+-----------+----------------------+---------+----+------------------+
| **Guide   |                      |         |    |                  |
| for       |                      |         |    |                  |
| Review of |                      |         |    |                  |
| Fiscal    |                      |         |    |                  |
| Year (FY) |                      |         |    |                  |
| 1997      |                      |         |    |                  |
| Home      |                      |         |    |                  |
| ownership |                      |         |    |                  |
| Zones     |                      |         |    |                  |
| (HOZ)**   |                      |         |    |                  |
+-----------+----------------------+---------+----+------------------+
| **Name of |                      |         |    |                  |
| Program   |                      |         |    |                  |
| Parti     |                      |         |    |                  |
| cipant:** |                      |         |    |                  |
|           |                      |         |    |                  |
| **     ** |                      |         |    |                  |
+-----------+----------------------+---------+----+------------------+
| **Staff   |                      |         |    |                  |
| Con       |                      |         |    |                  |
| sulted:** |                      |         |    |                  |
|           |                      |         |    |                  |
| **     ** |                      |         |    |                  |
+-----------+----------------------+---------+----+------------------+
| **HOZ     |                      | **HOZ   |    |                  |
| Area:**   |                      | Grant   |    |                  |
|           |                      | Amount: |    |                  |
| **     ** |                      |      ** |    |                  |
+-----------+----------------------+---------+----+------------------+
|           |                      | **HOZ   |    |                  |
|           |                      | Units:  |    |                  |
|           |                      |      ** |    |                  |
+-----------+----------------------+---------+----+------------------+
| **Name(s) |                      |         | ** |                  |
| of        |                      |         | Da |                  |
| Revi      |                      |         | te |                  |
| ewer(s)** |                      |         | ** |                  |
+-----------+----------------------+---------+----+------------------+

**NOTE:** All questions that address requirements contain the citation
for the source of the requirement (statute, regulation, NOFA, or grant
agreement). If the requirement is not met, HUD must make a finding of
noncompliance. All other questions (questions that do not contain the
citation for the requirement) do not address requirements, but are
included to assist the reviewer in understanding the participant\'s
program more fully and/or to identify issues that, if not properly
addressed, could result in deficient performance. Negative conclusions
to these questions may result in a \"concern\" being raised, but not a
\"**finding**.\"

**[Instructions:]{.underline}** These instructions are applicable to the
five active HOZ program participants selected as part of HUD's FY 97 HOZ
Grant competition ("Round II"). It is designed to evaluate compliance
with HOZ expenditure requirements and assess accomplishments under the
HUD-approved HOZ proposal. The Exhibit is divided into five sections:
Eligible Activities; Performance; Program Management; Financial
Management (cross-referencing only); and Cross-Cutting Requirements.
Certain questions require the use of other Exhibits in this Handbook or
monitoring guidance contained in other documents. One Exhibit is to be
completed for each HOZ project monitored. For activities within the HOZ
that are funded by other CPD programs, the reviewer should determine
whether to include a review of other CPD programs as part of the HOZ
monitoring review and, if so, use the appropriate monitoring Exhibit(s)
elsewhere in this Handbook.

**[Questions:]{.underline}**

A. [Eligible Activities]{.underline}

1\.

+------------------------------------------------------------+---------+
| Is the program participant carrying out the activities     |         |
| described in its latest approved HOZ grant proposal?       |         |
|                                                            |         |
| \[HOZ Grant Agreement, Section II\]                        |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

2\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Is the program participant using its HOZ      |           |
| funds for approved uses?                                 |           |
|                                                          |           |
| \[HOZ NOFA, Section I.F; HOZ Grant Agreement, Sections   |           |
| II. and IV.(a)\]                                         |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

3\.

+------------------------------------------------------------+---------+
| Has the program participant limited administrative costs   |         |
| paid with the HOZ grant to 5%?                             |         |
|                                                            |         |
| \[HOZ NOFA, Section I.F.\]                                 |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

4\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Are all HOZ activities being carried out      |           |
| within the approved HOZ boundaries?                      |           |
|                                                          |           |
| \[HOZ NOFA, Section I.D; HOZ Grant Agreement, Section    |           |
| II\]                                                     |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

5\.

+------------------------------------------------------------+---------+
| If the program participant has made changes to its         |         |
| HUD-approved grant proposal, did the program participant   |         |
| follow the procedures for material and non-material        |         |
| amendments?                                                |         |
|                                                            |         |
| \[HOZ Grant Agreement, Section XIII; FY 97 HOZ Competition |         |
| Procedures for Amendments, 7/8/99\]                        |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
|                                                            |         |
| **     **                                                  |         |
+------------------------------------------------------------+---------+

6\.

+------------------------------------------------------------+---------+
| Did the program participant receive HUD approval for       |         |
| material amendments?                                       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
|                                                            |         |
| **     **                                                  |         |
+------------------------------------------------------------+---------+

7\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Do the program participant's files support    |           |
| the eligibility of the activities funded by the HOZ      |           |
| grant?                                                   |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section IX; 24 CFR Part 85.20\]   |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

[B. Performance]{.underline}

8\.

+------------------------------------------------------------+---------+
| Is the program participant submitting the required         |         |
| Quarterly Reports on time?                                 |         |
|                                                            |         |
| \[HOZ Grant Agreement, Section X; FY 97 HOZ Competition    |         |
| Procedures for Progress and Performance Reports, 7/8/99    |         |
| (rev 5/03)\]                                               |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

9\.

  ------------------------------------------------------------- ---------
  Are the Quarterly Reports consistent and accurate?            

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

10\.

+------------------------------------------------------------+---------+
| Do the Quarterly Reports cover all phases of the HOZ?      |         |
|                                                            |         |
| \[FY 97 HOZ Competition Procedures for Progress and        |         |
| Performance Reports, 7/8/99 (rev 5/03)\]                   |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

11\.

+------------------------------------------------------------+---------+
| Is the program participant meeting its HUD approved        |         |
| timeline?                                                  |         |
|                                                            |         |
| \[HOZ NOFA, Section I. J(1)(c); HOZ Grant Agreement,       |         |
| Section II\]                                               |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

12\.

+------------------------------------------------------------+---------+
| Is the program participant meeting its goal for assisting  |         |
| new homebuyers?                                            |         |
|                                                            |         |
| \[HOZ NOFA, Section I.E.(1); HOZ Grant Agreement, Section  |         |
| II\]                                                       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

13\.

+------------------------------------------------------------+---------+
| Is the program participant meeting the requirement that    |         |
| 51% of new homebuyer families be low- and moderate-income? |         |
|                                                            |         |
| \[HOZ NOFA, Section G; HOZ Grant Agreement, Section        |         |
| IV.(a)(3)\]                                                |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

14\.

+------------------------------------------------------------+---------+
| Is the program participant leveraging the anticipated      |         |
| amount of other funds?                                     |         |
|                                                            |         |
| \[HOZ NOFA, Section II.J.(4); HOZ Grant Agreement, Section |         |
| II\]                                                       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

15\.

  ---------------------------------------------------------- ------------
  **\[OS\]** Has the program participant inspected the       
  completed homebuyer properties to ensure that each         
  property meets all applicable State and local codes and    
  building standards?                                        

  **Describe Basis for Conclusion:**                         

                                                             
  ---------------------------------------------------------- ------------

16\.

  ------------------------------------------------------------- ---------
  Does the program participant have a process for resolving     
  homebuyer complaints?                                         

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

17\.

  ------------------------------------------------------------- ---------
  Has the program participant missed any significant            
  benchmarks? (If "yes," specify below.)                        

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

18\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Do the program participant's files support    |           |
| the information reported in the Quarterly Report as      |           |
| described below:                                         |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section IX; 24 CFR Part 85.20\]   |           |
+----------------------------------------------------------+-----------+
| a\. Number of HOZ units?                                 |           |
+----------------------------------------------------------+-----------+
| b\. Location of units within the HOZ boundaries?         |           |
+----------------------------------------------------------+-----------+
| c\. Beneficiary data?                                    |           |
+----------------------------------------------------------+-----------+
| d\. Sources and uses of funds?                           |           |
+----------------------------------------------------------+-----------+
| e\. Leverage?                                            |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

[C. Program Management]{.underline}

19\.

