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Oregon Audit Reports

Issue Date: January 9, 2005
Audit Report No.: 2005-SE-1003
File Size: 449KB

Title: Oregon Housing and Community Services, Salem OR Non-Insured, Subsidized Multifamily Projects

We audited Oregon Housing and Community Services (Oregon Housing) as a followup to our recent audit of Uptown Towers Apartments, which found that, with Oregon Housing's approval, the owner and/or the management agent engaged in many practices HUD considers unallowable.

The overall audit objective was to determine whether Oregon Housing fulfilled its monitoring duties under the terms of the Annual Contributions Contract and Risk-Share Agreement and ensured that distributions of project funds conform to HUD requirements.

Issue Date: March 26, 2004
Audit Report No.: 2004-SE-1003
File Size: 1.62MB

Title: Uptown Towers Apartments, Portland, Oregon HAP Contract No. OR160039003 Master ACC Contract No. S-0029

We have completed an audit of Uptown Towers Apartments (Project), a HUD-subsidized project in Portland, Oregon. The purpose of our audit was to determine if:

� The Project owner received repayment of ineligible construction loans and capital contributions from Project funds;
� Commercial space income has been treated as Project income or owner's contribution;
� Commercial income has been paid out to the Project owner;
� The management agent has been receiving excessive management fees; and
� Certain Project expenses were eligible and benefited the Project.

Our audit found no repayments of construction loans. We determined that repayments of capital contributions from Project surplus cash to the owners were eligible. We also found that the Project's commercial income was properly treated as owner contributions or income, and that payments to the owner from the commercial income are allowable. However, the management agent received excessive management fees paid from residential income for the management of the Project's commercial income. Further, ineligible partnership expenses were paid from Project funds and some of those expenses were paid without supporting documents in sufficient detail to show whether they were partnership or Project expenses.

Issue Date: January 9, 2004
Audit Report No.: 2004-SE-1002
File Size: 3020KB

Title: Scheller Hess-Yoder and Associates Non-Supervised Loan Correspondent Portland, Oregon

We completed an audit of Scheller Hess-Yoder and Associates (SHYA), doing business as Advanced Mortgage Resources (AMR) in Portland, Oregon. The audit objectives were to determine if (1) SHYA acted in a prudent manner and complied with HUD regulations, procedures, and instructions in the origination of Federal Housing Administration (FHA) loans, and (2) SHYA's Quality Control Plan, as implemented, meets HUD requirements.

We found that SHYA disregarded HUD/FHA requirements and entered into agreements with outside contractors to act as independent branches or leased employees to originate FHA-insured loans. Further, SHYA did not adequately supervise the contractors' employees as required by HUD/FHA. Loan applications completed by the non-SHYA employees contained misleading certifications to HUD that full time SHYA employees processed the applications. HUD/FHA considers the practice of mortgagees using unauthorized branches and non-employees for the origination of insured loans a significant risk to the FHA insurance fund. We also found that SHYA disregarded HUD's quality control requirements and its own HUD-approved Quality Control Plan and allowed the person responsible for conducting SHYA's quality control reviews to also process and originate FHA-insured loans.

We are recommending that SHYA reimburse or indemnify HUD/FHA for the inappropriately originated loans. Also, HUD/FHA should consider seeking civil monetary penalties against Scheller Hess-Yoder and Associates, its unapproved branch offices, and its "leased employees" for submitting false certifications on the loan applications. We are further recommending that HUD/FHA determine whether Scheller Hess-Yoder and Associates' deficiencies in its loan origination activities warrant its removal from participation in HUD's Single Family Mortgage Insurance Programs.

Issue Date: October 31, 2002
Audit Memorandum No.2003-SE-1001
File Size: 263KB

Title: Congressionally Requested Audit of the Outreach and Training Assistance Grants (numbers FFOT98024OR and FFOT00032OR) and Intermediary Technical Assistance Grant (number MTMORPEG00019) awarded to the Community Alliance of Tenants, Portland, Oregon

The Community Alliance of Tenants (CAT) is the recipient of two OTAG grants totaling $410,000. Our audit found that CAT generally segregated its lobbying expenditures from the grants, but inadvertently charged $434 and other indeterminable costs to the OTAG grants for prohibited lobbying activities. In addition, CAT did not fully comply with the cost principles of Office of Management and Budget (OMB) Circular A-122 in its classification of direct and indirect costs, and other instances of non-compliance with A-122. As a result, CAT used grant funds for lobbying and other ineligible activities, and may have over or undercharged the OTAG grants for indirect costs. Also, the grants were charged $6,493 in ineligible and $45,751 in questionable direct and indirect expenses. Our report contains recommendations to address the issues identified in the report and other recommendations to strengthen management controls over the grants.

Issue Date: July 17, 1996
Audit Case Number 96-SE-212-1001
File Size: 61KB

Title: DB&B, Inc., Albany, Or

Based on the results of our audit, we concluded that DB&B, Inc., owner of Western Terrace and Colonial Court South Apartments, disregarded HUD requirements and instructions in order to save funds for prepayment of their HUD insured mortgages. As a result of DB&B, Inc.'s disregard for HUD requirements, residents lived in substandard conditions and $93,495 of HUD funds were used for ineligible or unsupported expenses.

Content Archived: September 10, 2010

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