We audited the City of Providence RI’s HOME Investment Partnerships program based on an OIG risk assessment, which ranked the City as the highest risk HOME grantee in New England. The objective of the audit was to determine whether the City properly committed and disbursed HOME funds in accordance with Federal and U.S. Department of Housing and Urban Development (HUD) rules and regulations.
City officials did not properly administer their HOME program. Specifically, they did not properly commit and disburse HOME funds in accordance with Federal and HUD rules and regulations. They did not ensure that they (1) met the commitment deadline for their HOME funds for program year 2013, (2) properly documented and supported their underwriting of activities, (3) complied with environmental review requirements, (4) disbursed funds in accordance with requirements, (5) properly tracked and obtained program income, and (6) supported their administrative fees. These deficiencies occurred because City officials and the previous directors of community development lacked adequate program knowledge and disregarded HUD and Federal requirements. Further, City officials did not have adequate underwriting and environmental policies and procedures and had poor record-keeping practices. As a result, they incurred more than $1.4 million in ineligible costs, more than $1.8 million in unsupported costs, and more than $1.2 million in unexpended HOME funds that may need to be reallocated to eligible activities.
We recommend that the Director of HUD’s Boston Office of Community Planning and Development require City officials to (1) repay more than $1.4 million in ineligible costs when commitment and environmental requirements were not properly completed and funds were not properly disbursed, (2) support more than $1.8 million was reasonable, supported, and allowable or repay the funds, (3) support more than $1.2 million in unexpended funds was reasonable and allowable or reallocate the funds, (4) cancel stalled activities in HUD’s Integrated Disbursement and Information System, and (5) develop and implement adequate underwriting and environmental policies and procedures and tools to improve record-keeping practices.
Recommendations
Community Planning and Development
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Status2018-BO-1003-001-AOpenClosed$1,451,559.00Questioned 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 March 18, 2022Repay from non-Federal sources the $1,451,559 in ineligible funds when the HOME program commitment requirements were not completed as required, the environmental reviews were not properly completed, and funds were not disbursed in accordance with written agreements.
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Status2018-BO-1003-001-BOpenClosed$1,559,908.00Questioned 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 March 21, 2022Support that $1,559,908 in HOME funds disbursed was reasonable, supported, and allowable in accordance with Federal requirements or repay from non-Federal funds any amount that cannot be supported.
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Status2018-BO-1003-001-COpenClosed$1,253,596.00Funds 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 March 21, 2022Support that $1,253,596 in funds not yet expended was reasonable, supported, and allowable or reallocate the funds, thus ensuring that they will be put to their intended use.
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Status2018-BO-1003-001-DOpenClosedClosed on August 06, 2020
Develop and implement adequate underwriting policies and procedures for their affordable housing activities and for the downpayment assistance program to ensure that HOME activities are consistent and meet Federal requirements. Further, they should include the downpayment underwriting policies and procedures in the written agreement with the City’s subrecipient.
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Status2018-BO-1003-001-EOpenClosedClosed on July 01, 2021
Cancel activities in IDIS that have had no construction in more than 12 months.
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Status2018-BO-1003-001-FOpenClosedClosed on August 06, 2020
Develop and implement adequate environmental policies and procedures to ensure that HOME activities are properly classified, the environmental review is documented and supported, and that HUD and Federal environmental requirements have been followed before committing HOME funds to an activity
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Status2018-BO-1003-001-GOpenClosedClosed on March 03, 2022
Determine the total supported development costs for the completed HOME activities and calculate and obtain any program income due to the HOME program.
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Status2018-BO-1003-001-HOpenClosed$338,665.00Questioned 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 01, 2021Support that City officials properly administered the HOME program and earned $338,665 in HOME administrative fees or repay from non-Federal funds any amount that cannot be supported.
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Status2018-BO-1003-001-IOpenClosedClosed on August 06, 2020
Develop and implement tools to improve record-keeping practices to support the eligibility, necessity, and reasonableness of the HOME activities.
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Status2018-BO-1003-001-JOpenClosedClosed on July 01, 2021
Request that HUD headquarters recalculate the City’s commitment shortfall for program year 2013 based on the lack of the amendment with the City’s subrecipient and for the projects that were not properly committed.
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Status2018-BO-1003-001-KOpenClosedClosed on July 01, 2021
Provide technical assistance to the City to ensure that City officials responsible for administering the HOME program receive necessary HOME program training.