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We audited the Virgin Islands Housing Finance Authority’s Non-Federal Match Program for Community Development Block Grant Disaster Recovery (CDBG-DR) funds.  This Match Program was developed to assist non-Federal entities in paying for their share of projects that addressed unmet needs because of the 2017 Hurricanes Irma and Maria.  We initiated this audit due to the $415 million of CDBG-DR funds allocated by the Authority and to support the U.S. Department of Housing and Urban Development’s (HUD) strategic objective of promoting effectiveness and accountability in long-term disaster recovery.

Our audit objective was to determine whether the Authority effectively administered its Match Program by identifying and assessing any challenges that hindered its ability to achieve program goals.

We determined that the Authority’s administration of its Match Program had weaknesses.  Specifically, the Authority had (1) insufficient financial controls, (2) insufficient oversight of its Match Program-funded projects, (3) inaccurate performance measures reported in its quarterly performance reports, and (4) insufficient documentation to support its national objectives.  This condition occurred because the Authority did not have adequate policies and procedures or did not implement its existing policies to ensure effective administration of its Match Program.  As a result, the Authority was at risk of not managing its Match Program in compliance with HUD requirements and achieving program goals.  Further, this condition could result in the Authority providing program benefits to the intended beneficiaries late and increasing the risk of the Authority issuing improper payments. 

We recommend that the Deputy Assistant Secretary for Grant Programs require the Authority to (1) develop and implement policies and procedures to address the challenges identified and (2) conduct training for its staff and CDBG-DR Match Program recipients.

Recommendations

Key Details
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  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Community Planning and Development

  •   2023-FW-1002-001-A

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement procedures, including financial controls, to enhance its tracking of payments made with CDBG-DR funds and payments made with FEMA funds to ensure that payments are not made for the same invoices, match requirements are not exceeded before closeout, and a thorough review is conducted for award increases and cost reasonableness.

  •   2023-FW-1002-001-B

    Closed on October 20, 2023

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to enforce its subrecipient agreement requirement to submit monthly status reports.

  •   2023-FW-1002-001-C

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement procedures to ensure that all Match Program activities are monitored, and guidance is provided to its Match Program recipients.

  •   2023-FW-1002-001-D

    Closed on October 20, 2023

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement detailed policies and procedures to guide staff in reporting performance outcomes in the QPR and on its disaster recovery website.

  •   2023-FW-1002-001-E

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to revise its policies and procedures to include requirements to document its basis for activities’ meeting the national objective, including the rationale for the service area used and a list of acceptable documents to support that the area was primarily residential for the low- and moderate- income area benefit national objective.

  •   2023-FW-1002-001-F

    We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to conduct training for Authority staff on the newly developed or revised policies and procedures

  •   2023-FW-1002-001-G

    We recommend that the Deputy Assistant Secretary work with the Authority to assess the risk of potential improper payment for projects PW273 and PW100 and vouchers 576322, 583423, and 578761.

  •   2023-FW-1002-001-H

    We recommend that the Deputy Assistant Secretary require HUD program staff to provide technical assistance to the Authority to address deficiencies noted throughout the audit report.