We reviewed Federal Housing Administration (FHA)-insured loan settlement documents from two branches of DHI Mortgage Company, LTD (DHI Mortgage), in Arizona. During a previous audit of loan origination by the same branches (audit report number 2009-LA-1018), there was information indicating that the Real Estate Settlement Procedures Act (Act) might have been violated; however, we were unable to report on the issue at the time. Our review…

We audited the City of Mesa’s (grantee) Neighborhood Stabilization Program (NSP1) grant to determine whether the grantee administered the grant in accordance with HUD’s program requirements. The audit was started primarily because the Office of Inspector General’s (OIG) audit plan includes objectives to review Housing and Economic Recovery Act grantees and because staff from the U.S. Department of Housing and Urban Development’s (HUD) Office of…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited the State of Kansas' (State) Neighborhood Stabilization Program I (NSP I). Our audit objectives were to determine whether the State properly obligated its NSP I funds and to determine whether the State's contracts contained all of the required provisions. We concluded the State improperly obligated more than $12 million of its NSP I funds…

We completed a review of the Retreat at Santa Rita Springs (community), a Federal Housing Administration (FHA)-insured multifamily project under Section 231 of the National Housing Act. Our audit was in response to a request for audit from Representative Gabrielle Giffords of the 8th District of Arizona. The owner defaulted on the $29.9 million U.S. Department of Housing and Urban Development (HUD)-insured mortgage in November 2009, the month…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited National Bank of Kansas City (National Bank). Our audit objectives were to determine whether National Bank followed Federal Housing Administration (FHA) requirements for (1) borrower eligibility and creditworthiness and property eligibility when underwriting loans and (2) implementing a quality control program. National Bank did not follow HUD…

We audited the Homelessness Prevention and Rapid Re-Housing Program at the State of Arizona Housing Department (Department) because it was the largest single Homelessness Prevention and Rapid Re-Housing Program grant awarded within Arizona under the American Recovery and Reinvestment Act of 2009 (Recovery Act). Our objective was to determine whether the Department administered the grant in compliance with Recovery Act and other applicable…

We audited Federal Housing Administration (FHA)-insured loan processes at two DHI Mortgage Company, LTD (DHI Mortgage), branches in Scottsdale, AZ, to determine whether DHI Mortgage originated, approved, and closed FHA-insured single-family loans in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We recently conducted an audit of DHI Mortgage’s Tucson and Scottsdale branches and identified significant…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Kansas City, Kansas Housing Authority (Authority) to determine whether the Authority violated HUD’s waiting list rules when it offered Section 8 vouchers to applicants for Delaware Highlands Assisted Living. We conducted the audit because of concerns raised during a previous audit of the Authority, in which we saw indications that the Authority…

In response to an April 3, 2009, hotline request from the Kaibab Band of Paiute Indians, Pipe Spring, AZ (Kaibab), the U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General reviewed HUD’s evaluation of Kaibab’s application for an Indian Community Development Block Grant (Indian Block Grant) under HUD’s 2008 notice of funding availability. The review objective was to evaluate the merits of the complainant’s…

We conducted a capacity review of the Navajo Housing Authority’s (Authority) operations. The objective of the review was to evaluate the Authority’s capacity to administer its American Recovery and Reinvestment Act (Recovery Act) funds and identify related potential internal control weaknesses that could impact its ability to properly administer the funds. We did not find evidence indicating that the Authority lacked the basic capacity to…

We performed a capital fund administrative capacity review of the Housing Authority of the City of Eloy (Authority) because, despite the Authority’s persistent management problems, HUD awarded the Authority a Public Housing Capital Fund grant of $113,672 under the American Recovery and Reinvestment Act of 2009 (Recovery Act). Our objective was to determine whether the Authority had sufficient capacity to administer its Recovery Act Public…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the development activities of the Kansas City, Kansas, Housing Authority (Authority) to determine whether the Authority improperly spent federal public housing funds when developing and operating nonfederal developments. We conducted the audit because of a citizen complaint received by our office. We concluded that the Authority inappropriately…

We audited Park Lee Apartments to determine whether it complied with the U.S. Department of Housing and Urban Development’s (HUD) regulatory agreement and other federal requirements. We found that Park Lee Apartments did not use its project funds in compliance with HUD and other federal requirements. Specifically, the owner and/or management agents violated the regulatory agreement with HUD by paying $512,562 in questioned costs from the…

We audited FHA-insured loan processes at two DHI Mortgage Company, LTD (DHI Mortgage) branches in Tucson and Scottsdale, Arizona, to determine whether DHI Mortgage originated, approved, and closed FHA-insured single-family loans in accordance with HUD requirements. We chose DHI Mortgage because the Scottsdale, Arizona, branch had a default rate that was double the default rate for FHA-insured loans for the state of Arizona, and then expanded…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Milestone Management Services, Inc. (Milestone), of Topeka, Kansas, in response to a request from the HUD's Office of Multifamily Housing in Kansas City, Kansas. HUD was concerned that Milestone had not complied with cash management requirements. Our audit objective was to determine whether Milestone complied with HUD’s cash management…

We audited the U.S. Department of Housing and Urban Development’s (HUD) Office of Public Housing field office in Phoenix, Arizona (Public Housing). The objective of the audit was to determine whether Public Housing’s procedures for monitoring the Nogales Housing Authority (Authority) were effective. The audit was started because Public Housing performed several monitoring reviews at the Authority; however, there were indications that some of…

The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General audited the HOME Investment Partnerships (HOME) program of the City of Kansas City, Kansas (City). Our objective was to determine whether the City followed HUD requirements when establishing and managing HOME projects. We concluded that the City did not obtain adequate environmental reviews, improperly awarded HOME construction projects, improperly charged…

We performed a corrective action verification of HUD's actions in implementing recommendation 1F from our audit of the Housing Authority of Maricopa County's Mixed Finance Development Activities (Rose Terrace and Maricopa Revitalization), Audit Report 2005-LA-1002, issued March 14, 2005. The purpose of the corrective action verification was to determine whether HUD officials appropriately closed audit recommendation 1F in accordance…

We audited Campaige Place at Jackson (Campaige Place) to determine whether it used its project funds in compliance with the U.S. Department of Housing and Urban Development’s (HUD) regulatory agreement and other federal requirements. Campaige Place did not use its project funds in compliance with HUD’s and other federal requirements. Specifically, we determined that: •Owner advances of $73,750 were repaid when the project had no surplus cash…