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Document

We audited Union County, NJ’s HOME Investment Partnerships Program based on a risk analysis of the County’s program that considered the amount of funding, the risk score assigned by the U.S. Department of Housing and Urban Development (HUD), and our identification of potential issues.  The objective of the audit was to determine whether County officials had established and implemented adequate controls to ensure that the County’s program was administered in compliance with HOME program requirements.

The County’s program was not always administered in compliance with program requirements.  Specifically, the County’s HOME fund was not reimbursed for assistance spent on partially canceled and noncompliant activities, was used for ineligible and unsupported community housing development organizations (CHDO), and was maintained in a bank account while drawdowns were made from the line of credit.  In addition, activities were not administered in compliance with program requirements, income was not always collected and reported in the Integrated Disbursement and Information System, HOME match was not accurately calculated, and units were either leased to tenants or sold to home buyers without documentation to support eligibility.  As a result, $242,269 was spent on ineligible CHDOs; more than $4.7 million was unavailable for eligible activities and CHDOs; $923,733 was spent on unsupported costs, a CHDO, and two home buyers; and HUD’s and the County’s interest of $597,519 in assisted properties was not protected.   

We recommend that HUD instruct County officials to reimburse more than $3.7 million for disbursements made for terminated and noncompliant activities, and an ineligible CHDO; impose deed restrictions on two properties assisted with $597,519; reallocate $573,689 to an eligible CHDO; provide documents to support the eligibility of a CHDO that received $227,903 in CHDO reserve funds, two home buyers who received $260,736 in HOME assistance, and unsupported costs of $435,094; reimburse $536,507 to the local bank account for the uncollected and unreported program income; and disburse $92,557 to pay eligible HOME costs before making additional drawdowns from the Line of Credit Control System.

Recommendation Status Date Issued Summary
2017-NY-1005-001-A Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse $3,536,974 to the County’ HOME program line of credit for assistance spent on the four activities that were partially terminated or noncompliant with program requirements.
2017-NY-1005-001-B Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to strengthen the County’s administrative controls to ensure that its HOME program is reimbursed for assistance spent on terminated or noncompliant activities.
2017-NY-1005-001-C Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide environmental review documentation, such as environmental assessment and a phase I environmental review, for the activity to support compliance with environmental review requirements.
2017-NY-1005-001-D Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide procurement documentation, such as proof of advertising, bids received, bid analysis reports, contracts, and other documents, for contracts associated with the three activities to support compliance with procurement requirements.
2017-NY-1005-001-E Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide disbursement documentation to support the eligibility of the $435,094 made for the two activities or repay the County’s HOME program line of credit from non-Federal source.
2017-NY-1005-001-F Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to impose deed restrictions or other mechanisms approved by HUD on the two properties that received HOME assistance of $597,519 to enforce affordability requirements during the affordability period.
2017-NY-1005-001-G Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documentation to support that laborers associated with the activity are compensated in compliance with Davis-Bacon wage rates. If documentation cannot be provided, $567,767 needs to be reimbursed to the County’s HOME line of credit from non-Federal sources.
2017-NY-1005-001-H Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to strengthen the County’s administrative controls to ensure compliance with environmental, procurement, and other program requirements.
2017-NY-1005-001-I Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide HOME program training to County staff to ensure compliance with HOME program requirements.
2017-NY-1005-001-J Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reallocate the $573,689 awarded to the ineligible CHDO, thus ensure that the fund is put to better use.
2017-NY-1005-001-K Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse $242,269 to the County’s HOME program line of credit for CHDO reserve fund disbursed to the ineligible CHDO.
2017-NY-1005-001-L Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documentation to support that at least one-third of the Homefirst board were representatives of a low-income community. If documentation cannot be provided, reimburse the $227,903 to the County’s HOME program line of credit from non-Federal sources.
2017-NY-1005-001-M Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reimburse the $536,507 in program income to the County’s HOME program local bank account and record the income in IDIS.
2017-NY-1005-001-N Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to reconcile the County’s carryover balance of HOME match as of September 30, 2015, for the ineligible HOME match contributions and the understated HOME match contributions.
2017-NY-1005-001-O Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to disburse the $92,557 to pay eligible HOME costs before making additional drawdowns from LOCCS.
2017-NY-1005-001-P Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to strengthen the County’s financial controls over reconciling bank records to ensure that HOME funds in the local bank account are spent before drawdowns are made from LOCCS.
2017-NY-1005-001-Q Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documentation, such as pay stubs and leases, to support compliance with HOME program rent limit and income eligibility requirements for the six tenants who occupied HOME-assisted units.
2017-NY-1005-001-R Open January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to provide documents, such as pay stubs and bank statements, to support the eligibility of the two home buyers. If documentation cannot be provided, reimburse $260,736 from non-Federal sources to the County’s HOME program line of credit.
2017-NY-1005-001-S Closed January 13, 2017 We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct County officials to strengthen the County’s administrative controls to ensure that County staff adequately monitors its subgrantee for compliance with HOME program requirements and provide HOME program training to the County subgrantee’s staff.