OFFICE
D OF AUDIT
REGION 2
NEW YORK – NEW JERSEY
Middlesex County, NJ
HOME Investment Partnerships Program
2014-NY-1005 JUNE 10, 2014
Issue Date: June 10, 2014
Audit Report Number: 2014-NY-1005
TO: Anne Marie Uebbing
Director, Office of Community Planning and Development, Newark Field Office,
2FD
//SIGNED//
FROM: Edgar Moore
Regional Inspector General for Audit, New York-New Jersey Region, 2AGA
SUBJECT: Financial and Administrative Control Weaknesses Existed in Middlesex County,
NJ’s HOME Investment Partnerships Program
Enclosed is the U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General (OIG), final audit report on our review of Middlesex County, NJ’s HOME
Investment Partnerships Program.
HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please
furnish us copies of any correspondence or directives issued because of the audit.
The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at
212-264-4174.
June 10, 2014
Financial and Administrative Weaknesses Existed in the
Middlesex County, NJ, HOME Investment Partnerships
Program
Highlights
Audit Report 2014-NY-1005
What We Audited and Why What We Found
We audited Middlesex County, NJ’s County officials did not always expend and
HOME Investment Partnerships administer HOME program funds in compliance
Program based on a risk analysis that with program requirements. Specifically, they
considered funding, the U.S. lacked support to show that funds were committed in
Department of Housing and Urban accordance with regulations and expended for
Development’s (HUD) risk score, and eligible activities, HUD’s and the County’s interest
prior Office of Inspector General audits. in HOME-assisted properties was protected, and a
The audit objective was to determine CHDO was properly organized. We attribute these
whether County officials established deficiencies to County officials’ inadequate financial
and implemented adequate controls and administrative controls. Consequently,
over their HOME program to ensure $833,706 was not committed in a timely manner as
that program funds were expended and required; $24,979 and $220,322 in HOME funds
administered for eligible activities in were expended for ineligible and unsupported
accordance with HUD regulations. activities, respectively; HUD’s and the County’s
interest in $980,436 in HOME-assisted properties
was not protected; and the County lacked
What We Recommend
documentation showing that a CHDO was properly
organized.
We recommend that HUD instruct
County officials to (1) provide support
showing that $833,706 was committed
in a timely manner, (2) reimburse the
County’s HOME program line of credit
from non-Federal funds for $24,979 in
ineligible costs and any unsupported
amount of the allocated costs of
$220,322, (3) record liens or other
appropriate notices of record on
HOME-assisted properties to ensure
that HUD’s and the County’s $980,436
interest in these properties is protected,
and (4) provide support showing that
officials complied with eligibility
requirements at the time of the initial
certification and recertification of its
community housing development
organization (CHDO).
TABLE OF CONTENTS
Background and Objective 3
Results of Audit
Finding 1: There Were Weaknesses in the County’s HOME Program Financial
Controls 4
Finding 2: There Were Weaknesses in the County’s HOME Program
Administrative Controls 8
Scope and Methodology 12
Internal Controls 14
Appendixes
A. Schedule of Questioned Costs and Funds To Be Put to Better Use 16
B. Auditee Comments and OIG’s Evaluation 17
2
BACKGROUND AND OBJECTIVE
The HOME Investment Partnerships Program, authorized under Title II of the Cranston-
Gonzalez National Affordable Housing Act, as amended, is designed to create affordable
housing opportunities for low-income households. The HOME program is the largest Federal
block grant to State and local governments, through which the U.S. Department of Housing and
Urban Development (HUD) has allocated approximately $2 billion annually in formula grants to
the States and hundreds of localities nationwide. Grantees are required to provide matching
funds of 25 percent from non-Federal sources. HOME program regulations are found at 24 CFR
(Code of Federal Regulations) Part 92. HUD has provided additional program guidance in its
guidebook, entitled “Building Home,” dated March 2008.
Grantees are allowed flexibility to use HOME funds for a broad range of eligible purposes to
address local housing needs and assist eligible homeowners. A purpose can include many
activities, such as home purchase or rehabilitation financing assistance, building or rehabilitating
housing for rent or ownership, or other reasonable and necessary expenses related to the
development of nonluxury housing, including site acquisition or improvement, demolition of
dilapidated housing to make way for HOME-assisted developments, and payment of relocation
expenses.
