Business and Economic Development
An Audit Report on the Department of Housing and Community Affairs
December 2000
Report Number 01-009
Overall Conclusion
The Department of Housing and Community Affairs (Department) has significant weaknesses in contract management for two of the three programs included in our audit: the HOME Investment Partnership Program (HOME) and the Housing Trust Fund Program. These weaknesses hinder the Department's ability to ensure funds are awarded objectively and distributed in a timely manner to meet housing needs. We are reporting an audit scope limitation on the contract award process for HOME. Specifically, we could not assess the objectivity of the award process because unfunded applications for fiscal years 1995 to 1999 were unavailable.
Additionally, our audit of the Low Income Housing Tax Credit program indicated the Department does not have documentation to support that application fees are allocated only to cover processing costs as required by state law.
Furthermore, the Department has not developed a process to ensure that housing services are delivered to the areas of greatest need or priority as designated by state statutes and performance targets.
Key Facts and Findings
- HOME's contract database cannot provide current information on the status
of $12 million in unexpended balances for contracts that expired between 1997
and 2000. As a result, there is a risk that available funds are not re-obligated
in a timely manner to fund other projects that provide housing for citizens.
- The Department does not adequately consider alternative federal funding available when it conducts a needs assessment for housing in Texas. Between 1995 and 1999, 12 localities received $35.3 million (25 percent of the total five-year funding) in services funded by the Department's HOME program. For the same five-year period, these localities were awarded $164.9 million in HOME funds directly from the U.S. Department of Housing and Urban Development. Without including this data in the needs assessment, the Department cannot identify the areas of greatest need in the state or address gaps in funding for specific regions.
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