Mississippi Audit Reports
Issue Date: May 7, 2007
Report No.: 2007-AO-1001
File Size: 373.29KB
Title: The State of Mississippi�s Homeowner�s Assistance Grant
Program, Jackson, Mississippi, Did Not Appropriately Calculate Grants
and Monitor the Program
The U.S. Department of Housing and Urban Development�s (HUD) Office
of Inspector General audited the State of Mississippi�s (State)
calculation of homeowners� grant amounts and monitoring of the implementation
of its Homeowner�s Assistance Grant Program. Our audit was part
of the activities in our annual audit plan. Our objectives were
to determine whether the State appropriately calculated the homeowners�
grant amounts and monitored the implementation of its Homeowner�s
Assistance Grant Program.
The State did not appropriately calculate the homeowners� grant
amounts when it allowed its contractor, Reznick Group, to deduct
unnecessary costs such as unpaid state income taxes, state unemployment
taxes, and local ad valorem or property taxes from the homeowners�
grant amounts. These problems occurred because Reznick Group relied
on the delinquent taxes shown on the title reports provided by its
subcontractor and failed to confirm with state and local tax agencies
the total delinquent taxes owed by the homeowners. As a result,
the homeowners did not receive the maximum benefits from the program,
which was designed to assist them in rebuilding or repairing their
damaged homes. In addition, the homeowners with underpaid delinquent
taxes still do not have clear titles to their properties.
The State also did not monitor Reznick Group�s implementation of
its Homeowner�s Assistance Grant Program. This deficiency occurred
because the Mississippi Development Authority (Authority) did not
have adequate staff to perform the monitoring and had not established
its monitoring processes as required. The lack of monitoring may
potentially result in noncompliance with federal requirements such
as ineligible and/or unsupported program expenses being charged
against the 2006 Community Development Block Grant disaster recovery
We recommend that the U.S. Department of Housing and Urban Development�s
(HUD) general deputy assistant secretary for community planning
and development require the Authority to immediately (1) cease withholding
or deducting unnecessary tax debts from homeowners� grant amounts,
(2) recalculate the grant amounts for those homeowners who have
already received assistance and refund such homeowners a total of
$159,172 in state and/or local taxes inappropriately withheld or
deducted from their grants, and (3) confirm with state and local
tax agencies the delinquent taxes the homeowners owed such agencies.
We also recommend that the general deputy assistant secretary require
the Authority to immediately establish and implement monitoring
procedures and controls for the Homeowner�s Assistance Grant Program
to ensure that program requirements are met.
Issue Date: September 12, 2005
Report No.: 2005-FW-1014
File Size: 559.48KB
Title: Realty Mortgage Corporation, Nonsupervised Lender, Flowood,
We reviewed a Federal Housing Administration loan sponsored by
Realty Mortgage Corporation (Realty) of Flowood, Mississippi, that
was identified during our audit of a Federal Housing Administration-approved
loan correspondent as not being properly originated according to
U.S. Department of Housing and Urban Development (HUD) regulations.
Because the sponsor of the loan is ultimately responsible for loan
processing deficiencies, we addressed these deficiencies toRealty
to determine whether it complied with HUD requirements.
Realty did not comply with HUD regulations, procedures, and instructions
in the processing of a Federal Housing Administration-insured single-family
mortgage. Realty did not ensure the appraisal included an analysis
of the subject sales contract or list price. It also allowed the
loan correspondent to charge $1,277 in ineligible fees: a $400 processing
fee and $877 in unearned discount points. As a result, the risk
to HUD's insurance fund was increased, and the borrower incurred
excessive costs for the loan.
We recommend that the Assistant Secretary for Housing - Federal
Housing Commissioner take appropriate administrative action against
Realty, including, at a minimum, requiring reimbursement of the
$1,277 in ineligible fees to the appropriate parties.
Issue Date: March 5, 2004
Memorandum No.: 2004-AT-1802
File Size: 5.15MB
Subject: Saraland Manor Apartments
This memorandum report presents the results of an Office of Inspector
General (OIG) inspection of the Saraland Manor Apartments, 8010
Highway 49, Gulfport, Mississippi. Saraland is a multifamily apartment
project consisting of two 3-story buildings with 101 apartment units.
Saraland serves elderly and handicapped residents, and 100 percent
of the apartments are Section 8 subsidized. The OIG conducted a
physical inspection of the project in response to a complaint of
declining and substandard living conditions that was forwarded to
OIG by Senator Trent Lott.
