If you work in HUD’s HOME, Community Development Block Grant or Homeless progra), the below post provides insight into what the Inspector General is finding as out of compliance with rules. There are several articles, scroll down to view.
The Colorado Coalition for the Homeless Incorrectly Allocated Its Employee Payroll Time and Charged Ineligible Cost to Its Grants
10/01/2014 02:59 PM EDT
The U.S. Department of Housing and Urban Development – Office of Inspector General audited the Colorado Coalition for the Homeless, Denver, CO in response to issues discovered during a U.S. Department of Housing and Urban Development (HUD) – Denver, Office of Community Planning and Development (CPD), monitoring review. Issues identified during HUD’s review included improperly accounting for administrative costs and the use of grant funds for ineligible expenses. The objectives of our review was to determine whether the Coalition properly assigned employee time among its grants and whether it charged unallowable costs to its grants.
The Coalition incorrectly allocated its employee payroll time among its Supportive Housing Program grants. In addition, it charged ineligible costs to its grants, provided ineligible benefits to its employees, and spent some of its grant money on ineligible supportive housing items. The Coalition also continued to misspend its grant funds as highlighted in previous HUD Office of Inspector General and HUD CPD reviews.
We recommend that HUD require the Coalition to (1) develop procedures to ensure that employee timesheets are accurate; (2) provide support for Homeless Management Information System time charged to its grants; (3) reimburse HUD for ineligible grant expenses; and (4) seek a legal opinion from HUD’s Office of General Counsel regarding the use of grant funds for employee parking, employee gift cards, and transit subsidies.
Complaint Allegations Substantiated – City of Colorado Springs’ HOME and CDBG Programs
10/01/2014 02:54 PM EDT
The U.S. Department of Housing and Urban Development – Office of Inspector General audited the City of Colorado Springs (City) in response to a citizen’s complaint received by our office. The complainant alleged the City committed HOME Investment Partnerships Program (HOME) funds without written agreements, delayed the reporting of Community Development Block Grants (CDBG) program income in a timely manner, and improperly charged some of its program and administrative costs to its HUD grants. Our objective was to determine whether the allegations were valid.
The allegations related to commitment of HOME funds without written agreements were valid. The City fabricated a contract to avoid deobligation of more than $68,000 in HOME funding. In addition, the City committed four projects totaling $1.625 million in HOME funds without written agreements.
The allegations related to the failure to report CDBG program income in a timely manner were valid. The City received CDBG program income on January 4, 2013 but did not deposit the funds until February 14, 2013 in order to avoid a deficiency in HUD’s January 31, 2013 review of the City’s timely expenditure of CDBG funds.
The allegations related to improper charging of program and administrative costs were also valid. The City improperly charged at least 50 percent of the salaries for two of its administrative staff as direct program costs. In addition, the City paid more than $20,000 in HOME and CDBG funds for the maintenance and cleaning of a vacant office building.
We recommend that HUD, 1) recapture $68,681 from the City’s non-Federal funds for the portion of the contract the City’s former executive director fabricated in order to stop HUD from recapturing funds due to a shortfall, 2) require that the City provide support showing the $20,304 used for the vacant office building actually supported eligible activities. For any funds not supported, recapture the funds from non-Federal funds, and 3) take appropriate administrative actions, up to and including debarment, against the City’s former executive director for their actions in providing fabricated documents to HUD which resulted in HUD halting the recapture of non-committed funds.
The HUD Office of the Chief Financial Officer Had Not Always Implemented Its User Fee Policy
10/01/2014 02:50 PM EDT
The U.S. Department of Housing and Urban Development – Office of Inspector General audited HUD’s fiscal year 2013 compliance with the user fee requirements in Office of Management and Budget Circular A-25 and the Chief Financial Officers (CFO) Act of 1990. We initiated the audit based on observations in our audit of the Federal Housing Administration (FHA) annual lender renewal process (Audit Report No. 2010-KC-0002, issued August 6, 2010). We noted that FHA had not updated its user fees for participation in the FHA program since 1993. Our audit objective was to determine whether HUD complied with the user fee requirements of The CFO Act and Circular A-25.
HUD’s Office of the Chief Financial Officer (OCFO) had not always implemented its user fee policy in HUD CFO Handbook 1830.6, REV-1, which is designed to comply with Circular A-25 and CFO Act requirements for user fee reviews. OCFO did not consider other user fees material in comparison to primary collections from insurance fees and loan guarantee fees at FHA and the Government National Mortgage Association. As a result, HUD may not recover potential fee revenue from beneficiaries of its programs.
We recommend that HUD implement HUD CFO Handbook 1830.6, REV-1, publish a user fee schedule, and address HUD’s user fees in its CFO report. OCFO planned to implement the HUD CFO Handbook 1830.6, REV-1, procedures in the next HUD budget process.
HUD – Office of Inspector General Update