Results of Limited Scope Review at Housing Solutions for the Southwest, Inc.

We reviewed the financial condition of Housing Solutions for the Southwest, Inc. (HSSW), as part of a nationwide series of reviews of Community Action Agencies that have received funding under the American Recovery and Reinvestment Act of 2009.

Based on our assessment, we believe that HSSW is financially viable and has the capacity to manage and account for Federal funds and to operate its Community Services Block Grant (CSBG) program in accordance with Federal regulations. However, we noted weaknesses related to the financial management system, allowability of costs, safeguarding of Federal funds, composition of the Board of Directors, data quality and reporting, policies and procedures, and the whistleblower process.

We recommended that the Administration for Children and Families (ACF) consider the information presented in this report in assessing HSSW's ability to operate the CSBG program in accordance with Federal regulations. HSSW did not concur with two of our three findings related to the financial management system; partially concurred with our findings related to allowability of costs and policies and procedures; did not concur with our finding related to safeguarding of Federal funds; and concurred with our findings related to the composition of the Board of Directors, data quality and reporting, and the whistleblower process. HSSW also provided information as to corrective actions it has taken since our review, as well as additional information related to some of our findings. We revised the applicable portion of our allowability-of-costs finding to reflect independent management of the HSSW-owned housing development. Otherwise, nothing in HSSW's comments caused us to change our findings or our recommendation to ACF.