP funds were expended in accordance with HPRP requirements.

Recommendations

          We recommend that the Director of the New Jersey Office of Community Planning
          and Development instruct County Officials to

          1A. Reimburse the $43,833 awarded for ineligible costs to the HPRP line of
              credit.

          1B. Provide adequate documentation for the $141,260 disbursed on behalf of the
              38 participants whose eligibility was unsupported, and if adequate
              documentation is not provided, reimburse the HPRP line of credit from
              nonfederal funds.

          1C. Develop procedures that will ensure that adequate subrecipient monitoring is
              established before administrating similar HUD-funded programs.




                                          10
                        SCOPE AND METHODOLOGY

The audit focused on whether Essex County officials administered the County’s HPRP in
compliance with HPRP program requirements.

To accomplish our objectives, we

       Reviewed relevant HPRP program requirements and applicable Federal regulations.

       Interviewed staff from the HUD New Jersey Office of Community Planning and
       Development, Essex County Division of Housing and Community Development
       (grantee), and the Division of Training and Employment (subrecipient).

       Obtained an understanding of the County’s management controls and procedures through
       analyzing the grantee’s responses to internal control questionnaires, and reviewing the
       County’ audited financial statements for fiscal year 2009.

       Analyzed reports from HUD’s computer systems, including the Integrated Disbursement
       and Information System, and Line of Credit Control System. Assessment of the
       reliability of the data in these systems was limited to the data sampled, which was
       reconciled to the County’s records.

       Reviewed Essex County’ substantial amendment to its program year 2008 Action Plan.

       Reviewed Essex County’s HPRP and its accounting policy.

       Reviewed the HPRP subrecipient agreement between the County and its subrecipient.

       Reviewed County monitoring reports of its subrecipient.

       Reviewed documents such as purchase requisitions, purchase orders, landlords’ bills, and
       cancelled checks to support disbursements associated with 87 HPRP case files sampled.

       Selected a statistical sample of 62 HPRP participant files from the universe of 635 HPRP
       participants based on a 90 percent confidence level, 50 percent estimated error rate, and
       precision of plus or minus 10 percent to determine whether HPRP participants were
       certified in accordance with the HPRP requirements. The results of reviewing the 62
       HPRP participants’ case files revealed that 61.28 percent or 38 HPRP participants, were
       either ineligible to receive HPRP assistance or their eligibility to receive HPRP assistance
       was inadequately supported.




                                               11
       Reviewed an additional 25 participant files to follow-up on issues raised through
       analytical procedures that identified risk factors, such as potential duplicate addresses or
       names and significant reported monthly income by HPRP participants.

The audit generally covered the period October 1, 2009, through December 31, 2010, and was
extended as needed to accomplish the objectives. We performed the audit fieldwork from March
through June 2011 at the County Division of Housing and Community Development and the
Division of Training and Employment.

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:

                      Program operations – Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

                      Compliance with laws and regulations – Policies and procedures that
                      management has implemented to reasonably ensure that resource use is
                      consistent with laws and regulations.

                      Safeguarding resources – Policies and procedures that management has
                      implemented to reasonably ensure that resources are safeguarded against
                      waste, loss, and misuse.

                      Validity and reliability of data – Policies and procedures that management
                      has implemented to reasonably ensure that valid and reliable data are
                      obtained, maintained, and fairly disclosed in reports.

               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 the effectiveness or efficiency of operations, (2) misstatements in
               financial or performance information, or (3) violations of laws and regulations on a
               timely basis.


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Significant Deficiency


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

            Essex County officials had not established and implemented adequate policies and
            procedures to ensure:

                   Compliance with laws and regulations when they did not conduct quarterly
                   on-site monitoring of the County’s subrecipient and ensure that its
                   subrecipient implemented corrective action to address deficiencies disclosed
                   during the County’s monitoring of its subrecipient’s administration of the
                   County’s HPRP (see finding).

                   That resources were safeguarded when their subrecipient disbursed HPRP
                   funds on ineligible program costs and for participants whose eligibility was
                   not adequately supported (see finding).




