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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Washington State Department of Commerce to determine whether it complied with the HOME Investment Partnership Program project eligibility, administrative cost, program income, accessibility, and match fund requirements. We selected the State because it received over $31 million in HOME grants from HUD in fiscal years 2009 through 2011 which placed it at the top of our risk assessment for Region X.

The State generally complied with HOME requirements. It selected eligible projects and correctly accounted for administrative costs and program income. However, it did not always (1) verify that HOME projects met accessibility standards or (2) accurately report matching contributions to HUD.

We recommend that HUD require the State to develop and implement procedures for more detailed HOME project inspections and direct the project in Stanwood, WA to bring its accessible units into compliance with accessibility standards. We also recommend that the State develop and implement procedures to verify that funds included as match meet all the HOME affordability requirements and reduce the match carry-forward by $797,135.