We completed the 17th audit report in our ongoing review of the Lower Manhattan Development Corporation’s (LMDC) administration of the $2.783 billion in Community Development Block Grant (CDBG) Disaster Recovery Assistance funds awarded to the State of New York in the aftermath of the September 11, 2011, terrorist attacks on the World Trade Center in New York City.  During the audit period, April 1, 2011 through March 31, 2012, LMDC...

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) requirements.  The alleged violations related to fraudulent expense reimbursements sought and received by a contractor from CDBG funds.  The Department of Justice filed a complaint under the False Claims Act and in February 2013 reached a settlement with the subject.  The subject acknowledged and...

We completed a review of Nassau County, NY Office of Community Development’s administration of its HOME Investment Partnerships Program. We selected this auditee based on a risk assessment conducted by the U.S. Department of Housing and Urban Development’s (HUD) New York City Office of Community Planning and Development. The objectives of the audit were to determine whether the County committed and obligated HOME funds in a timely...

We audited the City of Rocky Mount, NC’s HOME Investment Partnerships program based on a request from the U.S. Department of Housing and Urban Development’s (HUD) Greensboro, NC, Office of Community Planning and Development.  The request expressed several concerns regarding the City’s administration of its HOME program.  Our objective was to determine whether HUD’s concerns had merit and whether the City operated its HOME program in...

We audited the City of Albany, NY’s administration of its supplemental Community Development Block Grant program funded under the American Recovery and Reinvestment Act of 2009 (CDBG-R). The objectives were to determine whether the City administered its CDBG-R program effectively, efficiently, and economically in accordance with applicable rules and regulations, including the Recovery Act, and other U.S. Department of Housing and Urban...

We completed a review of Deutsche Bank’s Job Creation and Retention Program (JCRP) grant. We selected this auditee based on a hotline complaint, case number HL-2012-0199, that was referred from the United States Government Accountability, FraudNet control number 58392, received on November 23, 2011. The complaint alleged that Deutsche Bank officials fraudulently received a $34.5 million JCRP grant under the guise that they would maintain 5,500...

We completed a review of the Village of Spring Valley, NY, a subrecipient of Rockland County, NY. We selected this auditee based on a hotline complaint that was referred from the Federal Housing Finance Agency (FHFA) OIG, Complaint Number Z-12-0445-1, received on February 14, 2012. The complaint alleged that the Village (1) used eminent domain and Federal funds to seize property, (2) transferred ownership of properties to a developer to be...

We completed a corrective action verification of the recommendations made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Community Planning and Development (CPD) pertaining to our review of The City of Newburgh, NY’s Section 108 Loan Guarantee program, Audit Report 2009-NY-1001, which was issued November 7, 2008. The purpose of the corrective action verification was to determine whether the audit recommendations...

We audited the Buffalo Municipal Housing Authority’s Public Housing Capital Fund Stimulus (Formula) program funded under the Recovery and Reinvestment Act of 2009 based on an Office of Inspector General risk analysis and the amount of funding the Authority received. The objectives of the audit were to determine whether Authority officials (1) procured contracts in accordance with U.S. Department of Housing and Urban Development (HUD)...

We completed the 16th audit report in our ongoing review of the Lower Manhattan Development Corporation’s administration of the $2.783 billion in Community Development Block Grant (CDBG) Disaster Recovery Assistance funds awarded to the State of New York in the aftermath of the September 11, 2011, terrorist attacks on the World Trade Center in New York City. During the audit period, April 1, 2010 through March 31, 2011, LMDC disbursed...

We audited the West Village Expansion Project in Durham, NC, a U.S. Department of Housing and Urban Development (HUD) Section 220-insured property, due to a citizen’s hotline complaint. The anonymous complainant alleged that the managing member of the project’s ownership entity spent an excessive amount of project funds on legal fees, transferred more than $500,000 to another entity owned by it, and failed to keep the mortgage current. Our...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office, Southern District of New York, in conducting a review of MortgageIT, Inc. MortgageIT is a residential mortgage banking company headquartered in New York City, NY. Originally founded in 1988, MortgageIT was acquired by Deutsche Bank in 2007, and was a HUD-approved Title II nonsupervised mortgage company. Its home...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review of loans underwritten by Countrywide Home Loans Inc., and its divisions Countrywide Bank FSB and Countrywide Mortgage Ventures, LLC. The objective of the review was to determine whether Countrywide underwrote Federal Housing Administration (FHA) loans in accordance with HUD-FHA regulations. Countrywide is a subsidiary of Bank of...

We audited the public housing program of the Housing Authority of the City of Hickory, NC, due to a citizen’s hotline complaint. Our objectives were to evaluate the merits of the complaint allegations and determine whether the Authority complied with U.S. Department of Housing and Urban Development (HUD) requirements for procurement, cash disbursements, a 2004 Resident Opportunity and Self-Sufficiency (ROSS) grant, and inventory control. The...

We completed a review of the New York City Housing Authority’s use of Federal funds. We selected this auditee based on a hotline complaint, case number HL-2011-0705, which alleged a pattern of waste, overspending, and abuse by the Authority. Specifically, the complaint alleged that the Authority (1) froze its Section 8 vouchers due to lack of available funds, (2) overpaid at least one housing manager with an annual salary of $187,000, (3) paid...

As part of the Office of Inspector General’s (OIG) nationwide effort to review the foreclosure practices of the five largest Federal Housing Administration (FHA) mortgage servicers (Bank of America, Wells Fargo Bank, CitiMortgage, JP Morgan Chase, and Ally Financial, Incorporated) we reviewed Bank of America’s foreclosure and claims processes. In addition to this memorandum, OIG issued separate memorandums for each of the other four reviews....

We audited the City of Syracuse, NY, pertaining to its Economic Development Initiative (EDI)-Special Project grants. The audit objective was to determine whether City officials were administering EDI Special Project grants effectively, efficiently, and economically in accordance with applicable rules and regulations. Specifically, we wanted to determine whether City officials expended EDI funds for eligible activities that were fully supported...

We completed an audit of the City of Buffalo, NY (City) pertaining to its administration of its supplemental Community Development Block Grant (CDBG) program funded under the American Recovery and Reinvestment Act of 2009. We selected the City based on concerns identified in our completed audit of the City’s CDBG program, Audit Report Number 2011-NY-1010 issued April 15, 2011. Our audit objectives were to determine whether the City...