EIN: 876000266
UEI: EYDMXDL7KP25
Data as of August 27, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on April 25, 2021. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 25, 2021 (1767 days ago).
What is a management decision? →The City's internal review revealed that eight HOME projects were not in compliance with affordability requirements. Six of the projects had only received developer subsidies and two received a developer subsidy and homebuyer direct assistance. Cause: The City did not have the following mechanisms in place to ensure affordability periods were met: Adequate written agreements with developers or homebuyers that included recapture or resale provisions; Enforcement mechanisms attached to the homes such as deed restrictions or restrictive covenants, running with the land; and Internal policies and procedures on recapture and resale provisions. Effect: When recapture and resale provisions are not enforced, housing intended for low- and moderat-income (LMI) persons is made available to non-LMI persons who do not qualify for HOME-subsidized housing and/or HOME funds that are not recaptured cannot be used to serve other LMI persons through the HOME program. Recommendation: Management should improve written agreements with developers or homebuyers that include recapture or resale provisions; enforcement mechanisms attached to homes should be in place; and improve internal policies and procedures on recapture and resale provisions.
Show full finding ▾Hide full finding ▴2020-01: HUD Period of Availability. CFDA #14.239, HOME Investment Partnership Agreement. Context/Sampling: The U.S. Department of Housing and Urban Development (HUD), Region VIII, Office of Community Planning and Development (CPD) initiated a HOME affordability period desk review based on concerns that arose from conversations with the City of Provo (the City) about their HOME program. Developers who had received HOME funds for homeowner activities were requesting forgiveness of their loans, and upon study, it was discovered that the period of affordability for several of the projects was not met. In response, this Office requested the City conduct an internal review of all HOME projects with affordability periods still in progress and report on their compliance with affordability requirements. Repeat Finding from Prior Year(s): No. Questioned Costs: $591,049. FINDING #1: Affordability Period Noncompliance. Criteria: 24 CFR 92.254(4)&(5); CPD Notice 12-003. Condition: The City's internal review revealed that eight HOME projects were not in compliance with affordability requirements. Six of the projects had only received developer subsidies and two received a developer subsidy and homebuyer direct assistance. Cause: The City did not have the following mechanisms in place to ensure affordability periods were met: Adequate written agreements with developers or homebuyers that included recapture or resale provisions; Enforcement mechanisms attached to the homes such as deed restrictions or restrictive covenants, running with the land; and Internal policies and procedures on recapture and resale provisions. Effect: When recapture and resale provisions are not enforced, housing intended for low- and moderat-income (LMI) persons is made available to non-LMI persons who do not qualify for HOME-subsidized housing and/or HOME funds that are not recaptured cannot be used to serve other LMI persons through the HOME program. Recommendation: Management should improve written agreements with developers or homebuyers that include recapture or resale provisions; enforcement mechanisms attached to homes should be in place; and improve internal policies and procedures on recapture and resale provisions.
Planned Corrective Actions: Management has already taken, or plans to take, the following corrective actions: Agreements with developers and homebuyers have been updated and will be submitted to HUD for review. Policies were revised to clarify instances when a recapture or resale provision would be used. Policies also clarify developers' responsibilities to ensure adequate instruments are placed and enforced at the sale of property, specifically that: Resaile will be used when HOME dollars are used to subsidize land purchases or land improvements of affordable housing and no direct subsidy (down payment assistance, closing cost, or principal reduction) is received by the beneficiary. Recapture will be used when HOME dollars are used to provide direct subsidy to beneficiaries. Deed restrictions, restrictive agreements, and other instruments will be utilized to inform beneficiaries of their responsibilities and enforce the affordability period requirements. Procedures were revised to include extensive and detailed information on: How activities/transactions are logged into a spreadsheet including beneficiary's information, affordability provision used, amount of subsidy, and affordability period (based on dollar amount). Processes followed to perform annual audits to ensure beneficiaries are compliant with affordability periods. Actions taken when noncompliance is identified. Management will also engage with HUD to reach an agreement on restitution of funds that did not meet established requirements.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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