Our inspection identified numerous deficiencies in building exteriors,
common areas, and in 32 apartments. Most of the deficiencies were
the result of the project's age and inadequate maintenance and repairs.
Numerous health (sanitation) and safety deficiencies identified
in the apartment units were not cited in the last Real Estate Assessment
Center (REAC) inspection. We concluded that the last REAC inspection
did not identify all significant health and safety deficiencies
and that the owner/management agent did not operate an adequate
OIG concurred with the management decisions taken or planned by
the HUD Jackson field office and the REAC in response to the report
Issue Date: February 18, 2004
Report No.: 2004-AT-1002
File Size: 1.5MB
Subjec t: Jackson State University Historically Black Colleges
and Universities Grant, Jackson, Mississippi
An OIG audit disclosed that Jackson State University's Historically
Black Colleges and Universities grants did not achieve the goal
of its Homeownership Program to increase homeownership opportunities
for low-and-moderate-income individuals in the area surrounding
the University. The University spent over $1.36 million or 60 percent
of its $2.26 million grants. Only 4 of the 30 houses proposed were
completely rehabilitated. The University did not perform adequate
analytical reviews to determine the feasibility to acquire and rehabilitate
the properties or the financial viability of proposed projects.
The University did not consider cost estimates or select the most
cost effective projects for acquisition and rehabilitation. As a
result, grant funds totaling $10,300 were ineligible and $129,683
were unsupported. HUD needs to recapture the fund balance of $898,235.
Further, The University's procurement practices did not comply with
Federal procurement and contracting requirements, or State requirements.
The University improperly procured $765,084 of goods and services
without adequately documenting the procurements, or having a contract
We recommend that HUD suspend disbursements and disallow the use
of grant funds until the University can demonstrate accountability
and compliance with the grant agreements. In addition, HUD should
require the University to reimburse ineligible costs of $10,300,
determine the eligibility of $894,767 in unsupported costs, and
recapture the remaining grant balance of $898,235.
Issue Date: July 3, 2002
Report No.: 2002-AT-1002
File Size: 1163 KB
Subject: Housing Authority of the City of Tupelo, Mississippi
In response to a request from the HUD Mississippi State Office
of Public Housing, we completed an audit of the Housing Authority
of the City of Tupelo's operations. We determined the Authority:
(1) improperly advanced over $1.4 million of public housing program
funds for non-Federal development activities; (2) did not maintain
its conventional low-income housing in good repair and condition;
(3) did not spend $293,544 of Comprehensive Grant Program funds,
as approved; (4) inappropriately pledged its assets as collateral
for loans totaling $1,148,029; and (5) did not adequately control
its appliance inventory. We recommended that Authority reimburse
the Comprehensive Grant Program for the ineligible and unsupported
costs; discontinue further advances; complete inspections and correct
all housing quality standard violations; pursue removal of the guaranty
for all loans; and reinstate its fixed assets inventory system.
We also recommend that HUD debar the former Executive Director.
Issue Date: August 27, 2001
Report No.: 2001-AT-1006
File Size: 919KB
Title: City of Hattiesburg, Mississippi, Community Planning and
Development Programs, Hattiesburg, Mississippi
An OIG audit of the City of Hattiesburg�s Community Planning and
Development Programs, which included the Community Development Block
Grant (CDBG) and Home Investment Partnership Programs, disclosed
that the City did not: (1) ensure funded activities met CDBG national
objectives; (2) properly administer its rehabilitation program;
(3) follow proper procurement and contracting procedures; (4) follow
proper payroll administration procedures; and (5) establish and
maintain basic operating systems for proper management of its CDBG
and Home Programs.
The audit recommended that HUD require the City to reimburse the
CDBG Program for all ineligible and unsupported costs, and develop
and implement controls and procedures to ensure to ensure proper
administration of its programs. Also, the City should correct all
deficiencies and Housing Quality Standard violations and submit
a corrective action plan to correct the deficiencies identified
by HUD during its reviews.
Issue Date: January 3, 2000
Report No.: 00-AT-204-1002
File Size: 1,385KB
Title: the HA of the City of Meridian, Audit of the Grant Programs,
We completed an audit of the Housing Authority of the City of
Meridian. Our audit objective was to determine whether the Authority
administered its grants in accordance with the Department of Housing
and Urban Development (HUD) requirements.
