We audited the City of Providence RI’s HOME Investment Partnerships program based on an OIG risk assessment, which ranked the City as the highest risk HOME grantee in New England. The objective of the audit was to determine whether the City properly committed and disbursed HOME funds in accordance with Federal and U.S. Department of Housing and Urban Development (HUD) rules and regulations.
City officials did not properly administer their HOME program. Specifically, they did not properly commit and disburse HOME funds in accordance with Federal and HUD rules and regulations. They did not ensure that they (1) met the commitment deadline for their HOME funds for program year 2013, (2) properly documented and supported their underwriting of activities, (3) complied with environmental review requirements, (4) disbursed funds in accordance with requirements, (5) properly tracked and obtained program income, and (6) supported their administrative fees. These deficiencies occurred because City officials and the previous directors of community development lacked adequate program knowledge and disregarded HUD and Federal requirements. Further, City officials did not have adequate underwriting and environmental policies and procedures and had poor record-keeping practices. As a result, they incurred more than $1.4 million in ineligible costs, more than $1.8 million in unsupported costs, and more than $1.2 million in unexpended HOME funds that may need to be reallocated to eligible activities.
We recommend that the Director of HUD’s Boston Office of Community Planning and Development require City officials to (1) repay more than $1.4 million in ineligible costs when commitment and environmental requirements were not properly completed and funds were not properly disbursed, (2) support more than $1.8 million was reasonable, supported, and allowable or repay the funds, (3) support more than $1.2 million in unexpended funds was reasonable and allowable or reallocate the funds, (4) cancel stalled activities in HUD’s Integrated Disbursement and Information System, and (5) develop and implement adequate underwriting and environmental policies and procedures and tools to improve record-keeping practices.