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We conducted an audit of the City of Houston’s (City) Housing Opportunities for Persons with AIDS (HOPWA) program, which is managed by its Housing and Community Development Department (Department), as part of our strategic plan and regional goals. Our objective was to determine whether the City and its project sponsors complied with U. S. Department of Housing and Urban Development (HUD) HOPWA regulations, requirements and its grant agreements. Specifically, we determined whether (1) expenditures and reimbursements paid by and submitted to the Department were eligible and supported, (2) project sponsors maintained adequate client file documentation to support eligibility, (3) project sponsors’ sites complied with HOPWA housing quality standards, and (4) the Department adequately monitored project sponsors.

The City’s Department and its project sponsors generally complied with its HOPWA grant requirements and HUD regulations as testing on expenditures, reimbursement requests, client file documentation, and site conditions did not disclose any eligibility or compliance issues. However, in violation of its HOPWA grant agreement, the City did not consistently monitor 15 of 18 project sponsors. Monitoring did not occur because the City’s Department did not have the necessary personnel with the experience needed to conduct the required monitoring. The City’s failure to monitor the project sponsors put $7.5 million in HUD funds at risk.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the City to (1) consistently monitor its project sponsors in compliance with its grant agreements and (2) ensure that project sponsors submit the required monthly and quarterly reports in a timely manner or enforce its grant agreements, including declaring breach and withholding funding, if the project sponsors fail to submit them.