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We audited the City of Hattiesburg’s HOME Investment Partnerships (HOME) program based on a referral from the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development’s field office in Jackson, MS, to address a request by the City’s mayor for a comprehensive review of the City’s HOME program.  In addition, we selected the City for review in accordance with our annual audit plan.  The objective of our review was to determine whether the City administered its HOME program in accordance with HUD’s and its own requirements.

The City did not always administer its HOME program in accordance with HUD’s and its own requirements.  Specifically, the City did not always (1) adequately support commitments or commit funds within the required timeframe, (2) ensure that its written agreements met HUD’s requirements, (3) enter commitments into HUD’s Integrated Disbursement and Information System (IDIS) in a timely manner, (4) disburse funds appropriately, and (5) ensure that activities met its own affordability period requirements.  This condition occurred because the City’s staff was not fully aware of HUD’s and its own requirements and the City lacked adequate procedures to ensure compliance with HUD’s requirements for timeliness of commitments.  As a result, the City (1) inappropriately used more than $441,000 in program funds without adequate documentation to support commitments and disbursements, (2) failed to commit more than $32,000 in program funds within the statutory commitment deadline, and (3) inappropriately disbursed more than $33,000 before executing written agreements.  In addition, HUD and the City lacked assurance that the HOME program was administered in accordance with HUD’s and the City’s requirements.  Lastly, the City compromised the integrity and the degree of reliability that HUD could place on the data in IDIS.

We recommend that the Director of HUD’s Jackson, MS, Office of Community Planning and Development require the City to (1) support more than $474,000 or reimburse its program from non-Federal funds and (2) develop and implement procedures to ensure that the HOME program is administered in accordance with HUD’s and its own requirements.  Further, we recommend that the Director recapture more than $32,000 in program funds not committed by the City.