Clarify guidance to better enhance housing authority understanding of the requirement, including explaining that housing authorities must code ceiling rent tenants as flat rents and explaining what housing authorities should do when maximum rents for low-income housing tax credit properties are lower than the minimum flat rent amounts required by HUD.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop and implement a HUD-approved written plan and procedures and take actions that will correct and prevent the deficiencies noted in the finding, improve program administration effectiveness, strengthen the control environment, ensure compliance with HUD regulations and its own policies and procedures, and ensure that it has the continuing capacity to carry out its HOME program activities as required. Implementing this recommendation should ensure that the $9,339,983 in HOME funding available to the City is better used.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to repay its program from non-Federal funds $1,829,837 for the four projects that were sold and failed to meet the affordability requirements.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to support that rents were within the rent guidelines or repay tenants and/or HUD from non-Federal funds for rent overpayments of $82,800 at Rosa Keller.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to support that all HOME-assisted units at the Greater Treme Consortium, Inc.-Robertson Street, Greater Treme Consortium, Inc.-Dumaine Street, Iberville Project Phase II-Bienville Basin, OIC1-N. Dorgenois Street, OIC2-Painters Street, OIC5-Pauger Street, Treme Cottages, Robert Wolfe Construction-HOME Rental Project, and Rosa Keller projects meet HUD housing property standards or repay its program from non-Federal funds $5,718,095 disbursed in contract costs.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures for identifying and resolving property ownership transfers by the HOME organizations and projects and to ensure ongoing compliance with program requirements by project owners.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures to ensure that project owners submit required project compliance reports and rents are provided annually to the project owners and that it maintains documentation showing compliance.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures for ensuring that it performs initial income eligibility determinations, has supervisory review of determinations, and maintains adequate supporting documentation.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop and implement adequate written procedures and management controls to ensure that it conducts property inspections and onsite monitoring as required, including but not limited to establishing protocols for collecting and maintaining adequate documentation.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to update the IDIS PR-47 HOME Vacant Units Report to include accurate and current data and continue this practice periodically.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to implement adequate procedures and controls to ensure the timely reporting of program income and that it appropriately spends program income.

We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop tools to improve record-keeping practices and maintain appropriate databases to track data related to property inspections, onsite monitoring, unit vacancies, HOME program participants, available units, tenant-based rental assistance units, and rents.

Direct responsible field offices to require the grantees identified by the audit to either provide documentation to support $227,260 in unsupported payments or reimburse their programs from non-Federal funds for costs they cannot support.

Provide guidance to field office staff to clarify the statutory requirements in 42 U.S.C. 5305(a)(24) regarding a principal reduction and a downpayment for direct home-ownership assistance activities.

Develop and implement guidance to communicate appropriate ways for grantees to calculate household income.

Reemphasize to field offices the importance of using the correct monitoring guide to monitor direct home-ownership assistance activities.

Implement adequate procedures and controls to ensure that memberships are sold at or below the fair market value and HUD’s secured interest in the memberships is appropriately valued.

Have a representative of HUD at the closing for membership sales to sign the HUD notes.

Develop and maintain a waiting list for rental units that meets the requirements of the resident home-ownership plan and considers the tenant profile.

Implement adequate procedures and controls to ensure that any rental units vacated by current households or units associated with memberships which were repurchased by the Cooperative and then remained vacant more than 6 months, are rented to very low-, low-, or moderate-income households selected from a waiting list for rental units that meets the requirements of the resident homeownership plan and considers the tenant profile.