HUD awarded Middlesex County more than $2, $1.7, and $1 million in HOME funds for
program years 2010, 2011, and 2012, respectively.1 The County designated the Division of
Housing, Community Development, and Social Services under the Department of Community
Services to administer its HOME program. The County is governed by a seven-member board of
chosen freeholders, who are elected at large in the November general elections to 3-year terms.
The County’s HOME program disbursed more than $4.2 million in HOME funds during program
years 2010 through 2012 to assist different types of housing activities, including first-time home
buyer and rental housing activities. Approximately $1.5 million, or 34.5 percent, was used for
first-time home buyer activities, and approximately $2.3 million, or 55 percent, was used for
rental housing activities. The remaining approximately $400,000 was used for HOME
administration.
The objective of the audit was to determine whether County officials established and
implemented adequate controls over their HOME program to ensure that program funds were
expended and administered for eligible activities in accordance with HUD regulations.
1
The County’s program year begins on July 1 of each year and ends on June 30 of the next year.
3
RESULTS OF AUDIT
Finding 1: There Were Weaknesses in the County’s HOME Program
Financial Controls
County officials lacked support showing that their HOME program funds were always
committed and expended in accordance with HOME program regulations. We attribute this
condition to weaknesses in the County’s financial controls over maintaining documentation to
support the commitment and expenditure of HOME funds, and unfamiliarity with regulations
related to allocating expenses to the benefiting programs. As a result, County officials lacked
adequate documentation to provide assurance that $833,706 in HOME funds was committed and
expended in accordance with regulations, $24,979 was expended for eligible activities, and
$220,322 charged to the HOME program for an employee’s salary was properly allocated.
The County Lacked
Documentation to Properly
Support the Commitment of
Funds
County officials lacked documentation to show that $833,706 in HOME funds
was committed in a timely manner in compliance with regulations. Regulations at
24 CFR 92.500(d)(1)(B) provide that HOME funds not committed within 24
months after the last day of the month in which HUD notifies the participating
jurisdiction of HUD’s execution of the HOME Investment Partnerships Program
agreement should be recaptured. Regulations at 24 CFR 92.2 provide that HOME
funds are committed when the participating jurisdiction executes a legally binding
agreement to use a specific amount of HOME funds.
County officials reported in HUD’s Integrated Disbursement and Information
System (IDIS)2 that they obtained commitments of $88,100 in a timely manner:
$7,500 in program year 2008 HOME funds for one activity, $46,100 in program
year 2009 HOME funds for six activities, $29,500 in program year 2010 HOME
funds for four activities, and $5,000 in program year 2011 HOME funds for one
activity. However, these activities were later canceled, and County officials had
not updated IDIS to reflect the cancellations and lacked documentation to show
that the funds had been recommitted for other eligible activities in a timely
manner.
In addition, County officials reported in IDIS that $1.1 million in program year
2011 HOME funds was committed in a timely manner for five activities.
2
IDIS is the HUD system through which grantees can draw down their awarded funds and report on what is
accomplished with these funds.
4
However, they lacked executed written agreements, as required, to support the
commitment of $745,606 in activities. We attribute these conditions to
weaknesses in the County’s financial procedures that did not require it to
adequately document commitments to support that they were made in a timely
manner, and that funds for canceled activities were deobligated. As a result, the
County could not assure HUD that HOME funds were committed within 24
months as required.
The County Disbursed Funds
for Ineligible Costs
County officials disbursed HOME funds for ineligible costs. Regulations at 24
CFR 92.616(i) provide that funds disbursed for first-time home buyer activities
must be supported by records documenting that the recipient family qualifies as a
first-time home buyer. However, County officials drew down $23,600 for three
first-time home buyers who were not income eligible for HOME program
assistance. We attribute this condition to weaknesses in the County’s verification
procedures to ensure that applicants for HOME program assistance were eligible.
