Media Kit: PennHOMES Program Audit Finds Inconsistent Record-Keeping
On February 11, Auditor General Timothy L. DeFoor released a performance audit of the Pennsylvania Housing Finance Agency’s (PHFA) PennHomes program, issuing two findings related to inconsistencies with record-keeping and making 24 recommendations for improvement.
“This audit is another example of why efficient and effective recordkeeping is essential when spending public funds,” Auditor General DeFoor said. “We found that while there weren’t issues with PHFA’s application process for PennHOMES, the agency didn’t keep important decision-making documents. We also found that PHFA was inconsistent when it came to keeping records for monitoring PennHOMES-funded properties.”
Read the rest of the press release.
Audit
We audited the Pennsylvania Housing Finance Agency’s (PHFA) PennHOMES program to look at their processes and procedures when awarding funds, and ensure PHFA’s monitoring processes complied with appropriate policies and procedures.
The audit period was July 1, 2022 through September 30, 2024.
Objectives of the Audit
The audit had two objectives:
- Assess PHFA’s process for reviewing developers’ applications and awarding of PennHOMES program funds to ensure compliance with any applicable statutes, regulations, executive orders, contractual agreements, guidelines, policies, and procedures.
- Assess PHFA’s process for monitoring units with PennHOMES program funding for compliance with any applicable statutes, regulations, executive orders, contractual requirements, guidelines, policies, and procedures regarding rent restrictions and income qualifications.
Audit Findings
The audit had two findings and 24 recommendations:
- Although audit procedures did not find issues with applicants awarded PennHOMES funds, issues were found related to the lack of written documentation supporting the review and award process.
- PHFA did not consistently perform, review, and adequately document monitoring of PennHOMES funded properties.
Read the audit’s Executive Summary for more information on our findings.
Answers to FAQs
The Pennsylvania Housing Finance Agency (PHFA) is a state-affiliated agency providing financing to develop housing for low-income and moderate-income families and affordable homeownership and rental opportunities for older adults and people with special housing needs. It also creates and administers various homeownership programs and multifamily rental housing development programs.
One of PHFA’s programs is PennHOMES, offering 0% interest, deferred payment loans to developers to build lower income rental housing. This funding comes from PHFA’s unrestricted reserves and federal HOME Investment Partnerships Program funds.
What did the audit look at?
The audit had two objectives. First assess whether PHFA’s process for reviewing developers’ applications and awarding funds complied with laws, regulations, contracts, policies and procedures. Second assess PHFA’s process for monitoring housing with PennHOMES funding to ensure they complied with guidelines, policies and procedures regarding rent restrictions and income qualifications.
What did the audit find?
The auditors have two findings for this audit. First, they found PHFA did not always have the correct documentation to support the review and award process for applicants. Secondly, they found that PHFA did not consistently perform, review and document monitoring of PennHOMES-funded properties.
How can PHFA fix these issues?
The auditors made 24 recommendations for PHFA, including implementing and revising its policies and procedures when it comes to document retention, record keeping and the application review process. Auditors also recommended implementing supervisory reviews of all monitoring procedures performed by PHFA staff to help ensure all work is being performed properly and accurately and is being documented.
What is a performance audit?
A performance audit looks at whether state-funded programs and activities are meeting their goals and objectives, and if tax dollars are being spent efficiently and effectively.
Where can I find more information?
Learn more about this audit and the types of audits we perform on the Be Audit Smart section of our website.
Download these Answers to FAQs as a PDF.
Resources
Press Release: Read the official press release announcing this audit.
Audit: Download a copy of the audit.
Fact Sheet: Download a list of answers to FAQs.
Infographic: Download an infographic that summarizes the audit.
Contact
April Hutcheson, Director of Communications at the Pennsylvania Department of the Auditor General: 717-787-1381 or news@paauditor.gov