HUD OIG audited the City of Augusta's HOME Investment Partnerships program. The audit was part of the activities in the fiscal year 2007 annual audit plan. The objectives were to determine whether the City complied with HOME program requirements for commitments, production and completion of project activities, and eligibility and support of project costs.

The City's controls over its HOME program were inadequate. As a result, more than $1 million in HOME funds that involved questioned costs and funds that were subject to recapture. Specifically, the City did not (a) properly commit $755,284, (b) have proper documentation and analysis to support approvals and effectively address project performance delays, (c) ensure proper support of more than $196,657, (d) ensure the eligibility of $92,129 for affordable housing compliance, and (e) properly maintain and manage program staff.

OIG recommended that the Director of HUD's Atlanta Office of Community Planning and Development require the City to properly support or repay more than $566,697 in questioned costs and recapture more than $477,373 because of program violations. We also recommend HUD require the City to establish and implement proper controls and procedures to ensure compliance with program requirements.