Once a list of specific risk factors has been determined, HOME monitoring staff should decide which (if any) factors carry greater or lesser weight relative to the others. For example, is staff turnover in a program area comparatively equal to a large commitment of HOME funds?

Based on a consensus, weights should be assigned to each of the risk factors in the list. The weight assigned to any particular factor may change from year to year, or a risk factor may disappear entirely from the list. The weighted list should then be completed for each organization subject to monitoring by the PJ, using a scale from 1 (low risk) to 5 (high risk) to assign a risk rating for the organization on each factor.

The steps for using such a risk rating system are:

• Assign a risk rating to each risk factor.
• Multiply the risk rating by the factor's weight to get a factor score.
• Add the factor scores for all risk factors to get a total score for each organization.
• Rank the organizations by their total scores.

After selecting the organizations to receive on-site reviews, monitoring staff should then identify the program areas to examine during the review. Indicators for which the organization was rated as a high risk can be used to identify areas to review.

• Subrecipients that typically carry out several types of activities will generally need a thorough review of all aspects of these programs.
• In contrast, an experienced entity that is only operating a single-family home rehabilitation program, and has had no trouble since its last review, may only need a basic review to confirm that it is continuing to comply with HOME requirements.

Risk Analysis Example

A PJ partners with two CHDOs. While both CHDOs had satisfactory compliance with HOME regulations during the past program year, both have recently lost key staff people. However, CHDO #1 has already identified a highly skilled replacement, while CHDO #2 does not yet have a job description available.

The risk analysis might be:

• If staff turnover was the only pertinent risk factor, CHDO #2 would be a higher monitoring priority.