We focused our audit to evaluate the Authority�s controls and procedures
over its administration of its grants awarded for fiscal years 1994
through 1997. We also performed a limited review of the Authority�s
procurement activities. This report presents three findings that
detail the Authority�s need to improve in these areas. Also, the
findings show the Authority has taken proactive steps toward correcting
the cited deficiencies.
Issue Date: January 26, 1999
Report No. 99-AT-211-1003
File Size: 1,320KB
Title: Eastover Apartments, Multifamily Mortgagor Operations
We completed an audit of Eastover Apartments multifamily mortgagor
operations. We conducted the audit at the request of the Multifamily
Housing Division, Mississippi State Office. Our objectives were
to determine whether Eastover Apartments, Ltd. used project funds
in accordance with the Regulatory Agreement and in compliance with
the Department of Housing and Urban Development (HUD) requirements.
Eastover did not adequately manage the project's maintenance and
finances. Due to the mismanagement of the project's operations,
the project had deferred maintenance and needed improvements exceeding
$900,000. As a result, tenants were deprived of decent, safe, and
sanitary housing, and the value of the project used to secure the
mortgage has depreciated at an accelerated rate. In addition, excessive
Section 8 subsidies were paid by HUD. Therefore, tenants paid less
rent than required, while HUD paid increased subsidies.
Issue Date: June 1, 1998
Report No. 98-AT-211-1804
File Size: 68KB
Title: Willow Park, Ltd., Clarksdale, MS
The review disclosed excessive subsidy payments and a need for
the Mortgagor to address deferred maintenance.
The Mortgagor and its identity-of-interest management agent did
not exercise proper oversight of the certification and recertification
of Section 8 tenants. As a result, they failed to timely detect
noncompliances by their project manager with program requirements
for calculating HUD subsidy. We computed $40,817 in excessive subsidy
for a sample of five tenants. The excessive subsidy payments occurred
because tenant incomes used to calculate subsidies were understated.
Verifications of Employment (VOEs) contained incorrect employment
or income data or, in some cases, did not exist. The Mortgagor needs
to compute and refund to HUD overpaid subsidy, and implement controls
over project personnel.
The Mortgagor also needs to address deferred project maintenance
in order to provide tenants the quality housing intended by the
Section 8 Program and to protect HUD's interest in the insured mortgage.
Issue Date: September 17, 1997
Memorandum No. 97-AT-255-1818
File Size: 32KB
Title: State of MS HOME Prog., Jackson, MS
Two DECD managers responsible for awarding HOME funds purchased
vehicles from an automobile dealership which has an identity-of-interest
with a HOME developer. Although DECD had no direct dealings with
the developer, and we found no evidence of actual wrongdoing, questions
of favoritism and gratuities were raised after the vehicle purchases.
The State of Mississippi requires employees to avoid conduct which
creates public suspicion or mistrust. DECD needs to develop guidelines
and policies to help prevent such allegations in the future.
DECD does not perform adequate analytical reviews of the financial
viability of proposed HOME projects. As a result, it cannot conclude
with reasonable certainty that the proposed project will be financially
sound and thus able to provide affordable housing for the required
period of time. DECD recognized the weakness and sought to add an
underwriter to its staff; however, budget restraints hindered those
Issue Date: February 10, 1997
File Size: 24KB
Title: Holiday Apartments/Midland Management CO.
The management agent made distributions totaling $145,840 of project
funds which, in our opinion, were not evidenced as necessary for
reasonable operating and maintenance expenses of the same project.
Project Continued To Need Physical Improvements.
While improvements were being made, the physical condition of
Holiday Apartments remained below average due to many uncorrected
Issue Date: January 27, 1997
Case Number 97-AT-241-1002
File Size: 126KB
Title: City of Gulfport, MS
As you requested, we completed an audit of the City of Gulfport,
Mississippi's CDBG Program. The report presents the focus of our
review along with findings that detail significant program deficiencies
and recommended corrective actions.
Issue Date: June 21, 1996
File Size: 38KB
Title: Broadmeadow Apts, Jackson, MS
Our survey showed that the owners had taken unauthorized distributions
in 1994 while the property was experiencing significant maintenance
deficiencies. By the close of our on-site survey in March 1996,
the owners had repaid the $69,475 in distributions made. The units,
however, continued to show evidence of poor maintenance. Consequently,
vacant units were not being promptly rented, and housing assistance
payments were being withheld by the Mississippi Regional Housing
Authority adding to the financial strain on the complex. If this
MA cannot be compelled to repair and properly maintain this project,
we are recommending that you take action to replace it.
Content Archived: September 10, 2010