Report 2014-037 Recommendation 5 Responses

Report 2014-037: California Department of Housing and Community Development: Inconsistent Oversight Has Resulted in the Questionable Use of Some Housing Bond Funds (Release Date: September 2014)

Recommendation #5 To: Housing and Community Development, Department of

To ensure that recipients spend advanced funds promptly and that it has accurate information about outstanding advanced funds, HCD should do the following:

- Develop a thorough process to track and monitor advances.

Agency Response*

The DFA CalHome program has updated their desk manual (pg 55) to specifically require documented justification by senior management on waivers to the policy. Per CSA, this type of documentation would resolve their concern. This issue is fully implemented.

  • Response Type†: 1-Year
  • Completion Date: September 2015
  • Response Date: September 2015

California State Auditor's Assessment of Status: Fully Implemented


Agency Response*

DFA BEGIN updated the Desk Manual to include the policy and process for tracking fund advancements (Attachment AF5a, red text).

CalHome produced a Management Memo (AF5b-1) outlining its advanced funds policy. The memo was provided to all active award recipients. CalHome updated its desk manual with staff instructions on documenting draw requests (AF5b-2, red text).

  • Response Type†: 6-Month
  • Completion Date: February 2015
  • Response Date: March 2015

California State Auditor's Assessment of Status: Partially Implemented

Although HCD updated its policies to include a process to track and monitor advances for its BEGIN and CalHome programs, those policies allow the CalHome program manager to waive its advance policy at his or her discretion, increasing the risk that HCD will experience the same problems with advances we found in our report.


Agency Response*

DFA staff and management are currently evaluating the process to track advanced funds. The evaluation involves a more efficient coordination through the HCD Admin Division, to reconcile and improve accuracy of data and determine any amounts outstanding.

  • Response Type†: 60-Day
  • Estimated Completion Date: 3/15/2015
  • Response Date: November 2014

California State Auditor's Assessment of Status: Pending


All Recommendations in 2014-037

†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.


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