We audited the Municipality of Arecibo’s HOME Investment Partnerships Program as part of our strategic plan based on the results of a recent audit of the Municipality’s Community Development Block Grant program. The objectives of the audit were to determine whether dwelling units acquired under the home-ownership program complied with the HUD’s housing standards and affordability requirements, whether the Municipality disbursed HOME funds within HUD-established timeframes, and reported accurate and supported information in HUD’s Integrated Disbursement and Information System.
The Municipality did not ensure that home-buyer acquisition-only activities met housing standards and that the principal residency requirement was met for the duration of the period of affordability. In addition, it failed to return more than $26,000 in unexpended drawdowns to HUD and did not support the eligibility of $30,000 in program charges. As a result, HUD had no assurance that more than $1 million disbursed was used solely for eligible purposes and that HOME-funded activities met program objectives and fully provided the intended benefits.
The Municipality failed to reprogram and put to better use more than $3,900 in unexpended obligations associated with an activity that was terminated, did not report more than $1,400 in program income, and in two activities it overstated the commitment amount by $919. In addition, the Municipality reported other inaccurate information concerning HOME-funded activities. As a result, HUD had no assurance that the Municipality met HOME program commitment and disbursement requirements.
We recommend that HUD require the Municipality to (1) support that it spent more than $1 million on eligible activities, (2) remit $26,094 in unexpended drawdowns, (3) reprogram and put to better use $4,825 in unexpended and overstated commitments, and (4) develop and implement an internal control plan to ensure that only supported and accurate information is reported to HUD.