We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to monitor subrecipients annually as stated in its monitoring policy.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to train its staff regarding HUD requirements and regulations or seek technical assistance.

Modify the recapture provisions of the 35 home-buyer assistance agreements totaling $488,519 to meet HUD recapture requirements relating to the sales price, closing costs, and net proceeds.

Update its procedures to ensure that any additional home-buyer assistance agreements contain recapture provisions that meet HUD recapture requirements relating to the sales price, closing costs, and net proceeds.

Train its staff to ensure that recapture amounts do not exceed net sales proceeds.

Revise and implement written policies and procedures for managing and accurately tracking all NSP3 activity to ensure that the $12,275 in identified closing cost refunds and any additional refunds identified in recommendation 2B are not overpaid by recipients.

Identify any additional closing cost refunds for NSP3 properties using the general ledger, DRGR supporting documentation, and the property file and either repay the recipients from non-Federal funds or update its tracking spreadsheet.

Repay $95 from non-Federal funds to the two recipients who paid more than the assistance provided (appendix E).

Repay the program $1,495 for closing cost expenses not incurred from non-Federal funds and remove the expenses from program records if the City incorrectly recorded the refunds as program income.

Reclassify home-buyer assistance expenses and refunds from the City’s NSP3 ARR program to its NSP3 Homebuyer Assistance Program in DRGR and the general ledger.

Consolidate and reconcile all NSP3 home-buyer assistance tracking spreadsheets and the general ledger with HUD’s DRGR to ensure that all information is accurate and up to date.

Develop and implement written policies and procedures to periodically reconcile all NSP3 tracking spreadsheets to ensure that data remain accurate and up to date.

Provide training to all employees responsible for NSP3 to ensure that the City adequately determines repayment amounts and tracks and records NSP3 activities.

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.