Follow-up of the Inspections and Evaluations Division on Its Inspection of the State of Louisiana’s Road Home Elevation Incentive Program Homeowner Compliance (IED-09-002, March 2010)

Date Published: 
Friday, March 29, 2013
Publication/Report Type: 
Audit Reports
Report Number: 
2013-IE-0803
Program Area(s): 
Community Planning and Development
State: 
Louisiana
Summary: 

We completed a follow-up review regarding our recommendations made to the U.S. Department of Housing Urban and Development’s (HUD) Office of Community Planning and Development (CPD) pertaining to our inspection of the State of Louisiana’s Road Home Elevation Incentive program, IED-09-002, issued in March 2010. The objective of the review was to determine whether the State of Louisiana had implemented the four recommendations in our March 2010 report. We agreed to close three of the recommendations cited in our March 2010 report he report. For the remaining recommendation regarding the recovery of $3.8 million awarded to 158 noncompliant homeowners, documentation showed that the State had recovered only approximately $200,900 of the award funds. As of August 31, 2012, the State’s documentation showed that a total of 24,042 homeowners either were noncompliant, including those that had not elevated their homes; were nonresponsive; or did not provide sufficient supporting documentation. Therefore, the State did not have conclusive evidence that the $698.5 million in Community Development Block Grant (CDBG) disaster recovery funds had been used to elevate homes. As a result, this recommendation remains open and has been revised based on our follow-up review due to the increased noncompliance among homeowners who received elevation grants. OIG recommended that HUD’s Office of Community Planning and Development require the State of Louisiana to: (1) Enforce program remedies for noncompliance as stated in grant agreements, starting with the recovery of $437.3 million in elevation grant funds from the 15,027 homeowners who did not elevate their homes within 3 years of the grant agreement date and the State had not collected any of the funds, (2) determine whether the 8,462 homeowners who did not respond to its monitoring survey used the $245 million in elevation grant funds to elevate their homes. If not, the State should recover these funds from the noncompliant homeowners, (3) obtain documentation to validate whether the 553 homeowners, who received $16 million in grant funds, elevated their homes. If not, the State should recover these funds from the noncompliant homeowners, (3) enforce its grant review and recovery procedures to ensure that homeowners comply with the terms of their elevation grant agreements, (4) reimburse the uncollectible elevation grant funds from non-Federal funds.

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