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REPORTAR FRAUDE, DESPERDICIO O ABUSO
Febrero 11, 2013
2013-CH-1001
2013-ch-1001.pdf

The U.S. Department of Housing and Urban Development’s Office of Inspector General audited the City of Cleveland’s HOME Investment Partnerships Program. We selected the City based upon our analysis of risk factors related to Program grantees in Region 5’s jurisdiction, recent media coverage regarding the City’s Program, and a request from the U.S. Department of Housing and Urban Development’s (HUD) Columbus Office of Community Planning and Development. Our objective was to determine whether the City complied with Federal requirements and its own policies in the administration of its Program. This is the third of three audit reports on the City’s Program.

The City did not comply with Federal requirements or its own policies in its contracting processes for housing rehabilitation services and its use of Program funds for Repair-A-Home program projects. As a result, the City (1) used nearly $79,000 in Program funds for projects that did not follow Federal requirements or its own policies and (2) was unable to support its use of nearly $254,000 in Program funds for projects.

The City also did not comply with HUD’s requirements in (1) its reporting of Program accomplishments in HUD’s Integrated Disbursement and Information System and (2) the reimbursement of its Program from non-Federal funds for homes acquired through home-buyer activities that were later sold and ownership of the homes had been transferred. As a result, HUD and the City lacked assurance regarding the accuracy of the City’s Program accomplishments reported in HUD’s System, and the City did not reimburse its Program $140,000 in Program funds used for eight homes that were sold and the ownership of the homes had been transferred. Further, the City is at risk of being required to reimburse its Program additional non-Federal funds if the ownership of additional homes acquired under its Housing Trust Fund and Afford-A-Home programs is transferred through foreclosures.

In addition, the City did not comply with HUD’s requirements in its use and reporting of its Program income. As a result, the U.S. Department of the Treasury paid more than $4,000 in unnecessary interest on the Program funds that the City drew down from its HOME investment trust fund treasury account when Program income was available.

We recommend that the Director of HUD’s Columbus Office require the City to (1) reimburse its Program or HUD, for transmission to the U.S. Department of the Treasury, more than $220,000, (2) provide sufficient supporting documentation or reimburse its Program nearly $249,000, and (3) implement adequate procedures and controls to address the findings cited in this audit report.

Region 5 includes the States of Indiana, Illinois, Ohio, Michigan, Minnesota, and Wisconsin.