The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the Missouri Housing Development Commission’s (Commission) Recovery Act funded Tax Credit Assistance Program (TCAP). Our audit objective was to determine whether the Commission expended Recovery Act grant funds in accordance with Recovery Act requirements and applicable U.S. Department of Housing and Urban Development (HUD) rules. We concluded that the Commission did not always disburse TCAP funds in accordance with Recovery Act requirements and applicable HUD rules. It disbursed more than $3.6 million in TCAP funds for ineligible and improperly documented expenditures.
We recommend that HUD require the Commission to reimburse $137,062 to its U.S. Treasury line of credit from non-Federal funds for the ineligible expenditures. In addition, we recommend that the Commission provide supporting documentation showing the amount includable in the eligible basis for the over $3.4 million of unsupported costs and reimburse its U.S. Treasury line of credit from non-Federal funds for the amount it determined was ineligible or it could not support. Further, we recommend that the Director require that HUD verify the implementation of the Commission’s new review process for the approval of draw requests to ensure that only eligible TCAP expenditures are paid.