The Office of the Commissioner for Municipal Affairs Needs To Make Improvements in Administering Its Section 108 Loan Guarantee Program

Date Issued

Thursday, December 4, 2014

Submitting OIG

Department of Housing and Urban Development OIG

Agencies Reviewed/Investigated

Department of Housing and Urban Development

Report Number

2015-AT-1001

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Hide this report from display

Yes

Open Recommendations

This report has 11 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
2015-AT-1001-001-A	No	$7,010,276	$0
Submit a plan for how it will proceed with respect to the Municipality of San Lorenzo activity center project, including a schedule that HUD can track to ensure its completion. HUD must reevaluate the feasibility of the activity and determine the eligibility of the $7,010,276 already invested.
2015-AT-1001-001-B	No	$7,369,000	$0
Submit a plan for how it will proceed with respect to the Municipality of Dorado hotel project, including a schedule that HUD can track to ensure its completion. HUD must reevaluate the feasibility of the activity and determine the eligibility of the $7,369,000 already invested. If HUD determines that the activity has been canceled or is not feasible, Municipal Affairs must mitigate activity losses by committing any unused loan proceeds for future loan repayments.
2015-AT-1001-001-C	No	$5,474,376	$0
Submit a plan for how it will proceed with respect to the Municipality of Camuy hotel project, including a schedule that HUD can track to ensure its completion. HUD must reevaluate the feasibility of the activity and determine the eligibility of the $5,474,376 already invested.
2015-AT-1001-001-D	No	$0	$0
Conduct monitoring of the Section 108 activities with signs of slow progress to ensure that program objectives are met and provide the intended benefits.
2015-AT-1001-002-A	No	$1,080,242	$0
Recover from the borrowers and reimburse $1,080,242 to the applicable loan guarantee account from non-Federal funds for ineligible disbursements that were not related to the approved projects and used to finance local government operations.
2015-AT-1001-002-C	No	$367,840	$0
Obtain and submit supporting documentation showing the eligibility and propriety of $367,840 in disbursements or reimburse the loan guarantee account from non-Federal funds.
2015-AT-1001-002-D	No	$0	$0
Ensure that the borrowers either transfer the unexpended Section 108 loan proceeds to the repayment account or submit a request for extension to HUD.
2015-AT-1001-002-E	No	$0	$0
Ensure that the borrowers provide HUD the additional security requirements according to the loan agreement.
2015-AT-1001-002-F	No	$0	$0
Ensure that borrowers develop and implement a financial management system in accordance with HUD requirements to ensure that program funds can be traced to a level that ensures that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes.
2015-AT-1001-002-G	No	$0	$0
Ensure that all Section 108 loan proceeds deposited at commercial banks are properly collateralized with Government obligations.
2015-AT-1001-002-H	No	$0	$0
Conduct monitoring reviews of all Section 108 projects and ensure that borrowers comply with all loan agreement provisions and HUD regulations.