The findings and others were included in a financial audit report of the Executive Department for fiscal year 2022 produced by the Louisiana Legislative Auditor’s office last week.
The Division of Administration’s Louisiana Office of Community Development identified $2,635,609 in Small Rental Property Program loans for nine property owners under the Community Development Block Grant program who failed to comply with loan requirements and were sent to recovery.
“As of June 30, 2022, of the 4,480 outstanding SRPP loans totaling $436.3 million, 993 noncompliant loans totaling $92.4 million are in active recovery status, and LOCD represented that current recovery efforts are to either recoup the loan funds or work with the applicants to bring them into compliance with the state’s continuing requirements for the program,” the report read.
“The remaining 163 noncompliant loans totaling $14.7 million have been determined by LOCD to be uncollectable for various reasons such as foreclosure, property seizure, or legal dispute.”
LOCD also identified $121,650 in noncompliant Restore Louisiana Homeowner Assistance Program awards for eight homeowners through its monitoring procedures that are considered questionable costs. That’s on top of 36 noncompliant files totaling $644,913 identified in previous years that remain outstanding.
“As of June 30, 2022, $666,587,500 in total RLHAP awards have been disbursed to 17,254 homeowners. LOCD is actively reviewing 38 files totaling $715,592 to make final determinations of the homeowner’s noncompliant status,” the LLA reports.
“At year-end, LOCD reported that 269 homeowner files totaling approximately $4.4 million have been reviewed through its monitoring procedures,” auditors wrote. “Of the 269 homeowners, LOCD reported 82 homeowners were placed in recapture status, 148 homeowners were cleared through the review process, 15 homeowners returned their grant award, in whole or in part, and 24 homeowners entered into repayment plans.”
Other issues uncovered in the audit include inadequate controls over financial reporting for the Office of Technology Services which resulted in about $25 million in payments that were incorrect, as well as leases that may not have been properly reported.
Various Division of Administration officials responded to the audit in letters to LLA Mike Waguespack between January and April that explained how they’re addressing the issues, from reforming the lease reporting process to fixing financial statements, to coordinated efforts with federal officials and Louisiana homeowners to recover loans or bring property owners into compliance.