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HomeMy WebLinkAboutIR 8580 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8580 ,, Trir Date: 03/11/04 r To the Mayor and Members of the City Council Page 1 of 3 x SUBJECT: Update on Progress Responding to HUD Audits Letters On February 10, 2004, staff provided the City Council with copies of the HUD audit review letters received by the City that were the subject of an article that appeared in the Star-Telegram on February 2, 2004. Since the release of those review letters to the City Council, the City has received additional audit letters from HUD and has responded to a number of the findings contained in the audit review letters received to date. Specifically the City has received the following audit review letters from HUD: September 30, 2003 — HUD response to Affordable Housing Monitoring letter December 11, 2003— Annual Community Assessment for the 2002 Program Year December 19, 2003 — Financial Monitoring of the CDBG Program December 23, 2003 — Real Property Acquisition and Relocation Procedures January 8, 2004 — Single Audit Report FY ending September 30, 2002 February 2, 2004 - Monitoring of Environmental Procedures CDBG and HOME programs February 18, 2004 — HUD response to Single Audit Report FY ending September 30, 2001 As outlined in the February 10, 2004, a staff working group was established to respond to the various findings contained in the audit review letters. Over the last few weeks the staff has been meeting and devoting a number of work hours responding to the HUD findings. The information below will give an overview of the status of the findings that we have addressed per each letter. The HUD letter dated September 30, 2003 was HUD's response to the documentation provided by city staff on June 30, 2003. This letter is specific to the implementation of Affordable Housing when utilizing CDBG and HOME funds. It contained thirteen (13) findings. In June we responded to all thirteen findings and three were cleared. The September letter notified us of the need for additional information in order to clear the remaining findings. This information included a request of the city to identify all homebuyers assisted during a two year period, beginning July 1, 2001 to the present and inspect their properties and determine if the structures were in full compliance with local standards before closing. Staff remains concerned about this specific finding and is working with HUD on a reasonable process to clear this finding. On February 9, 2004 a response to the remaining ten findings was submitted to HUD and we are awaiting further review by HUD. We expect additional communication on the City's response within the next 30 t0 45 days. The HUD letter dated December 11, 2003 was specific to the overall annual performance of the City. While this letter highlights the accomplishments made in using federal funds and notates that the city is making progress in meeting the statutory goals of the Consolidated Plan, it also detailed nine areas needing improvement. On January 12, 2004 a response was submitted to HUD that addressed all nine areas. Based on the response provided, HUD has indicated that some areas are still being reviewed and will be addressed under separate cover. ­,The HUD letter dated December 19, 2003 was specific to the Financial Management of the grant funds ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8580 'rro Date: 03/11/04 r To the Mayor and Members of the City Council Page 2 of 3 x yarn SUBJECT: Update on Progress Responding to HUD Audits Letters It contained seven (7) findings. Two of the seven findings have multiple parts. As of today, of the seven findings, we have responded to 4 complete findings and parts of 2 others and 1 is totally incomplete. We have asked for additional time to respond to the remaining items and anticipate completing a response to all items by the end of March. The findings outstanding are related to Cash Transaction Reports and Program Income and Accounting is completing the reconciliation of this information. Within the Financial Management review letter, two findings asked for adequate documentation in support of $852,010.71 and $356,180.83. On February 12, 2004, the City provided the documentation to clear these findings with exception of $961.70 that staff agreed were not allowable under the grant. We are awaiting further review by HUD of our submittal and expect additional communication on the City's response within the next 30 to 45 days. The HUD letter dated December 23, 2004 was specific to Acquisition and Relocation of the Evans and Rosedale project. It contained eleven (11) findings and we have responded to 5 out of the 11 findings. The staff is doing a full review of the documentation related to the acquisition of the properties in the Evans and Rosedale project and expects to finish a response to all findings within the next 30 days. This audit review letter contained one specific finding related to excessive payments and requests that the City pay back $498,650 to the City's CDBG account. The staff is still accumulating the necessary documentation to respond to this finding and hopefully to avoid a reimbursement of any funds. The HUD letter dated January 8, 2004 was specific to the Single Audit Report for FY ending September 30, 2002. The report contained seven (7) findings. Two of findings were included in the December 19, 2003 letter. As the final response to the December 19th letter is developed, these two findings will be addressed. The remaining five findings have been responded to and staff is awaiting a response from HUD. We anticipate a response within the next 30 to 45 days. On February 2, 2004, HUD issued a monitoring review letter regarding the City's environmental procedures, which includes historic review of projects using federal funds. Two findings were included in this letter and on March 3, 2004, the staff responded to this letter with sufficient information that we believe will clear these findings. On February 18, 2004, HUD issued a response to the Single Audit Report for FY ending September 30, 2001. This letter contained six (6) findings of which one was cleared, two are addressed in the December 19 and 23, 2003 letters. The remaining three are currently under review by staff. We expect to affirmatively respond to these findings within the next five to ten business days. As the Council has been previously briefed, HUD findings raised during their audits are part of the normal course of business in receiving federal grants from this agency. The process involves allowing the City to respond to the findings contained in the monitoring letters, HUD reviewing the response and requesting additional information if needed. Ultimately, this process could take months to complete full 'resolution of any and all findings. ISSUED BY THE CITY MANAGER FORT WORTH, "TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8580 .00T&% Date: 03/11/04 er I % To the Mayor and Members of the City Council Page 3 of 3 f&73 SUBJECT: Update on Progress Responding to HUD Audits Letters In the absence of any final resolution of the issues raised in the audit letters, it is the intent of the staff to keep you apprised of the progress of these audit reviews and our response to the audits as we move forward in the process. Should you have any questions, please feel free to call Joe Paniagua, Assistant City Manager at (817) 392-6191 or Deidra Emerson, Contract Manager, at (817) 392-7563. Ga acks W. �V. acks City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS