HUD’s Office of Inspector General [1] (OIG) released the results of its audit of the City of New Orleans’ HOME Investment Partnerships program, which reveals that the city failed to protect more than $7.5 million in HOME funds disbursed.
The Inspector General's investigation of the low-income housing program was launched in response to a "citizen complaint." According to the audit report [2], the complaint had merit as New Orleans did not properly monitor or administer its HOME program.
The OIG discovered that for the 13 projects investigated, the city “did not ensure that four projects had regulatory agreements, preventing the city from enforcing the affordability and other program requirements.”
As for the remaining nine projects, the city failed to confirm that rents remained within rent limits, it performed initial tenant income eligibility certifications, and it conducted property inspections and onsite monitoring visits, according to the audit.
In addition, the audit noted that the city did not track or accurately report unit vacancies and properly report and use its program income. These conditions occurred because New Orleans did not, “follow the program requirements, lacked supervisory management of staff, did not have adequate written policies and procedures, and had poor record-keeping practices.”
This mismanagement of funds has caused the city to fail to detect $82,800 in rent overpayments; ensure that affordable housing was available and offered to low-income households, and ensure that programs participants lived in decent, safe, and sanitary housing, according to the report.
The OIG recommends that HUD's Director of the New Orleans Office of Community Planning and Development require the city to repay more than $1.8 million, support or repay more than $5.8 million, and revise its written procedures and management controls.