U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Hotline

Report Fraud, Waste and Abuse
April 07, 2008
2008-CH-1004
ig0851004.pdf

The the U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the City of Muncie'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 our analysis of risk factors relating to Program grantees in Region V's jurisdiction. Our objectives were to determine whether the City effectively administered its Program and followed HUD's requirements.

The City did not maintain an adequate system of controls to ensure that it commits Program funds within HUD's 24-month commitment deadline and avoids losing the Program funds. As a result, the City must commit more than $1.2 million in Program funds for eligible activities by July 31, 2008, to avoid losing the funds.

The City lacked documentation to support that it followed HUD's regulations and/or its requirements when it used Program funds and/or Program income to provide rehabilitation assistance; downpayments, closing costs, and/or gap financing; and tenant-based rental assistance for Program activities. In addition, it improperly used Program funds after an operating agency agreement with a subrecipient expired. Therefore, it was unable to support its use of more than $215,000 in Program funds and Program income and improperly disbursed more than $6,000 in Program funds.

We informed the director of the City's Community Development Department (Department) and the Director of HUD's Indianapolis Office of Community Planning and Development of minor deficiencies through a memorandum, dated April 1, 2008.

We recommend that the Director of HUD's Indianapolis Office of Community Planning and Development require the City to reimburse its Program from nonfederal funds for the improper use of funds, provide support or reimburse its Program from nonfederal funds for the unsupported payments, and implement adequate procedures and controls to address the findings cited in this audit report. These procedures and controls should help ensure that Program funds and Program income are used in accordance with HUD's regulations and the City's requirements and the City does not lose more than $1.1 million in Program funds over the next five months.