Develop and implement an indirect cost allocation plan, which ensures that indirect costs are charged to the correct program.

Provide technical assistance to the Community to ensure that its staff receives training on documentation of matching contributions and the use of program funds.

Reclassify the $28,576 as program income to the specific permanent supportive housing program that generated it and ensure these funds are used for that specific program.

Develop and implement written policies and procedures to ensure that all program income is recorded and used in accordance with HUD requirements.

Support that $2,687 in payments to the board member for legal services was allowed through a HUD-approved waiver that occurred before the legal services or repay HUD from non-Federal funds.

Work with the City of Denver Office of Economic Development to recapture $37,000 in HOME funds not properly used for the affordable housing projects.

Require Del Norte to develop policies and procedures to prevent ineligible affordability period transfers.

We recommend that the Director of the Office of Block Grant Assistance require the Texas General Land Office to implement appropriate cost controls, including limits for reconstruction and rehabilitation costs, to ensure that it uses limited government resources in a more economical and efficient manner. Those costs should not exceed the costs that would be incurred by a prudent person under similar circumstances.

We recommend that the Director of the Office of Block Grant Assistance require the Texas General Land Office to evaluate whether its programs would benefit from a longer affordability period and take appropriate actions to ensure that low- and moderate-income communities have access to affordable homes for an adequate period.

We recommend that the Director of the Office of Block Grant Assistance require the Texas General Land Office to ensure that the tax burden implications are a part of the determination of whether to spend significantly more than the damaged home’s appraised value to replace the home. This measure would include ensuring that participants are fully informed of the substantial and material property tax consequences that they could incur based on the increased values of their reconstructed homes (appendix B).

Develop and implement a financial management system in accordance with HUD requirements, including but not limited to permitting the disbursement of funds in a timely manner.

Ensure that $1,045,085 in CDBG funds drawn from HUD between July 1, 2015, and October 31, 2018, can be traced to a level, which ensures that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes, or reimburse the CDBG program from non-Federal funds. Footnote 2: Total drawdowns of more than $1.5 million were adjusted to consider $106 questioned in recommendation 1D and $469,974 in recommendation 2A.

Require the Municipality to return to its line of credit and put to better use $1,641 associated with the unspent program funds that have been carried over since December 2017.

Reimburse the CDBG program from non-Federal funds the $106 paid for ineligible bank penalties.

Establish and implement adequate controls and procedures to permit proper accountability for all CDBG funds to ensure that they are used solely for authorized purposes and properly safeguarded.

Submit supporting documentation showing how $469,974 in CDBG funds disbursed for street improvements was properly used and in accordance with HUD requirements or reimburse the CDBG program from non-Federal funds.

Determine the amount spent for the resurfacing of the 16 private properties identified and reimburse the CDBG program from non-Federal funds.

Establish and implement adequate policies and procedures, including project inspection protocols, to ensure that CDBG funds are used for activities that meet a national objective, are used for eligible purposes, and are properly supported.

Repay from non-Federal funds the $665,920 in ineligible costs charged to the program

Support that 14 projects, with $494,517 in construction costs, met the environmental review requirements and repay from non-Federal funds any amounts attributed to projects that cannot be certified.