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                                    APPENDIXES
Appendix A

                         SCHEDULE OF QUESTIONED COSTS


              Recommendation
                  number              Ineligible 1/             Unsupported 2/
                      1A                   $43,833
                      1B                                            $141,260
                     Total                 $43,833                  $141,260



1/   Ineligible 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.

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.




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Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




                         16
Ref to OIG Evaluation   Auditee Comments




Comment 1
Comment 2

Comment 3


Comment 4




Comment 5



Comment 6

Comment 7




                         17
                  OIG Evaluation of Auditee Comments
Comment 1   County officials stated that they did not detect any concern on the part of the
            subrecipient in its ability to administer the program during its monitoring visits
            and phone conversations. However, our review of the County monitoring reports
            noted that the reports identified deficiencies with subrecipient files and that
            County officials had not performed follow-up to ensure that correction action was
            taken. Further, OIG’s review of case files reviewed by County officials revealed
            noncompliance issues that were not noted by the County.

Comment 2   As agreed, County officials should have conducted quarterly monitoring visits in
            compliance with its substantial amendment to its year 2008 Action Plan.

Comment 3   HUD used the Homeless Resource Exchange (HUDHRE.INFO) to disseminate
            program requirements, policy updates and answers to frequently asked questions.

Comment 4   At the exit conference County officials provided a copy of the invoice to support
            $590 in moving expenses; consequently, we adjusted the report to note that this
            expense was properly supported.

Comment 5   County officials stated that the fees cited in the report ($6,068) were court ordered
            and if not paid the tenants would have literally become homeless. The County
            believes that these costs should not be disallowed since the subrecipient properly
            applied the criteria found in the HUD issued Eligibility Determinations and
            Documentation guidelines, which states “subgrantees must assess and document
            whether the household would become literally homeless “but for” HPRP
            assistance”. The “but for” criteria applies to determining whether an individual is
            eligible for HPRP assistance, and then determinations must be made as to the
            types of eligible costs for which assistance would be provided. The HPRP notice-
            (Part IV.A.2.d) provided that HPRP funds may be used for legal service to assist
            program participants with legal advice and presentation in administrative or court
            proceeding related to tenant or landlord or housing issues, but not for legal fees
            incurred by landlords.

Comment 6   During the audit and at a pre-exit conference, subrecipient officials were provided
            the applicable citations used to determine that the $37,765 was ineligible, and the
            applicable citations are included in appendix C of the draft audit report, which
            was provided to the grantee and the subgrantee prior to the exit conference.

Comment 7   County officials stated that the County will continue to work with the subrecipient
            to provide documentation to support the $141,260. As such, this documentation
            should be provided to the HUD field office as part of the audit resolution process.




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Appendix C
                                      CRITERIA

  A. HUD Federal Register Notice FR-5307-N-01, effective March 19, 2009, outlined the
     allocation formula and amounts, the list of grantees, and requirements for HPRP.
     The notice included the following:

     While HUD will allow grantees the discretion to develop prevention or rapid rehousing
     programs that meet locally defined needs, HUD also expects that these 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 HPRP after the program concludes. (Part I.A.)

     To receive HPRP-funded financial assistance or housing relocation and stabilization
     services, a household must meet at least the following minimum criteria:

     1. Applying households must receive at least an initial consultation and eligibility
     assessment with a case manager or other authorized representative who can determine
     eligibility and the appropriate type of assistance needed. (Part IV.D2.1)

     2. The household’s total income must be at or below 50 percent of area median income.
     (Part IV.D2.2)

     3. The household must be either homeless (to receive rapid rehousing assistance) or at
     risk of losing its housing (to receive homelessness prevention assistance) and meet both
     of the following circumstances: (1) no appropriate subsequent housing options have been
     identified, and (2) the household lacks the financial resources to obtain immediate
     housing or remain in its existing housing. (Part IV.D2.3)
     After 3 months, if program participants receiving short-term rental assistance need
     additional financial assistance to remain housed, they must be evaluated for eligibility to
     receive up to 15 additional months of medium-term rental assistance, for a total of 18
     months. HUD is requiring grantees and subgrantees to certify eligibility at least once
     every 3 months for all program participants receiving medium-term rental
     assistance.(Part IV.A.1.a(1)

