We audited the City of New Orleans’ HOME Investment Partnerships program in response to a citizen complaint alleging that the City did not monitor its HOME-assisted projects and in accordance with our annual audit plan. Our objective was to determine the validity of the complaint allegations and whether the City administered its HOME program in accordance with Federal and HUD requirements.
We found that complaint had merit as the City did not always properly monitor or administer its HOME program in accordance with requirements. For 13 projects reviewed, the City did not ensure that 4 projects had regulatory agreements, preventing the City from enforcing the affordability and other program requirements. For the remaining nine projects, the City did not always ensure that (1) rents remained within rent limits, (2) it performed initial tenant income eligibility certifications, and (3) it conducted property inspections and onsite monitoring visits. In addition, the City did not track or accurately report unit vacancies and properly report and use its program income. These conditions occurred because the City (1) did not follow the program requirements, (2) lacked supervisory management of staff, (3) did not have adequate written policies and procedures, and (4) had poor record-keeping practices. As a result, the City failed to protect more than $7.5 million in HOME funds disbursed; detect $82,800 in rent overpayments; ensure that affordable housing was available and offered to low-income households; and ensure that program participants lived in decent, safe, and sanitary housing. In addition, the City could not provide HUD with reasonable assurance that it properly managed its HOME program, putting more than $9.3 million in available HOME funds at risk for mismanagement.
We recommend that HUD require the City to develop and implement written procedures and take actions to better ensure that it spends more than $9.3 million. In addition, we recommend that HUD require the City to (1) repay more than $1.8 million, (2) support or repay more than $5.8 million, and (3) develop and implement, and revise its written procedures and management controls.
Recommendations
Community Planning and Development
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Status2017-FW-1012-001-AOpenClosed$9,339,983.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on June 21, 2018We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop and implement a HUD-approved written plan and procedures and take actions that will correct and prevent the deficiencies noted in the finding, improve program administration effectiveness, strengthen the control environment, ensure compliance with HUD regulations and its own policies and procedures, and ensure that it has the continuing capacity to carry out its HOME program activities as required. Implementing this recommendation should ensure that the $9,339,983 in HOME funding available to the City is better used.
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Status2017-FW-1012-001-BOpenClosed$1,829,837.00Questioned 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 17, 2018We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to repay its program from non-Federal funds $1,829,837 for the four projects that were sold and failed to meet the affordability requirements.
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Status2017-FW-1012-001-COpenClosed$82,800.00Questioned 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 July 05, 2022We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to support that rents were within the rent guidelines or repay tenants and/or HUD from non-Federal funds for rent overpayments of $82,800 at Rosa Keller.
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Status2017-FW-1012-001-DOpenClosed$5,718,095.00Questioned 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 July 05, 2022We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to support that all HOME-assisted units at the Greater Treme Consortium, Inc.-Robertson Street, Greater Treme Consortium, Inc.-Dumaine Street, Iberville Project Phase II-Bienville Basin, OIC1-N. Dorgenois Street, OIC2-Painters Street, OIC5-Pauger Street, Treme Cottages, Robert Wolfe Construction-HOME Rental Project, and Rosa Keller projects meet HUD housing property standards or repay its program from non-Federal funds $5,718,095 disbursed in contract costs.
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Status2017-FW-1012-001-EOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures for identifying and resolving property ownership transfers by the HOME organizations and projects and to ensure ongoing compliance with program requirements by project owners.
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Status2017-FW-1012-001-FOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures to ensure that project owners submit required project compliance reports and rents are provided annually to the project owners and that it maintains documentation showing compliance.
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Status2017-FW-1012-001-GOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to establish and implement procedures for ensuring that it performs initial income eligibility determinations, has supervisory review of determinations, and maintains adequate supporting documentation.
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Status2017-FW-1012-001-HOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop and implement adequate written procedures and management controls to ensure that it conducts property inspections and onsite monitoring as required, including but not limited to establishing protocols for collecting and maintaining adequate documentation.
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Status2017-FW-1012-001-IOpenClosedClosed on March 22, 2019
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to update the IDIS PR-47 HOME Vacant Units Report to include accurate and current data and continue this practice periodically.
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Status2017-FW-1012-001-JOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to implement adequate procedures and controls to ensure the timely reporting of program income and that it appropriately spends program income.
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Status2017-FW-1012-001-KOpenClosedClosed on June 21, 2018
We recommend that the Director of HUD’s New Orleans Office of Community Planning and Development require the City to develop tools to improve record-keeping practices and maintain appropriate databases to track data related to property inspections, onsite monitoring, unit vacancies, HOME program participants, available units, tenant-based rental assistance units, and rents.