Finding Text
Name: Community Development Block Grant/State?s Program and Non-Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file. 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 Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context Not applicable. Repeat Finding This is not a repeat finding. 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.