We audited the City of Jacksonville/Duval County's (City) HOME Investment Partnerships Program (HOME) as part of our annual audit plan. We selected the City because it had the largest funded program in northern Florida and other risk factors. Our audit objectives were to determine whether the City administered its HOME program in accordance with the U.S. Department of Housing and Urban Development's (HUD) requirements concerning the (1) eligibility of cost and affordable housing for three foreclosed multifamily rental rehabilitation projects, (2) commitment of program funds, and (3) five-year expenditure.

The City did not comply with program requirements for affordability/eligibility of three foreclosed multifamily rental rehabilitation projects and record keeping. The audit identified more than $2.7 million in questioned costs that were subject to repayment for violation of requirements. The City also had not established and maintained an adequate system for filing and retrieving program records. The violations occurred because City management and staff did not follow and enforce program requirements. The review did not identify any reportable violations concerning the City's compliance with the HOME program's commitment and five-year expenditure requirements.

We recommended that the Director of HUD's Jacksonville Office of Community Planning and Development require the City to reimburse more than $2.7 million in funds approved for three foreclosed multifamily rental rehabilitation projects that did not accomplish the program's affordability requirement or meet other program eligibility requirements. We also recommend that the Director require the City to take appropriate actions to ensure management and staff follow program requirements for approval and oversight of multifamily rental rehabilitation activities and improve its system for filing and maintaining program records.