In addition, County officials drew down $1,379, representing $1,125 that was to
be paid from its Community Development Block Grant program and $254 that
was to be paid from the Homelessness Prevention and Rapid Re-Housing
Program stimulus funds, which was ineligible as a HOME program administrative
cost. We attribute this condition to weaknesses in the County’s procedures for
reviewing HOME expenditures to ensure that all expenditures complied with
program regulations. As a result, HUD lacked assurance that HOME funds
charged to the program were for eligible costs.
The County Lacked
Documentation for the
Allocation of Costs
County officials lacked documentation supporting the allocation of HOME funds
for the salary of an employee who worked on both the HOME and Housing
Choice Voucher programs. Regulations at 2 CFR Part 225, appendix B, section
8(h)(4), provide that if employees work on multiple activities or more than one
Federal award, a distribution of their salaries or wages should be supported by
personnel activity reports or equivalent documentation. However, County
officials charged the HOME program for the employee’s total salary of $220,322
expended during the audit period. We attribute this condition to County officials’
unfamiliarity with regulations related to allocating expenses to the benefiting
programs. As a result, County officials could not ensure that this employee’s
salary was properly allocated to the benefiting programs.
5
Conclusion
County officials lacked support showing that their HOME program funds were
always committed and expended in accordance with program regulations. As a
result, they lacked assurance that (1) $833,706 in HOME funds was committed
and expended in accordance with regulations for eligible costs, (2) $24,979 was
expended for eligible activities, and (3) $220,322 charged to the HOME program
for an employee’s salary was properly allocated to the benefiting programs. We
attribute this condition to weaknesses in the County’s financial controls over
maintaining documentation to support the commitment and expenditure of HOME
funds in a timely manner, and unfamiliarity with regulations related to allocating
expenses to the benefiting programs.
Recommendations
We recommend that the Director of the Newark, NJ, Office of Community Planning
and Development instruct County officials to
1A. Adjust IDIS to reflect that the 12 activities, for which $88,100 in HOME
funds was drawn down, were canceled and provide documentation
supporting that the $88,100 was committed to other eligible activities in a
timely manner as required. If supporting documentation cannot be provided,
the amount should be recaptured in accordance with regulations at 24 CFR
92.500(d)(1)(B).
1B. Provide documentation supporting that $745,606, drawn down for activities
without evidence of executed agreements, was committed in a timely manner
as required. If supporting documentation cannot be provided, the amount
should be recaptured in accordance with regulations at 24 CFR
92.500(d)(1)(B).
1C. Strengthen controls over the commitment of HOME funds to provide greater
assurance that these funds will be committed in a timely manner, properly
supported by executed written agreements, and canceled in IDIS when the
funds are not disbursed.
1D. Reimburse the County’s HOME program line of credit $24,979 from non-
Federal funds for the ineligible first-time home buyer expenses and
administrative costs incurred.
1E. Strengthen the County’s financial controls to provide greater assurance that
costs charged to the HOME program are eligible.
6
1F. Provide a basis to support a reasonable allocation of the employee’s salary
costs of $220,322 charged to the HOME program and reimburse the HOME
program line of credit for any excess costs charged.
1G. Establish and implement a reasonable basis for the allocation of salary costs
for employees who work on more than the HOME program to ensure that
each program bears its fair share of the costs.
7
Finding 2: There Were Weaknesses in the County’s HOME Program
Administrative Controls
County officials did not always comply with HOME program administrative requirements.
Specifically, they lacked support showing that documents were executed to protect HUD’s interest
in HOME-assisted properties, a community housing development organization (CHDO) was
properly organized, and subrecipients were monitored as required. We attribute this condition to
weaknesses in record-keeping procedures. As a result, HUD lacked assurance that its and the
County’s $980,436 interest in properties that were provided HOME assistance was protected, and
that funds were disbursed for eligible activities in accordance with program regulations.
Activity Files Lacked Required
Documentation
Our review of County files for 3 of 4 rental housing activities and 13 of 25 first-time
home buyer activities, for which HOME funds of $980,436 were provided, revealed
that the files lacked documentation required by program regulations. We attribute
this condition to weaknesses in the County’s administrative procedures designed to
ensure that the required documents were reviewed and maintained to support HOME
program expenditures. The table below shows the number of files missing required
documentation.
