Finding 1182143 (2025-005)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Home Partnership Investment Program Assistance Listing Number: 14.239 Pass-Through Agency: State Department of Housing and Urban Development Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: Grant compliance requires that Home Investment Partnership Program loans be monitored for compliance with the loan provisions on a regular basis. Such loan requirements are required to ensure HOME loan funds are used in accordance with all program requirements. The requirements are noted in the OMB 24 CFR Part 92.500 and 92.201(b). This requirement states the participating jurisdiction “has committed and expended HOME funds, as required, and has met HOME program requirements particularly as they relate to eligible activities, income targeting, affordability, and matching contribution requirement. Condition: The County has procedures in place used for monitoring loan compliance. This involves sending an email to each HOME beneficiary asking for documents proving they are still a resident (utility bills, insurance documents, etc.) and mailing a physical Certificate of Occupancy for the resident to sign. However, there were two residents which have failed to return any of these documents or a response as of February 27, 2026. The initial inquiry occurred on January 29, 2025 and January 28, 2025 for both residents. Due to an empty employment position at the time of monitoring, the County has failed to perform a physical inspection despite being a procedure in the case of a non-response scenario with a resident. Questioned costs: Known questioned costs of $171,748, the value of two loans Context: HOME loans must be monitored annually to ensure recipients are still living in the residence covered by the loan. CLA haphazardly selected six loans from a population of eighteen HOME Program loans to test continuing compliance and found that two of those loans did not have adequate documentation to show continued monitoring occurred. Cause: Due to an empty employment position at the time of monitoring, the County was unable to perform physical inspections of two residents who failed to respond to the County's inquiry. Effect: Not following through on continual monitoring requirements could result in noncompliance with program requirements and could potentially cause an overstatement of program loan receivables reported by the County. Repeat Finding: 2024-006 Recommendation: CLA recommends the County hires the staff necessary to ensure that all monitoring procedures are performed. Views of responsible officials: There is no disagreement with the audit finding.