We reviewed the Alameda County HOME Investment Partnership Consortium's use of HOME Investment Partnerships Program (HOME) funds to determine whether it used its allocation of HOME funds in accordance with U.S. Department of Housing and Urban Development (HUD) rules and regulations. We performed the review because there was a high risk for noncompliance due to a lack of HUD monitoring since 2003. We found that the consortium used $5.6 million in HOME funds to pay for construction and rehabilitation cost increases on six projects resulting from unreasonable delays ranging from 31 to 81 months. Additionally, the consortium provided $81,873 in excessive assistance to home buyers under the American Dream Downpayment Initiative. Moreover, the consortium did not comply with HUD's requirements for committing HOME funds within 24 months from the date the funds became available to the consortium.

We recommend the Director of the San Francisco Community Planning and Development Division require the consortium to (i) repay the consortium's HOME trust fund $5.6 million from nonfederal sources for HOME funds used to pay for the cost increases resulting from unreasonably lengthy construction delays and implement policies and procedures to ensure that foreseeable construction delays do not occur; (ii) repay the consortium's HOME trust fund $81,873 from nonfederal sources for the ineligible use of downpayment initiative assistance and implement policies and procedures to ensure that downpayment assistance is calculated using the purchase price; (iii) review all agreements for the use of HOME funds entered into the information system from October 1998 to the present and change the entry dates to the dates of the agreements, repay HUD or have the consortium's future funding reduced by the amount determined not to have been committed within the requisite 24-month period, and implement policies, procedures and internal controls to comply with HUD's requirements for committing HOME funds within 24 months.