Finding Text
Eligibility Determinations for the HOME Program (Material Weakness ? Eligibility) Condition: During testing of compliance with Eligibility requirements, we noted the City issued loans to applicants through the SAFE AT HOME Repair Cost Assistance Program, without completing the eligibility determination process including obtaining the required documentation to support the City?s eligibility determination and performing sufficient reviews and approvals for each project. Criteria: Per the Homeowner Rehabilitation Program Application and Compliance Manual ?Written Agreement? section, the following was noted: ?Before the City provides HOME funds to support homeowner rehabilitation projects, the homeowner(s) must sign a written agreement that meets the requirements of 24 CFR 92.504(c). For homeowners accessing HOME funds for rehabilitation projects, this written agreement will include the following: ? The estimated value of the property, after rehabilitation, will not exceed 95 percent of the median purchase price for the area ? The housing unit will be used as the principal residence of the owner whose family qualifies as a low-income family at the time HOME funds are committed to the project ? The amount and form of HOME assistance ? The rehabilitation work that will be undertaken ? The date for completion ? And the property standards to be met ? The City?s Recapture Policy? The Manual also lists several specific requirements in order for households and individuals to be considered an eligible beneficiary, including income eligibility (25 CFR 5.609). Completed income certifications require review and approval by the City?s HOME Program Compliance Officer. Cause: Required eligibility determinations were not completed (including obtaining required documentation, verifications, reviews and approvals) before providing funding to homeowners. Effect: ? Noncompliance with eligibility compliance requirements per Uniform Guidance and HUD. ? Providing funding to households or individuals that do not meet the eligibility requirements. ? Potential loss or deduction of federal funding in the future due to noncompliance. Isolated Instance or Systematic Problem: We consider this to be a ?systemic? problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend that the City implement a quality control process to ensure that controls are in place and effective and that they help to lower the risk of noncompliance with eligibility requirements per Uniform Guidance and HUD requirements.