Schedule of files lacking required documentation
Form HUD-
1, mortgage, Written
mortgage agreement Unsigned Housing
note, or lien without all or undated Lead-based quality
or deed required written paint inspection
IDIS activity restriction3 provisions4 agreements report5 report
Rental housing
1304 X
1667 X X
1800 X
3
Regulations at 24 CFR 92.508(a)(3)(vii) and (xi) require that each participating jurisdiction establish and maintain
sufficient records to enable HUD to determine whether each home-ownership and rental housing project meets the
affordability requirements of regulations at 24 CFR 92.252 and 92.254 for the required period.
4
Regulations at 24 CFR 92.504(c)(5)(i) require that funds disbursed for first-time home buyer activities be supported by
a written agreement that conforms to the requirements in regulations at 24 CFR 92.254(a) and specifies the value of the
property and the time by which the housing must be acquired.
5
Regulations at 24 CFR 92.508(a)(3)(iv) require that records be maintained demonstrating that each project meets the
property standards of 24 CFR 92.251 and the lead-based paint requirement of 24 CFR 92.355.
8
Form HUD-
1, mortgage, Written
mortgage agreement Unsigned Housing
note, or lien without all or undated Lead-based quality
or deed required written paint inspection
IDIS activity restriction3 provisions4 agreements report5 report
Home buyer
1594 X
1603 X X
1616 X X X
1641 X X
1660 X X
1662 X X X X
1669 X X X
1670 X X
1806 X X X X
1818 X
1861 X
1894 X X
1930 X
Total 6 13 1 7 5
Without the required documents to support the activities, County officials could not
provide HUD assurance that its and the County’s $980,436 interest in the assisted
properties would be protected, and that the activities were eligible and carried out in
compliance with HOME program requirements.
A CHDO Lacked Supporting
Documentation
The County’s files lacked required documentation showing that one of its three
CHDOs was properly organized to qualify as a CHDO. Regulations at 24 CFR 92.2
define a CHDO as a private nonprofit organization that maintains accountability to
low-income community residents by maintaining at least one-third of its governing
board’s membership for residents of low-income neighborhoods, other low-income
community residents, or elected representatives of a low-income neighborhood
organization. However, neither the initial certification file nor the recertification file
for one CHDO contained documentation to support that this requirement had been
met. We attribute this condition to weaknesses in the County’s procedures for
ensuring that all documentation required for CHDO certification is reviewed and
maintained. As a result, the County could not assure HUD that HOME funds were
provided to an eligible CHDO.
9
The County Lacked
Documentation Showing That
Subrecipeints Were Monitored
County officials lacked documentation showing that their subrecipients were
monitored as required during program years 2010 through 2012. Regulations at 24
CFR 92.504(a) provide that the participating jurisdiction is responsible for managing
the day-to-day operations of its HOME program and that the performance of each
contractor and subrecipient must be reviewed at least annually. County policy
provided for the monitoring of all program activities to ensure compliance with
applicable HUD regulations and requirements, including compliance with
executed grant agreements and contracts, and the review of subrecipient audits as
required. Further, inspections of construction and rehabilitation projects were to
be performed before payment of vouchers, and inspections of social service
providers were to be performed annually. In addition, rents and tenant incomes
were to be annually monitored during the period of affordability for HOME-
assisted projects. However, County officials did not provide records to document
that the monitoring of subrecipients had been conducted. We attribute this condition
to weaknesses in the County’s record keeping, which prevented it from maintaining
documentation showing that activities were monitored as required. As a result, the
County lacked assurance that its subrecipients performed in accordance with HOME
program requirements.
Conclusion
County officials did not always comply with HOME program administrative
requirements related to maintaining file documentation, ensuring proper certification
of a CHDO, and documenting that subrecipients were monitored as required.
