City of WillowsLocal Government

Name: Community Development Block Grant/State's Program and Non-Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2024/2025 Compliance Requirement: Special Tests and Provisions; Criteria: The City is required to monitor loan recipients annually for compliance requirements. Condition: The City did not perform the required monitoring. Cause: There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Compliance Report. Effect: The City was not incompliance with the CDBG loan requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: The CDBG loan monitoring report was unavailable. Repeat Finding: This is not a repeating finding. Recommendation: We recommend that the City develop procedures to ensure that the CDBG loan monitoring reports be completed. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.

Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition: During our test of loan monitoring procedures, we noted that all of the home loans tested did not include verification documentation regarding loan recipients were the home owners during the 2022-2023 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause: The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect: Documentation was not provided to verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding: This is a repeat of prior year finding 2022-001. Recommendation: We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.

Name: Community Development Block Grant/State's Program and Non-Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass-Through: State Department of Housing and Community Development Award No.: Various Year: 2022/2023 Compliance Requirement: Program Income Criteria: The CDBG Annual Performance Report was required to be filed with the State Department of Housing and Community Development by September 30, 2023. Condition: The City has not filed the CDBG Annual Performance Report by the required date. Cause: There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Performance Report to ensure that it was filed by the required due date. Effect: The City did not file the CDBG Annual Performance Report by the required due date. Questioned Costs: No questioned costs were identified as a result of our procedures. Context: The CDBG Annual Performance Report was unavailable for review. Repeat Finding: This is a repeat of prior year finding 2022-002. Recommendation: We recommend that the City develop procedures to ensure that the CDBG Annual Performance Report is filed by the required due date. Views of Responsible Officials and Planned Corrective Action: Refer to separate Management's Corrective Action Plan for views of responsible officials and management's responses.

2022-001 Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the home owners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect Documentation was not provided to verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding This is a repeat of prior year finding 2021-001. Recommendation We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action Refer to separate Management?s Corrective Action Plan for views of responsible officials and management?s responses.

2022-002 Name: Community Development Block Grant/State?s Program and Non- Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2021/2022 Compliance Requirement: Program Income Criteria The CDBG Annual Performance Report was required to be filed with the State Department of Housing and Community Development by August 2, 2022. Condition The City had not filed the CDBG Annual Performance Report, including Attachment A ? Program Income, by the required date. Cause There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Performance Report to ensure that it was filed by the required due date. Effect The City did not file the CDBG Annual Performance Report by the required due date. Questioned Cost No questioned costs were identified as a result of our procedures. Context The CDBG Annual Performance Report was unavailable for review. Repeat Finding This is a repeat of prior year finding 2021-002. Recommendation We recommend that the City develop procedures to ensure that the CDBG Annual Performance Report is filed by the required due date. Views of Responsible Officials and Planned Corrective Action Refer to separate Management?s Corrective Action Plan for views of responsible officials and management?s responses.

Name: Home Investment Partnership Program CFDA #: 14.239 Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2020/2021 Compliance Requirement: Program Income Criteria The loan documents require that recipients of HOME loans continue to own and reside in their homes that were acquired using HOME funding. Condition During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the home owners during the 2020-2021 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with HOME funding was missing. Cause The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements. Effect We could not verify that the loan recipients were in compliance with the requirements of their loan agreements. Questioned Cost No questioned costs were identified as a result of our procedures. Context We randomly selected one of the two HOME loan recipients to test loan monitoring procedures. Sampling was a statistically valid sample. We noted that the recipient was not in compliance with the HOME loan agreements. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis. Views of Responsible Officials and Planned Corrective Action Refer to separate Management?s Corrective Action Plan for views of responsible officials and management?s responses.

Name: Community Development Block Grant/State?s Program and Non- Entitlement Grants in Hawaii CFDA #: 14.228 Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various Year: 2020/2021 Compliance Requirement: Program Income Criteria The CDBG Annual Performance Report was required to be filed with the State Department of Housing and Community Development by August 2, 2021. Condition The City had not filed the CDBG Annual Performance Report, including Attachment A ? Program Income, by the required date. Cause There was not adequate monitoring of CDBG filing requirements related to the CDBG Annual Performance Report to ensure that it was filed by the required due date. Effect The City did not file the CDBG Annual Performance Report by the required due date. Questioned Cost No questioned costs were identified as a result of our procedures. Context The CDBG Annual Performance Report was unavailable for review. Repeat Finding This is not a repeat finding. Recommendation We recommend that the City develop procedures to ensure that the CDBG Annual Performance Report is filed by the required due date. Views of Responsible Officials and Planned Corrective Action Refer to separate Management?s Corrective Action Plan for views of responsible officials and management?s responses.