Issue Date: September 21, 2010
ACORN Housing Corporation, Inc., Evaluation of HUD Housing Counseling Grant Expenditures
In response to a congressional request, we performed an evaluation of grant funds awarded under HUD's Housing Counseling Program to ACORN Housing Corporation, Inc. (AHC), now operating as Affordable Housing Centers of America (AHCOA). We wanted to know whether AHC used its fiscal years 2008 and 2009 HUD grant funds totaling $3,252,399 in compliance with grant agreement requirements. Our tests focused on HUD funds used to pay the salary and fringe benefit costs (salary expenses) of AHC staff that provided housing counseling directly to clients. More than $2.544 million was charge to the HUD grants as salary expenses ($1.353 million or 83 percent in FY 2008 and $1.191 million or 73 percent in FY 2009).
Salary expenses charged by AHC to the HUD housing counseling grants were not fully supported. Payroll records requested did not comply with OMB Circular A-122, for example, time sheets did not distribute hours by grant. Further, the caseload allocation method used by AHC to determine the amount of HUD-chargeable salary expenses was problematic and unsupported. Consequently, HUD had no assurance that the counselors' salary expenses charged to the HUD grants reflected grant-eligible services. Also, ineligible salary expenses totaling $65,548.37 were charged to the FY 2009 HUD grant, and Federal procurement standards at 24 CFR Part 84 which requires "open and free" competition was not met.
OIG recommended that HUD's Office of Single Family Housing, Program Support Division, require AHCOA to reimburse the program for unsupported and ineligible salary expenses charged to the HUD housing counseling grants and implement a time and activities system that meets OMB Circular A-122 requirements. Further, AHCOA needs to implement a procurement system that complies with 24 CFR Part 84. We also recommended that Single Family's Program Support Division consider placing AHCOA in "inactive" status while it initiates corrective actions to address the exceptions and recommendations in the report and provide AHCOA with technical guidance and assistance as needed. (I&E Report: IED-10-002)