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We audited Community Action North Bay’s Continuum of Care Program based on hotline complaints (HC-2016-2275 and HT-2019-1142) and concerns expressed by the San Francisco Office of Community Planning and Development that included matching noncompliance issues.  The complaints alleged improper accounting, timekeeping irregularities, unreported program income, and conflicts of interest.  Our objective was to determine whether the Community administered its Continuum of Care Program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.

The complaints and concerns had merit.  The Community did not administer its Continuum of Care Program in accordance with HUD requirements.  Specifically, it did not maintain documents required to support that (1) it met the matching contribution requirement, (2) its rapid rehousing and permanent supportive housing programs assisted eligible individuals, and (3) program income and expenses were supported and eligible.  These conditions occurred because the Community did not implement corrective actions recommended by HUD and its staff lacked the knowledge and skills needed to administer the program.  As a result, the Community is at risk of having to repay HUD grant funds totaling $647,827 if it cannot provide supporting documentation related to required matching contributions.  It also could not support the eligibility of individuals assisted by its rapid rehousing and permanent supportive housing programs.

We recommend that the Director of HUD’s San Francisco Office of Community Planning and Development require the Community to (1) support that it met the matching contribution requirement or reimburse HUD $577,670 from non-Federal funds, (2) reclassify $28,576 as program income to the specific permanent supportive housing program, and (3) support that $2,687 paid to a board member for legal services was allowed through a HUD-approved waiver or repay HUD from non-Federal funds.

Recommendation Status Date Issued Summary
2020-LA-1001-001-A Cerrado Enero 31, 2020 Support that it met its $161,957 matching contribution required for the $647,827 it drew down for expenses related to its four HUD-funded programs. If the Community cannot provide support, it should reimburse HUD $577,6707 from non-Federal funds.
2020-LA-1001-001-B Cerrado Enero 31, 2020 Develop and implement written policies and procedures to ensure that it maintains documentation to support matching contributions received in compliance with HUD requirements.
2020-LA-1001-001-C Cerrado Enero 31, 2020 Repay HUD $15,163 from non-Federal funds for the rental assistance provided to five ineligible individuals.
2020-LA-1001-001-D Cerrado Enero 31, 2020 Support the eligibility of the 11 individuals who received rental assistance through its rapid rehousing program or repay HUD $26,676 from non-Federal funds.
2020-LA-1001-001-E Cerrado Enero 31, 2020 Work with HUD to determine the eligibility of current permanent supportive housing residents and if residents are determined ineligible, take appropriate action.
2020-LA-1001-001-F Cerrado Enero 31, 2020 Implement its written policies and procedures to ensure that only eligible individuals receive rapid rehousing assistance.
2020-LA-1001-001-G Cerrado Enero 31, 2020 Implement its written policies and procedures to ensure that individuals entering its permanent supportive housing are eligible.
2020-LA-1001-001-H Cerrado Enero 31, 2020 Support or repay HUD $17,025 from non-Federal funds for the questioned payroll costs charged to the programs.
2020-LA-1001-001-I Cerrado Enero 31, 2020 Develop and implement written policies and procedures to ensure accurate and complete reporting of staff hours charged to each program.
2020-LA-1001-001-J Cerrado Enero 31, 2020 Support the validity of its indirect cost allocations or repay HUD $8,605 from non-Federal funds.
2020-LA-1001-001-K Cerrado Enero 31, 2020 Develop and implement an indirect cost allocation plan, which ensures that indirect costs are charged to the correct program.
2020-LA-1001-001-L Cerrado Enero 31, 2020 Provide technical assistance to the Community to ensure that its staff receives training on documentation of matching contributions and the use of program funds.
2020-LA-1001-002-A Cerrado Enero 31, 2020 Reclassify the $28,576 as program income to the specific permanent supportive housing program that generated it and ensure these funds are used for that specific program.
2020-LA-1001-002-B Cerrado Enero 31, 2020 Develop and implement written policies and procedures to ensure that all program income is recorded and used in accordance with HUD requirements.
2020-LA-1001-003-A Cerrado Enero 31, 2020 Support that $2,687 in payments to the board member for legal services was allowed through a HUD-approved waiver that occurred before the legal services or repay HUD from non-Federal funds.