Report 2014-037 Recommendation 1 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 #1 To: Housing and Community Development, Department of

To ensure that it complies with state law and maximizes the public benefits that its Multifamily Housing Program provides, HCD should improve its current process for awarding program funds by documenting its determination of whether the costs of proposed projects are reasonable.

6-Month Agency Response

The HCD Division of Financial Assistance (DFA) has revised the Notices of Funding Availability (NOFA) "Projects with Extraordinary High Development Costs" section to be more specific regarding the supportive documentation, analysis, and approval process to determine if proposed project costs are reasonable (See Attachment AF1a - highlighted text). An internal Management Memo has been approved and implemented memorializing the review, analysis, and documentation process (Attachment AF1b).

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The HCD Division of Financial Assistance (DFA) staff and management are currently evaluating and drafting language to include in the Staff Recommendation Report that is submitted as part of the project review process. The language will be more specific regarding the analysis and approval process to determine if proposed project costs are reasonable.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2014-037

Agency responses received are posted verbatim.