The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s Office of Community Planning and Development’s (CPD) administration of the HOME Investment Partnerships Program’s matching requirements to determine whether CPD effectively reviewed participating jurisdictions’ match logs and the support for their match contributions and whether it applied the correct match reductions in fiscal year 2013.  We selected this audit because of the results of recent external audits (2014-SE-1003, 2013-SE-1001, 2012-SE-1003) in HUD’s Region 10 (Alaska, Idaho, Oregon, and Washington) and to address congressional interest in improving the efficiency of the HOME program.

CPD did not always enforce the HOME requirement that participating jurisdictions maintain sufficient and supported match logs, and it applied incorrect match reductions for 63 participating jurisdictions in fiscal year 2013.  We recommend that CPD (1) issue guidance to help participating jurisdictions accurately report the amount of match contributed and consumed; (2) include monitoring of HOME match during its performance reviews to ensure that match contributions exist, are eligible, and are supported; (3) require the 10 jurisdictions that overstated their excess match balances to remove the overstated amounts from their reported HOME match carry-forward balances; (4) create and implement policies and procedures specifying the process for assigning match reductions; (5) begin using the poverty rate instead of the family poverty rate for determining eligible fiscal match reductions; (6) use the national average for per capita income reported by the U.S. Census Bureau for determining eligible fiscal match reductions; and (7) review the reductions assigned in HUD’s systems  by pulling a report of all match liabilities and comparing that report to the calculated reductions.