We selected the Tarrant County Community Development Division (Tarrant County) HOME Investment Partnerships Program (HOME) and Neighborhood Stabilization Program (NSP) for review because the U. S. Department of Housing and Urban Development's management expressed concerns about Tarrant County's HOME program. The objectives were to determine Tarrant County's (1) compliance with HOME regulatory requirements, (2) eligibility of HOME activities and administrative costs, (3) oversight and performance of subrecipients and community housing development organizations (CHDO), and the NSP plan's feasibility.

Tarrant County generally administered its HOME grants in accordance with applicable program requirements. However, a Tarrant County CHDO, Development Corporation of Tarrant County (Corporation), lacked capacity. Also, Tarrant County did not monitor its CHDOs in 2008 and expended $2,041 in HOME funds on ineligible and unsupported costs.

We recommended that the Director, Community Planning and Development, Fort Worth Office (1) deny awarding additional grants to the Corporation for single-family purchase and rehabilitation activities until it demonstrates capacity to properly administer the activities, (2) reiterate to Tarrant County its responsibilities regarding monitoring all of its subrecipients, and (3) require Tarrant County to reimburse its HOME program $2,041 from nonfederal funds for ineligible and unsupported HOME funds expended.