Federal Reports

We identified a significant increase in the amount of funds drawn by HOME Investment Partnerships Program (HOME) and HOME American Rescue Plan (ARP) grantees near the time of the January 2025, hold in Federal funds, which increased the risk that the funds may have been drawn prematurely, without support, or used improperly.  Therefore, our audit objective was to identify if HOME and HOME ARP draws made near the time of the hold in federal funds were in accordance with program requirements.    

Out of eight grantees selected for review, two (New York City and the City of Anaheim) violated program requirements when they prematurely drew HOME and HOME ARP funds near the time of the hold in federal funds and made improper payments.  New York City and its subrecipient, the New York City Housing Authority (NYCHA), could not adequately support how $81.9 million in HOME ARP funds were used for a tenant arrears program, of which, over $6 million was used for ineligible tenants that were over the allowable income limit.  Both grantees drew a combined total of over $87 million in HOME and HOME ARP funds in advance of their immediate needs, in violation of program requirements.  Further, the City of Anaheim admitted to drawing an additional $404,630 in HOME and HOME ARP funds prematurely.  Both grantees earned interest income while holding the funds from their premature draws that they did not report to HUD and had not remitted to the U.S. Treasury.  Each grantee had different reasons for why these issues occurred including over-reliance on NYCHA, delays transferring and applying the funds, and concerns the hold in funds would jeopardize ongoing housing development.  The funds used for the ineligible tenants could have been used for other eligible and supported program activities to reduce homelessness and increase housing stability.  In addition, the combined premature draws of over $87 million misled HUD about the need for the funds and the resulting accumulated interest must be remitted to the U.S. Treasury.

We recommend that the Directors of HUD’s New York and Los Angeles Offices of Community Planning and Development, (1) require New York City to provide documentation to support its $81,913,050 draw of HOME ARP funds or repay its HOME Investment Trust Fund Treasury Account, (2) require both grantees to support the amount of interest earned while holding the funds and remit the funds to the U.S. Treasury, (3) review additional premature draws to determine eligibility, and (4) assess the adequacy of both grantees procedures and controls to ensure draws are made in accordance with program requirements.  We also recommend that HUD collaborate with its Office of Program Enforcement to consider potential administrative actions against both grantees for violating program requirements. 

During the week of January 5, 2026, we performed a self-initiated audit at the Shreveport Processing and Distribution Center (P&DC) and Package Support Annex (PSA), and three delivery units serviced by the P&DC and PSA. The delivery units included Huntington Station and Southfield Station in Shreveport, LA and Plantation Station in Bossier City, LA.  

We issued individual reports for the three delivery units and one report for the P&DC and PSA. We also issued another report summarizing the results of our audits at all three delivery units with specific recommendations for management to address.

Why We Did This Report

We visited the Wyckoff/Eagle Harbor Superfund site on Bainbridge Island, Washington, to observe the EPA’s management of public access to the site, including contaminated beaches. Through our visit, we aimed to determine whether we should conduct additional oversight. 

Summary of Findings

Prior to our visit we identified concerns about public access to the site, but during our visit we observed physical access controls and informational devices that should effectively limit public exposure to contaminants. Therefore, we do not anticipate conducting additional oversight at this time.