Consequently, they could not ensure that HUD’s interest in HOME-assisted
properties was protected, a CHDO was properly organized, and subrecipients
complied with HOME program requirements. We attribute this condition to
weaknesses in the County’s record-keeping procedures to ensure that all required
documents were reviewed and maintained in activity and CHDO files to ensure that
HOME program funds were expended for eligible activities.
Recommendations
We recommend that the Director of the Newark, NJ, Office of Community Planning
and Development instruct County officials to
2A. Record liens or other appropriate notices of record on the real properties
assisted with HOME funds to ensure that HUD’s and the County’s $980,436
interest in these properties is adequately protected. If liens are not recorded,
County officials should reimburse the County’s HOME line of credit for the
$980,436 from non-Federal funds.
10
2B. Strengthen controls over file maintenance to provide greater assurance that
HUD’s interest in assisted properties is protected.
2C. Provide documentation to support that the CHDO in question complied with
the eligibility requirements at the time of its initial certification and
recertification. If the CHDO did not, the funds provided to it should be
recouped and any additional funding should be dependent upon obtaining
proper certification.
2D. Strengthen monitoring procedures to ensure that subrecipients are monitored
at least annually.
11
SCOPE AND METHODOLOGY
The audit focused on whether County officials established and implemented adequate financial
and administrative controls over the HOME program to ensure that HOME funds were expended
and administered for eligible activities in accordance with HUD regulations. We performed the
audit fieldwork from August 2013 to March 2014 at the County’s office at 75 Bayard Street,
New Brunswick, NJ.
To accomplish our objective, we
Reviewed relevant HOME program requirements and applicable Federal regulations to
gain an understanding of HOME program administration requirements.
Interviewed HUD field office and County staff to gain an understanding of the County’s
program.
Obtained an understanding of the County’s management controls and procedures through
analysis and testing of the County’s responses to management control questionnaires.
Reviewed the County’s organizational chart for its HOME program and its HOME
program policies, including home buyer, monitoring, and accounting policies.
Reviewed the County’s audited financial statements for the fiscal years ending December
31, 2010, and December 31, 2011, to identify trends and potential irregularities.
Analyzed reports from IDIS to obtain HOME disbursement data for the audit period. Our
assessment of the reliability of data included in IDIS reports was limited to the data
sampled, which were reconciled to County records; therefore, we did not assess systems
generating the data.
Analyzed reports from LexisNexis6 to obtain information related to real properties
assisted with HOME funds.
Selected a sample of 30 activities funded with $1.7 million during the period July 2010 to
June 30, 2013, to test compliance with HOME program regulations. The activities
consisted of 25 first-time home buyers, 4 rental activities, and 1 tenant-based rental
activity. The results of this sample are limited to the items tested and cannot be projected
to the universe of HOME-assisted properties.
Reviewed bank statements for accounts used for the County’s HOME program funds and
traced payments and deposits listed on the statements to the County’s accounting records
and IDIS reports for its HOME program.
6
LexisNexis is a private provider of information that helps users verify a person’s identity, comply with legislation,
and support law enforcement and homeland security initiatives.
12
The audit generally covered the period July 1, 2010, through June 30, 2013, and was extended as
needed to accomplish the objective.
We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.
13
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 effectiveness or efficiency of operations, (2) misstatements in
financial or performance information, or (3) violations of laws and regulations on a
timely basis.
14
Significant Deficiencies
Based on our review, we believe that the following items are significant deficiencies:
County officials had not implemented adequate internal controls to ensure
that resources were always used in compliance with laws and regulations
because they lacked documentation to show that HOME funds were
committed in a timely manner (see finding 1).
County officials had not implemented adequate internal controls to ensure
that resources were always safeguarded against waste, loss, and misuse
because HOME funds were used for unsupported and ineligible costs (see
finding 1).
County officials had not implemented adequate internal controls to ensure
that valid and reliable data were always obtained, maintained, and fairly
disclosed in reports because financial information included in the County’s
accounting records did not reconcile to IDIS (see finding 1).
County officials had not implemented adequate internal controls to always
ensure the achievement of program objectives because HOME activities
were not always administered in compliance with program requirements and
Federal regulations (see finding 2).
