Require the borrowers to submit a plan for how they will proceed and use the $8,694,000 million in unused commitments to provide the intended benefits and meet program objectives.
Publication Report
2017-AT-0001 | April 27, 2017
HUD’s Oversight of Section 108 Loans Was Not Adequate To Ensure Compliance With Program Requirements
We audited the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development’s (CPD) Section 108 Loan Guarantees program. We conducted the audit as part of our annual audit plan. Our audit objectives… moreRelated Recommendations
Community Planning and Development
- Status2017-AT-0001-001-AOpenClosedClosed on March 30, 2018$15,814,000.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Reevaluate the feasibility of the two Section 108 activities that failed to meet a national objective and determine the eligibility of the $15,814,000 already invested. Any amount determined ineligible must be reimbursed to the program from non-Federal funds.
- Status2017-AT-0001-001-COpenClosedClosed on August 25, 2017$75,000.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Require the borrower to provide all supporting documentation and evaluate the allowability and eligibility of $75,000 used for the unauthorized activity. Any amount determined ineligible must be reimbursed to the program from non-Federal funds.
Develop procedures directing field offices to include the review of Section 108-funded activities when performing the annual reviews of Block Grant recipients.
Develop procedures to ensure that the information necessary to monitor program performance and compliance with program requirements is promptly provided to the field offices.
Implement procedures to ensure that borrowers comply with all loan contract provisions and that required documents are submitted, including bank agreements, monthly statements, and security documents. If a borrower does not provide evidence that it has complied with all program requirements, HUD must initiate appropriate remedial actions under paragraph 12 of the contract.
Develop and implement a tracking system for monitoring reviews of Section 108 loans.