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Report Fraud, Waste and Abuse
September 26, 2008
2008-CH-1014
ig0851014.pdf

The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the City of Cincinnati's (City) HOME Investment Partnerships Program (Program). The audit was part of the activities in our fiscal year 2007 annual audit plan. We selected the City based upon a request from HUD's Columbus Office of Community Planning and Development and our analysis of risk factors relating to Program grantees in Region V's jurisdiction. Our audit objectives were to determine whether the City effectively administered its Program, appropriately provided match contributions (contributions) for its Program, and followed HUD's requirements. This is the third of three audit reports on the City's Program.

The City did not adequately manage its Program. It incorrectly reported Program contributions in its consolidated annual performance and evaluation reports (consolidated reports), lacked sufficient documentation to support Program contributions reported in its consolidated reports, inappropriately used Program and American Dream Downpayment Initiative (Initiative) funds, failed to ensure that it sufficiently protected Program funds, and lacked documentation to support its use of Program and Initiative funds. These deficiencies have existed with the City's Program for at least three years.

The City did not comply with HUD's requirements in determining and reporting contributions for its Program. It incorrectly reported in its consolidated reports to HUD nearly $2.6 million in Program contributions from 31 Cincinnati Habitat for Humanity (Habitat) projects that did not qualify as affordable housing and was unable to support more than $1.8 million that it reported as Program contributions in its consolidated reports to HUD. In addition, the City inappropriately provided more than $220,000 in Program funds for the 31 Habitat projects in which it did not sufficiently protect the Program funds.

We informed the director of the City's Department of Community Development and Planning (Department) and the Director of HUD's Columbus Office of Community Planning and Development of minor deficiencies through a memorandum, dated September 25, 2008.

We recommend that the Director of HUD's Columbus Office of Community Planning and Development require the City to implement a detailed comprehensive written action plan to improve its procedures and controls to ensure that the City operates its Program in accordance with HUD's and its own requirements, remove incorrectly reported Program contributions of nearly $2.6 million from its consolidated reports to HUD, provide support for more than $1.8 million or remove Program contributions from its consolidated reports to HUD and obtain Program contributions from nonfederal funds for housing that qualifies as affordable housing under the Program, reimburse its Program from nonfederal funds and decommit Program funds for the insufficiently protected Habitat projects, and implement adequate procedures and controls to address the finding 2 cited in this audit report.