15
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
AND FUNDS TO BE PUT TO BETTER USE
Recommendation Unsupported Funds to be put
Ineligible 1/
number 2/ to better use 3/
1A $88,100
1B $745,606
1D $24,979
1F $220,322
2A $980,436
$24,979 $965,928 $1,068,536
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.
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.
3/ Recommendations that funds be put to better use are estimates of amounts that could be
used more efficiently if an Office of Inspector General (OIG) recommendation is
implemented. These amounts include reductions in outlays, deobligation of funds,
withdrawal of interest, costs not incurred by implementing recommended improvements,
avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
that are specifically identified. In this case, if the County provides documentation
showing that the commitment of the $88,100 was obtained in a timely manner, HUD can
be assured that the funds were put to better use, and if liens are recorded on the assisted
properties, HUD’s interest in the properties, which were provided $980,436 in HOME
funding, will be protected.
16
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
Comment 1
Comment 2
17
Ref to OIG Evaluation Auditee Comments
Comment 3
Comment 4
Comment 5
Comment 6
Comment 5
18
Ref to OIG Evaluation Auditee Comments
Comment 7
Comment 5
Comment 8
Comment 5
19
OIG Evaluation of Auditee Comments
Comment 1 County officials stated that they will adjust IDIS to report that the subject
activities were cancelled, and that they can provide documentation that the funds
associated with these activities were subsequently committed to additional
activities in a timely manner. This documentation needs to be provided to the
HUD field office for verification as part of the audit resolution process. If
documentation cannot be provided, the amount should be recaptured in
accordance with regulations at 24 CFR 92.500(d)(1)(B).
Comment 2 County officials stated that a written agreement was executed for 1 of the 5
activities prior to committing funds in IDIS. County officials further contend that,
while agreements for the other 4 activities had not been fully executed before
committing the funds, the agreement for one was executed prior to the funds’
commitment deadline. During the audit resolution process with HUD, County
officials will need to provide documentation that written agreements were
executed and funds were committed prior to the funds’ commitment deadline. If
documentation cannot be provided, the amount should be recaptured in
accordance with regulations at 24 CFR 92.500(d)(1)(B).
Comment 3 County officials’ proposed action that no commitment of funds will be made in
IDIS without an executed written agreement and documentation from HOME
fund recipient that all necessary financing has been secured, is responsive to the
recommendation.
Comment 4 County officials stated that they will provide documentation that the three
households that received HOME assistance were income eligible at the time
assistance was provided. If the documentation is not provided, the County needs
to reimburse its HOME line of credit from non-Federal funds.
Comment 5 County officials agreed to take action that is responsive to the recommendation.
Comment 6 County officials stated that the salary of one employee, who works approximately
90 percent of the time on the HOME program, was charged 100 percent to the
HOME program, and that the HOME program was not charged for any of the
salary of three other employees who worked some of their time on the HOME
program. County officials further contend that the salaries of these three
employees which could be allocated to the HOME program exceeded the salary
allocated for the one employee questioned in the finding. However, during the
audit County officials did not provide documentation to support any salary
allocation for the three employees. Therefore, during the audit resolution process
with HUD, County officials will need to provide documentation and obtain HUD
approval for the allocation of these employees’ salaries to the HOME program.
Comment 7 County officials stated that they will provide documentation that the proper liens
have been recorded to secure HOME funding for the projects identified. This
20
documentation needs to be provided to the HUD field office for verification as
part of audit resolution process. If liens are not recorded, County officials should
reimburse the HOME line of credit from non-Federal funds.
Comment 8 County officials stated that they will provide documentation to support the
eligibility of the CHDO. This documentation needs to be provided to the HUD
field office for verification as part of the audit resolution process. If
documentation is not provided to support the CHDO’s eligibility, the funds
provided to the CHDO should be recaptured and any additional funding should be
dependent upon demonstrating eligibility.
21
Financial and Administrative Weaknesses Existed in the Middlesex County, NJ, HOME Investment Partnerships Program
Published by the Department of Housing and Urban Development, Office of Inspector General on 2014-06-10.
Below is a raw (and likely hideous) rendition of the original report. (PDF)