Finding 390055 (2023-001)

Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition: During our test of loan monitoring procedures, we noted that all of the home loans tested did not include verification documentation regarding loan recipients were the home owners during the 2022-2023 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause: The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect: Documentation was not provided to verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding: This is a repeat of prior year finding 2022-001. Recommendation: We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.