We audited the City of Dallas’ HOME Investment Partnerships program, specifically, its reconstruction program. A City auditor’s report, multiple news articles, and U.S. Department of Housing and Urban Development (HUD) monitoring reviews identified issues with the City’s Federal funds and record keeping. Our audit objective was to determine whether the City followed HOME regulations and its own policies and procedures when it reconstructed 13 homes and correctly administered its matching contributions.
The City did not follow HOME regulations and its own policies and procedures in its reconstruction program or its administration of its match contributions. The City did not (1) follow environmental regulations, (2) properly assess contractors or ensure that they followed contract terms, (3) check the eligibility status of subcontractors, (4) sign loan agreements, or (5) support and calculate participant income correctly. These conditions occurred because City staff did not have adequate training or direction on environmental requirements and the City hastily reprogrammed $1.02 million to its reconstruction program without proper planning because it believed the money would be recaptured by HUD. As a result, the City rushed projects without ensuring that it followed HOME regulations or its own policies. Therefore, it misspent more than $1.3 million to reconstruct 13 single-family homes. Also, the City did not meet all HOME requirements for its match contributions. This occurred because the City did not believe it had to meet HOME requirements as the properties receiving match contributions were not HOME funded. As a result, it claimed more than $2.9 million in ineligible match contributions.
We recommended that the Fort Worth Office of Community Planning and Development Director require the City to (1) repay HUD more than $1.3 million that it misspent reconstructing homes, (2) perform environmental reviews in accordance with HUD regulations, (3) hire a qualified entity to determine the structural integrity of the reconstructed houses, (4) provide a plan to cover the costs of any potential warranty work needed on the properties, (5) develop procedures to include the review of subcontractors, (6) repay more than $2.9 million in match contributions, and (7) ensure that its employees understand and comply with the HOME income requirements.
Recommendations
Community Planning and Development
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Status2018-FW-1004-001-AOpenClosed$1,322,280.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on April 05, 2021We recommend that the Fort Worth Office of Community Planning and Development Director require the City to repay its HOME program from non-Federal funds $1,322,280, which it misspent reconstructing homes.
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Status2018-FW-1004-001-BOpenClosedClosed on November 01, 2018
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to ensure that staff responsible for environmental reviews understands and complies with environmental requirements.
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Status2018-FW-1004-001-COpenClosedClosed on April 05, 2021
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to hire a qualified entity to determine and correct deficiencies related to 13 reconstructed homes, including the structural integrity of the homes.
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Status2018-FW-1004-001-DOpenClosedClosed on March 07, 2019
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to provide a detailed plan for covering the cost of any potential warranty work needed on these 13 properties for the entire statutory warranty period.
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Status2018-FW-1004-001-EOpenClosed$7,777,688.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on December 18, 2018We recommend that the Fort Worth Office of Community Planning and Development Director require the City to support or reduce its match contributions by $2,967,568 and review its HOME match contributions for the past 5 years for compliance with HOME regulations and report the results to the Fort Worth Office of Community Planning and Development.
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Status2018-FW-1004-001-FOpenClosedClosed on April 30, 2019
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to develop and adopt policies and procedures to address HOME match contribution requirements.
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Status2018-FW-1004-001-GOpenClosedClosed on July 05, 2019
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to ensure that the loan agreements are signed and valid legal instruments.
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Status2018-FW-1004-001-HOpenClosedClosed on April 26, 2019
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to develop policies and procedures, to include the review of all subcontractors in SAM.
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Status2018-FW-1004-001-IOpenClosedClosed on June 12, 2019
We recommend that the Fort Worth Office of Community Planning and Development Director require the City to ensure that its staff understands and complies its policies and procedures including HOME income requirements.