To ensure that recipients submit required status reports, HCD should develop and implement strategies to better monitor these reports. For example, program management could review a central tracking spreadsheet of status reports and require staff to contact recipients that are not complying with requirements. After six months of noncompliance by recipients, HCD should send warning letters to recipients that it will cancel their awards or seek remedies and require them to return the funds unless they provide the reports within a specified time.
The Local Housing Trust Fund Program standard agreement includes a change that once the Contractor is awarded, they must submit annual status reports to HCD, even prior to the disbursement of funds. This satisfies the CSA request to require "some reporting before the initial disbursement request." For the SERNA program, a policy document is provided to show what is required for past due monitoring reports. Both issues are resolved and implemented.
The DFA BEGIN program developed a formal reporting process, which is documented in the Desk Manual (Attachment AF4a-1, AF4a-2), and includes processes for collection, tracking, and follow up of reports.
CalHOME revised its Desk & Operations Manuals to include an improved reports collection process (Attachment AF4b-1, AF4b-2 red text), which includes processes for ensuring report collection and tracking, recipient correspondence documentation, and follow up for non-compliance.
Local Housing Trust Fund Program monitors the status of recipient activities via the LHTF Disbursement Request Form (Attachment AF4c-1). Recipients who have not requested a disbursement are not required to submit a status update since there are no changes to report. The status of LHTF disbursements/reporting is updated on Attachment AFc-2.
Serna - DFA management reviews the status of the CAPES Annual Reports and Operating Budget submission compliance monthly. (AF4d).
Although HCD provided support that it had modified its policies for the BEGIN and CalHome programs to address our concern, it did not do so for the Local Housing Trust Fund (LHTF) program or the Joe Serna, Jr. Farmworker Housing program. As we note in our report, the LHTF's policy of waiting for a recipient to request funds is insufficient for monitoring its awards because of the significant amount of time that may elapse between award of funds and a request for disbursement. Further, the documentation provided for the Farmworker Housing program shows only that HCD is tracking required reports; it does not indicate what HCD will do when recipients fail to submit required reports, as documentation HCD provided to us shows has already occurred.
DFA is evaluating and developing a centralized reporting process. One option currently under consideration is a report generated from HCD's internal database, CAPES. Consequences for recipients who do not comply are being reviewed on a program by program basis, taking into consideration the fact that existing programs do not have the same reporting requirements.
†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.
*Agency responses received after June 2013 are posted verbatim.