Sneak Preview: HUD Updates IHBG Program Investment Policy

(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Housing and Urban Development (HUD) has revised its previously outdated self-monitoring guidebook for recipients of Indian Housing Block Grant (IHBG) awards, requiring these grantees to develop an investment policy that ensures that invested IHBG funds are held in accounts separate from the recipient’s other grant funds, in response to recommendations in a recent HUD Office of Inspector General (OIG) audit.

The IHBG program provides funding for affordable housing activities on Indian reservations and areas. For federal fiscal year (FY) 2015 to FY 2017, HUD awarded more than $408 million in IHBG funds to 371 recipients. Recipients must submit to HUD an annual Indian housing plan, and an annual performance report on meeting the goals and objectives in their housing plan. Further, IHBG recipients may also use program funds for affordable housing activities in the form of investment securities and other obligations. HUD must approve the request to invest, and recipients can do so as long as they continue to demonstrate their administrative capacity to HUD.

IHBG recipients must use HUD’s required depository agreement to begin investing program funds for bank accounts or for brokers and dealers. These agreements ensure that grantees’ invested program funds are held in one or more accounts separate from the grantee’s other funds. These agreements ensure that program funds may be invested only in: (1) obligations of the U.S.; (2) obligations issued by U.S. government-sponsored agencies; (3) securities that are guaranteed or insured by the U.S.; or (4) mutual funds registered with the Securities and Exchange Commission.

In a recent audit of the IHBG program, OIG found that HUD generally ensured that grantees obligated, spent and invested program funds within HUD’s required time limits from FY 2015-2017. However, OIG concluded that two of the six IHBG grantees it reviewed did not maintain the required depository agreements to invest program funds in investment securities for use in carrying out affordable housing activities.

“We attributed this condition to a weakness in HUD’s internal control, which included relying on the grantees to maintain the required depository agreements,” OIG explained.

(The full version of this story has now been made available to all for a limited time here.)

As a reminder, our final Federal Funding Training Forum scheduled for 2018 will be Wednesday October 17 through Friday October 19 in Atlanta. Please let me know if you have questions or can make this forum. We hope to see you there!

http://www.federalgrantsforum.com/atlanta/index.html?src=EC

In addition, we are now offering a procurement boot camp Wednesday October 24 in Washington, D.C. Feel free to contact us if you are interested in this program!

http://www.thompsongrantsworkshop.com/dcprocurement2018/index.html