We recommend that the Deputy Assistant Secretary for Grant Programs instruct the Philadelphia, PA, field office to require Luzerne County to provide documentation to support the fair value of the property at the time of disposition. If documentation cannot be provided, the grantee should be required to reimburse $575,263 to its CDBG line of credit from non-Federal funds. If documentation can be provided, the grantee should be required to determine and reimburse its local bank account from non-Federal funds the additional program income not already reported and properly report the additional program income in IDIS under the activity ID that generated the income.

We recommend that the Deputy Assistant Secretary for Grant Programs issue guidance to HUD staff and grantees to clarify the applicability of change of use requirements in cases where there is both a repayment from non-Federal funds and a voluntary grant reduction.

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.

We recommend that the General Deputy Assistant Secretary for Community Planning and Development, develop and implement a quality control review process at the headquarters level to ensure compliance with monitoring requirements for reports and exhibits, to include but not be limited to explaining procedures performed and adequately explaining and providing supporting documentation for conclusions drawn.

Implement revised code enforcement program policies and procedures to meet CDBG requirements. This will help ensure that the remaining $328,918 budgeted for code enforcement activity 531 is put to better use.

Support the $31,186 After School program (activity 501) costs, including the reasonableness of the contract costs and meeting the limited clientele national objective, or repay the program from non-Federal funds.

Support the reasonableness of the $95,736 in cost allocations charged as CDBG administrative (activity 522) costs or repay the costs from non-Federal funds.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse $3,536,974 to the County’ HOME program line of credit for assistance spent on the four activities that were partially terminated or noncompliant with program requirements.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide disbursement documentation to support the eligibility of the $435,094 made for the two activities or repay the County’s HOME program line of credit from non-Federal source.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documentation to support that laborers associated with the activity are compensated in compliance with Davis-Bacon wage rates. If documentation cannot be provided, $567,767 needs to be reimbursed to the County’s HOME line of credit from non-Federal sources.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse $242,269 to the County’s HOME program line of credit for CHDO reserve fund disbursed to the ineligible CHDO.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documentation to support that at least one-third of the Homefirst board were representatives of a low-income community. If documentation cannot be provided, reimburse the $227,903 to the County’s HOME program line of credit from non-Federal sources.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse the $536,507 in program income to the County’s HOME program local bank account and record the income in IDIS.

We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documents, such as pay stubs and bank statements, to support the eligibility of the two home buyers. If documentation cannot be provided, reimburse $260,736 from non-Federal sources to the County’s HOME program line of credit.

We recommend that HUD’s Acting Deputy Assistant Secretary for Grant Programs instruct City officials to reimburse the Program from non-Federal funds $18,274,054 in exempt State sales tax on repairs and maintenance services.

Complete the implementation of the new accounting system and ensure it tracks program funds to a level that supports compliance with HUD requirements.

Provide support that $944,687 (Footnote 2: Emergency funds of more than $1.1 million drawn between July 1, 2011, and December 31, 2015, were adjusted to consider $158,800 questioned in recommendation 1C and $38,164 questioned in recommendation 1D.) in Emergency funds drawn from HUD is reconciled with the accounting records and that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes or reimburse the Emergency programs from non-Federal funds.

Reimburse $189,227 to the Emergency programs from non-Federal funds for ineligible charges made to the programs.

Submit supporting documentation showing the eligibility, reasonableness, and allocability of $38,164 charged to the Emergency programs for unsupported drawdowns and equipment cost allocations or reimburse the programs from non-Federal funds.