     Rental assistance payments cannot be made on behalf of eligible individuals or families
     for the same period and for the same cost types that are being provided through another
     Federal, State, or local housing subsidy program. (Part IV.A.1.a(5))

     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 or her household has an account in his or her
     name with a utility company or proof of responsibility for making utility payments, such
     as cancelled checks or receipts in his or her name from a utility company. (Part IV.A.1.c)


                                              19
   HPRP funds may be used for legal services to help people stay in their homes, such as
   services or activities provided by a lawyer or other person(s) under the supervision of a
   lawyer to assist program participants with legal advice and representation in
   administrative or court proceedings related to tenant or landlord matters or housing
   issues. (Part IV.A.2.d)

   The rental assistance paid cannot exceed the actual rental cost, which must comply with
   HUD’s standard of “rent reasonableness.” “Rent reasonableness” means that the total
   rent charged for a unit must be reasonable in relation to the rents being charged during
   the same period for comparable units in the private unassisted market and must not
   exceed rents being charged by the owner during the same period for comparable
   nonluxury unassisted units. To make this determination, the grantee or subgrantee should
   consider (1) the location, quality, size, type, and age of the unit and (2) any amenities,
   housing services, maintenance, and utilities to be provided by the owner. Comparable
   rents can be checked by using a market study, by reviewing comparable units advertised
   for rent, or with a note from the property owner verifying the comparability of rents
   charged for other units owned (for example, the landlord would document the rents paid
   in other units). (Part IV.A.3)

   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. (Part V.F.)

   Based on lead-based paint requirements, a lead-based paint visual assessment must be
   completed for all units that meet the three following conditions: (1) the household living
   in the unit is being assisted with HPRP financial assistance (rent assistance, utilities
   assistance, utility or security deposits, or arrears), the unit was constructed before 1978,
   and a child under the age of 6 is or will be living in the unit. (Part VI.F.)

   Organizations providing rental assistance with HPRP funds will be required to conduct
   initial and appropriate follow-up inspections of housing units into which a program
   participant will be moving. Units should be inspected annually and upon a change of
   tenancy. (Part VII.C.)

B. HUD HPRP Eligibility Determination and Documentation Guidance, Revised
   March 17, 2010:

   A staff certification of eligibility form must be completed for each household deemed
   eligible for HPRP assistance certifying that the household meets all eligibility criteria for
   HPRP assistance, that true and complete information was used to determine eligibility,
   and that no conflict of interest exists related to the provision of HPRP assistance. The
   form must be completed and signed by the person determining eligibility and his or her
   supervisor for all households determined eligible or recertified on or after November 1,
   2009. (Section 2, Assessment, p.4)


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Documentation requirements for persons at risk of homelessness require that a copy of an
eviction notice from the landlord/property manager of the unit or a court order based on
eviction action that notifies the applicant that he or she must leave and a copy of the lease
naming the applicant as the leaseholder must be in the file. If the lessor is a family or
friend, a copy of an eviction notice from that party notifying the applicant that he or she
must leave and a copy of the lease naming the host family/friend as the leaseholder must
be in the file. (Section 5, Documentation, p.16-17)

Documentation requirements for persons at risk of potential loss of housing due to utility
non-payment include a copy of a utility shut-off notice from the utility company. (Section
5, Documentation, p.16)

In evaluating each HPRP participant’s other financial resources, an assessment form or
other documentation must
1. Be documented by an HPRP case manager or other authorized existing housing staff,
2. Include a review of current account balances in the checking and saving account held
    by the applicant household,
3. Include an assessment summary or other statement indicating that the applicant lacks
    financial resources and support networks to obtain other appropriate subsequent
    housing or remain in current housing, and
4. Be signed and dated by an HPRP case manager or other authorized HPRP staff.
    (Section 5, Documentation, p.20)




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