City of Indianapolis

Federal Program Name: Home Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development CFDA Title and Number: HOME Investment Partnerships Program, CFDA 14.239 Criteria or Specific Requirement: Special Tests and Provisions ? Housing Quality Standards. Title 24, Part 92 requires that the City ensure on-site inspections and financial oversight be completed during the period affordability to determine that the project meets certain property standards. Condition: On-site inspections and financial oversight were no appropriately completed during the period of affordability. (Material Weakness and Material Non-Compliance) Questioned Costs: No Context: During testing of rental properties 5 out of 9 selections resulted in errors. From a population of 57 rental properties, 9 were selected for testing. Errors consisted of 5 rental properties wherein no on-site inspections or financial monitoring was completed. Our sample was not, and was not intended to be, statistically valid. Effect: Quality housing standards of rental properties could not be verified to ensure compliance with HOME requirements. Cause: The property manager of the rental units failed to provide their required recertifications to the City, which is the initial step in scheduling an on-site visit. In addition, the property manager is unresponsive, and the City has therefore not been able to perform the necessary oversight. Repeat Finding: No Recommendation: HOME Grant Department should establish a process to perform on-site visits in the event that it is unable to contact the property manager, to ensure ongoing compliance. Views of Responsible Officials and Planned Corrective Actions: Without a response from a property manager or owner, we do not have the authority to enter private property to conduct inspections. We are determining changes that could be made to our HOME Program Policies & Procedures Manual to be more specific about the requirement that property owners and property managers promptly notify HOME Grant Staff of any changes to contract information. In addition, with approval from the Office of Corporation Counsel, Policies and Procedures will be updated to reflect that non-compliance with Long-Term Affordability will result in non-payment or processing of contracts for current HOME agreements with the owner/developer. Person(s) responsible for implementing: Costin Ritter, HOME Grant Manager Implementation Date: December 31, 2020

Federal Program Name: HOME Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development CFDA Title and Number: Home Investment Partnerships Program, CFDA 14.239 Criteria or Specific Requirement: Subrecipient Monitoring. Title 24, Part 92 requires that the City perform risk assessments and/or on-site monitoring to ascertain whether subrecipients used Federal awards for authorized purposes and complied with Federal statutes, regulations, and the terms and conditions of the sub award. Condition: Risk assessments and on-site monitoring were not appropriately completed during the year. (Material Weakness and Material Non-Compliance) Questioned Costs: No Context: During subrecipient monitoring testing 2 out of 2 selections resulted in errors. From a population of 10 subrecipients, 2 were selected for testing. Errors consisted of 2 subrecipients wherein no risk assessments or on-site monitoring completed. Our sample was not, and was not intended to be, statistically valid. Effect: Appropriate use of funds for authorized purposes and compliance with Federal statutes, regulations, and the terms and condition of the sub award could not be verified to ensure compliance with HOME requirements. Cause: Risk assessments and on-site monitoring was not performed in the current year due to staff turn-over and limited resources. Repeat Finding: No Recommendation: HOME Grant Department should establish a process to perform risk assessments and on-site monitoring to ensure subrecipient compliance with Federal requirements and the terms and conditions of the sub award. Views of Responsible Officials and Planned Corrective Actions: The Department of Metropolitan Development has written policies and procedures that require staff to perform annual risk assessments for all project sponsors/subrecipients. In addition, the written policies specify that the risk analysis will determine which projects will require an onsite visit and/or in-depth file review. Due to staff turn-over, this written policy was not followed in 2019. The HOME Team is fully staffed and has the capacity to comply with the written policies in future years. Person(s) responsible for implementing: Costin Ritter, HOME Grant Manager Implementation Date: March 31, 2021