Issue guidance requiring ESG grantees develop and implement internal controls to prevent any duplication of benefits with other Federal rental assistance programs for the ESG program participants, specifically for rapid rehousing and homeless prevention.
Publication Report
2026-LA-1002 | March 10, 2026
The City and County of Honolulu Made Some Improper Payments in its ESG CARES Act Program
We recently issued an audit report on the City and County of Honolulu’s (City) fraud risk management practices, which determined the grantee did not adequately develop a fraud risk management framework for the Coronavirus Aid, Relief, and Economic… moreRelated Recommendations
Community Planning and Development
- Status2026-LA-1002-001-AOpenClosed$714,512.00Questioned 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.
Determine whether the $714,512 paid for 233 signing bonuses under the ESG CARES Act program were reasonable under the program participant’s particular circumstances, and not more than necessary to house the program participants or repay HUD from non-Federal funds.
- Status2026-LA-1002-001-BOpenClosed$197,337.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Develop and implement written policies and procedures that include internal controls for the ESG program to ensure that it, and its subrecipients, prorate the rent amount for the first month for tenant-based rental assistance. Since the City did not prorate rent, there was an estimated overpayment to landlords of $248,572 that could have been put to better use.
- Status2026-LA-1002-001-COpenClosed$51,235.00Questioned 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.
Repay HUD from non-Federal funds $51,235 in overpaid rent to landlords because the first month of rent was not prorated.
- Status2026-LA-1002-001-DOpenClosed
Develop and implement written policies and procedures that include internal controls to prevent any duplication of benefits for the ESG program participants with other programs, specifically for rapid rehousing and homeless prevention.
- Status2026-LA-1002-001-EOpenClosed$10,100.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Review the rental assistance payments made for the ESG CARES Act program to identify other possible duplication of benefits with other rental assistance programs that the City operates. The $10,100 in duplication of benefits identified during the audit could have been put to better use.
- Status2026-LA-1002-001-FOpenClosed$1,933,693.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Develop and implement written policies to ensure that any changes to the expenditure and draw deadlines for the ESG program are provided in a formal document, such as a CPD notice. In this case, implementing these controls would provide clear guidelines to the grantee and help prevent the disbursement of $1,933,693 that was drawn after the draw deadline.
- Status2026-LA-1002-001-GOpenClosed
Issue clarifying guidance to ensure that ESG grantees that operate tenant-based rental assistance programs, prorate the rent amount for the first month based on the lease agreement start date.