We audited the Jersey City Housing Authority’s (Authority) administration of its public housing capital fund program funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act). This is the second audit report regarding the Authority’s capital fund programs. We selected the Authority because of the size of its capital fund programs and because of its U.S. Department of Housing and Urban Development (HUD) risk rating. Our...

We audited Westbeth Artists Houses (auditee) in response to a complaint submitted to the Office of Inspector General (OIG) hotline alleging that project funds were used to pay an executive director in violation of U.S. Department of Housing and Urban Development (HUD) regulations. Our audit objectives were to assess the merits of the complaint and determine whether project operations generally complied with HUD regulations pertaining to...

We audited the Philadelphia Housing Authority’s (Authority) payments for outside legal services based on a citizen’s complaint alleging misuse of these funds, our observations and concerns regarding the Authority’s use of outside attorneys on prior audits, and concerns over the large sums the Authority paid for outside legal services reported in the media. The Authority paid $30.5 million for outside legal services provided by 15 law firms...

We audited the New Bedford Housing Authority’s (Authority) $9.9 million of the Public Housing Capital Fund Stimulus Formula and Competitive Grants (Recovery Act Funded). Our objective was to determine whether the Authority obligated and disbursed capital funds received under the Recovery Act according to the requirements of the act and applicable U.S. Department of Housing and Urban Development (HUD) rules and regulations. The Authority...

We audited Semper Home Loans, Inc. (Semper), a Federal Housing Administration (FHA) lender approved to underwrite and close mortgage loans without prior FHA review or approval. We selected Semper because its early payment default rate was higher than the default rate in the local area in which it does business. Our audit objectives were to determine (1) whether Semper acted in a prudent manner and complied with U.S. Department of Housing and...

In January 2010, the U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General (OIG) began Operation Watchdog, an initiative to review the underwriting of 15 Federal Housing Administration (FHA) direct endorsement lenders having default and claim rates indicating lender performance problems. The FHA Commissioner had expressed concern regarding the increasing default and claim rates against the FHA insurance fund...

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited Oregon Housing and Community Services to determine whether it timely obligated Neighborhood Stabilization Program (NSP) funds, adequately monitored subgrantee and contractor performance, properly maintained NSP records, and reasonably assured NSP funds were spent for eligible activities. We selected OHCS because it received $19.6 million in NSP...

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the East St. Louis Housing Authority’s (Authority) Public Housing Capital Fund program. Our audit objective was to determine whether the Authority had proper support for its capital fund draws. We concluded that the Authority drew down grant funds for ineligible items and without adequate support. Specifically, it made unsupported draws, excessive...

HUD OIG conducted a survey of HUD’s Supportive Housing Program (SHP); specifically, the monitoring of nonprofit subgrantees (project sponsors) that deliver supportive housing and/or supportive services.  We wanted to assess whether SHP grantees followed Federal regulations and HUD guidance on monitoring project sponsor activities and program expenditures. We also wanted to look at HUD’s role in the grantees monitoring of project sponsors....

We audited the Neighborhood Assistance Corporation of America (NACA), a Department of Housing and Urban Development (HUD)-approved organization providing housing counseling services to qualified home buyers or homeowners with unaffordable mortgage payments. The audit was initiated at the direction of HUD's Inspector General. Our audit objective was to determine whether NACA properly administered its HUD grants used for housing counseling...

We have completed an audit of the U.S. Department of Housing and Urban Development’s (HUD) information security program. We evaluated whether HUD’s Office of the Chief Information Officer (OCIO) had developed security policies, implemented procedures, and continuously monitored its entitywide information system security program. We performed this audit because it is a required component of our fiscal year 2010 consolidated financial statements...

We reviewed Federal Housing Administration (FHA)-insured loan settlement documents from two branches of DHI Mortgage Company, LTD (DHI Mortgage), in Arizona. During a previous audit of loan origination by the same branches (audit report number 2009-LA-1018), there was information indicating that the Real Estate Settlement Procedures Act (Act) might have been violated; however, we were unable to report on the issue at the time. Our review...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the City of East St. Louis, Illinois’ (City) Community Development Block Grant (Block Grant) program. Our objective was to determine whether the City properly managed Block Grant-funded housing rehabilitation contracts. We found that the City awarded more than $1 million in Block Grant funds for 124 of the 147 rehabilitation contracts reviewed...

We audited the City of Mesa’s (grantee) Neighborhood Stabilization Program (NSP1) grant to determine whether the grantee administered the grant in accordance with HUD’s program requirements. The audit was started primarily because the Office of Inspector General’s (OIG) audit plan includes objectives to review Housing and Economic Recovery Act grantees and because staff from the U.S. Department of Housing and Urban Development’s (HUD) Office of...

We audited Lutheran Social Services of Northern California (auditee) in response to a hotline complaint. The complaint alleged that the auditee misused Homelessness Prevention and Rapid Re-Housing Program (HPRP) funds. The specific allegations included (1) ineligible purchases using employee credit cards, (2) unreasonable rental of storage units, (3) caseworkers qualifying family and friends for HPRP who were not eligible, (4) diversion of...

We completed the fifteenth 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 provided to the State of New York in the aftermath of the September 11, 2001, terrorist attacks on the World Trade Center in New York City. During the audit period, October 1, 2009 through March 31, 2010, LMDC...

We audited the Housing Authority of the County of Cook’s (Authority) nonprofit development activities. The audit was part of the activities in our fiscal year 2010 annual audit plan. We selected the Authority’s nonprofit development activities based on a citizen’s complaint forwarded to our office from the County of Cook, IL’s Office of the Independent Inspector General. Our objective was to determine whether the Authority administered its...

We conducted an audit the U.S. Department of Housing and Urban Development’s (HUD) oversight of public housing authorities’ (authority) energy conservation procedures through energy performance contracting (EPC) in the states of New York and New Jersey (Region 2). We initiated the audit as part of the activities in our 2010 annual plan. The audit objectives were to determine whether HUD had adequate controls to ensure that (1) the costs of EPC...

We audited the City of Pittsburgh’s (City) administration of its Community Development Block Grant (CDBG) funds that it received under the American Recovery and Reinvestment Act of 2009 (Recovery Act). We selected the City for audit because it received a $4.5 million grant, which was the third largest CDBG Recovery Act grant awarded in the State of Pennsylvania and it had disbursed more than half of the grant funds as of July 12, 2010. Our...