Finding 26157 (2022-004)

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Requirement
N
Questioned Costs
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Year
2022
Accepted
2023-08-02
Audit: 23433
Organization: City of Winters (CA)

AI Summary

  • Core Issue: The City is not monitoring compliance with loan provisions for single-family home loans, risking defaults.
  • Impacted Requirements: The Homebuyer Assistance Program Guidelines require regular monitoring to ensure compliance with loan agreements.
  • Recommended Follow-Up: Establish a process to monitor compliance for single-family loans and document adherence to loan provisions.

Finding Text

Finding 2022-004 Home Loan Compliance Monitoring (Uniform Guidance Compliance) Criteria: The City's Homebuyer Assistance Program Guidelines along with the loan agreements specify conditions of default with the loan provisions which should be monitored on a regular basis. Condition: During our test of six Home loan recipients, we noted for four recipients the City was not monitoring compliance with the loan provisions to ensure the loans were not in default. Cause: The City contracted with Yolo County Housing to perform monitoring on multi-family loans, however loans for single family residences are not included in the monitoring agreement. Effect: The City has not monitored compliance with the loan provisions for single family residence loans issued and has no documentation indicating the loan recipients are in compliance with the loan provisions. Recommendation: We recommend the City implement a process to monitor compliance with the loan provisions for recipients of Home loans to ensure proper steps are taken if conditions of default exist. Views of Responsible Officials: Staff turnover and retirement both in Finance and Community Development/Housing, led the city to outsource the housing loan and grant management to Yolo County Housing (YCH). No past monitoring compliance procedures or documents were located for past first-time homebuyer program participants. YCH was coordinating with the State Housing and Urban Development Department in compliance and monitoring for all new Home and CDBG grants. City staff shall adhere to the requirements and implement a process to comply with the loan monitoring guidelines along with the loan agreements specified conditions to ensure proper steps are taken.

Categories

Subrecipient Monitoring Matching / Level of Effort / Earmarking Special Tests & Provisions

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $5.94M
14.218 Community Development Block Grants/entitlement Grants $225,771
84.287 Twenty-First Century Community Learning Centers $154,802
21.027 Coronavirus State and Local Fiscal Recovery Funds $55,480
20.600 State and Community Highway Safety $27,045
10.558 Child and Adult Care Food Program $22,914
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $3,729
16.607 Bulletproof Vest Partnership Program $560
20.205 Highway Planning and Construction $159