Budget Amendment ID: FY2012-S3-66-R1

Redraft LOC 66

Audit of 40B Projects

Messrs. Hedlund, Ross, Tarr and Knapik moved that the proposed new text be amended by inserting after section xx the following new section:

SECTION X. The inspector general in consultation with the attorney general may enter into a contract with a third party for the purposes of auditing all affordable housing projects’ cost certifications submitted after January 1, 2004 that were built through the comprehensive permit process as outlined in sections 20 to 23, inclusive, of chapter 40B of the General Laws and received a determination of project eligibility after July 30, 2002. The third party shall be hired through a competitive bidding process and be a certified public accountant licensed and in good standing with the commonwealth and meet minimum professional qualifications as determined by the inspector general.

All audits performed through this section shall be conducted in accordance with the American Institute of Certified Public Accountants auditing standards; provided, however, in the event of any conflict between the American Institute of Certified Public Accountants standards and housing policy guidance or regulation issued by the department of housing and community development or any subsidizing agency on or after November 30, 2006 such policy guidance or regulation shall control. The audits performed under this section may include, but not be limited to, a review of the submitted cost certification, agreements between the developer and the municipality,, purchase and sales agreements, any and all documentation relating to the real estate appraisal of the relevant property or properties in accordance with the applicable rules that were in place at the time that the cost certification occurred, all reported expenses and revenues, and all public documentation relating to the purchase, sale or lease of all constructed units.

At the request of the third party, the inspector general may summons the production of all records, reports, audits, reviews, papers, books, documents, recommendations, correspondence and any other data and material relevant to any matter under audit or investigation, in accordance with section 9 of chapter 12A of the General Laws.

The findings of every audit, including any evidence of illegal or fraudulent activities, or cases where the actual realized profit of an individual project exceeds 20 per cent, shall be presented immediately upon completion to the inspector general, the attorney general and the department of housing and community development for review. The inspector general may take whatever further action deemed necessary, in accordance with section 10 of said chapter 12A.

It shall be the responsibility of the attorney general to recover all monies owed to the host communities.  The third party hired to conduct the initial audit may receive a pre-determined percentage of all recovered monies, not to exceed 5 per cent, with the balance being returned to the host community.