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September 30, 2009

DiNapoli: Affordable Housing Program Needs Improvement

Audit Finds Oversight Lapses in Selection and Award of Homebuyer Grants

The New York State Affordable Housing Corporation (AHC) should improve oversight of a grant program it manages to ensure only eligible individuals and families receive homebuyer grants to purchase homes, according to an audit State Comptroller Thomas P. DiNapoli released today.

“State agencies have to protect tax dollars,” DiNapoli said. “When unqualified recipients get grant money, worthy applicants lose out. Every dime counts, especially during times like these. We can’t afford to waste tax dollars on individuals who aren’t eligible for the program. AHC has to improve its oversight to make sure grant funds only go to qualified applicants.”

DiNapoli’s audit covered the period April 1, 2005 through May 31, 2008, during which time the AHC made $132 million in housing grants awarded for 6,948 housing units. DiNapoli’s auditors found that the New York Partnership Housing Development Fund Company (Partnership) handled $65.5 million, or 49.6 percent, of the grants awarded during this period. The audit focused on 70 grants awarded by Partnership at five projects in the Bronx, Brooklyn, and Manhattan.

DiNapoli’s audit team found that roughly 21 percent of the grant awards were questionable. Three of these grants, totaling $95,000, were awarded to applicants with incomes or assets above the maximum allowable under the program. One of those applicants was awarded a $25,000 grant to purchase an apartment in Central Harlem, even though the applicant had more than $240,000 in checking and savings accounts and had tax deductions for real estate tax and mortgage interest, indicating undisclosed property ownership. For the remaining 12 applicants, some of the documentation that was required to support their reported income and assets was not on file.

DiNapoli recommended that AHC:

  • Recover funds for grants to ineligible homebuyers;
  • Require its grantees to maintain sufficient documentation of grant recipient eligibility;
  • Ensure proper instructions are given to personnel who evaluate eligibility, and follow up to see that grant determinations are performed correctly;
  • Adequately document changes in allowable income or asset levels;
  • Clarify agreements related to preference targets; and,
  • Require grantees using random selection methods to retain documentation explaining grant recipient selection.

This audit is part of DiNapoli’s ongoing effort to ensure the appropriate use of tax dollars dedicated to affordable housing programs.

Click here for a copy of the audit.


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