  ------------------------------------------------------------- ---------
  Has the program participant designated a HOZ coordinator?     

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

20\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Does the coordinator have sufficient          |           |
| authority to achieve results, resolve interagency        |           |
| conflicts or issues and take corrective actions?         |           |
|                                                          |           |
| \[HOZ NOFA, Section I.J.(5)\]                            |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

21\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Has the program participant executed written  |           |
| agreements with its contractors and subrecipients?       |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VIII\]                    |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

22\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Does the program participant have procedures  |           |
| to monitor the performance of its contractors and        |           |
| subrecipients?                                           |           |
|                                                          |           |
| \[HOZ Grant Agreement, Sections IV.(a)(2) and (c)\]      |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

23\.

  ---------------------------------------------------------- ------------
  **\[OS\]** Has the program participant monitored any       
  contractors or subrecipients?                              

  **Describe Basis for Conclusion:**                         

                                                             
  ---------------------------------------------------------- ------------

24\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Has the program participant taken corrective  |           |
| actions to resolve any findings or concerns?             |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
|                                                          |           |
| **     **                                                |           |
+----------------------------------------------------------+-----------+

[D. Financial Management]{.underline}

**\[OS\] [Instructions:]{.underline}** For a more detailed review of
financial management, use Exhibit 3-15, "Guide for Review of Financial
Management." For a more detailed review of cost allowability, use
Exhibit 3-16, "Guide for Review of Cost Allowability." Identified
deficiencies that result in findings should cite the HOZ Grant
Agreement, Section IV, which refers 24 CFR Part 84, 24 CFR Part 85 or
the applicable OMB Circular.

25\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Has the program participant established a     |           |
| system to maintain control and accountability of all HOZ |           |
| grant funds?                                             |           |
|                                                          |           |
| \[HOZ Grant Agreement, Sections IV.(a)(4) and VI.; 24    |           |
| CFR 85.20; FY 97 HOZ Grantee Financial Instructions,     |           |
| 5/98\]                                                   |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

26\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Does the program participant have             |           |
| documentation supporting the disbursement of grant       |           |
| funds?                                                   |           |
|                                                          |           |
| \[HOZ Grant Agreement VI.(c)\]                           |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

27\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Does the program participant minimize the     |           |
| time elapsing between the transfer of HOZ grant funds    |           |
| and the disbursement of these funds for grant purposes?  |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VI.(b)\]                  |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

28\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Does the program participant account for any  |           |
| program income that is directly generated by the         |           |
| expenditure of HOZ grant funds?                          |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VII\]                     |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

29\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Is program income used for other affordable   |           |
| housing and community development activities?            |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VII\]                     |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

30\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Are costs charged to the HOZ grant allowable? |           |
| (Use Exhibit 3-16.)                                      |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VI.(b)(1); OMB Circular   |           |
| A-87\]                                                   |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

31\.

+----------------------------------------------------------+-----------+
| Does the program participant have a process for ensuring |           |
| compliance with the Single Audit Act requirements of OMB |           |
| Circular A-133?                                          |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VI.(b)(3); OMB Circular   |           |
| A-133\]                                                  |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

32\.

+----------------------------------------------------------+-----------+
| Are required audits being submitted in a timely manner?  |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VI.(b)(3); OMB Circular   |           |
| A-133\]                                                  |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

33\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Are all audit findings resolved in a timely   |           |
| manner?                                                  |           |
|                                                          |           |
| \[HOZ Grant Agreement, Section VI.(b)(3); OMB Circular   |           |
| A-133\]                                                  |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

34\.

+----------------------------------------------------------+-----------+
| Are there any open audit findings that raise questions   |           |
| about the program participant's financial                |           |
| accountability?                                          |           |
|                                                          |           |
| \[HOZ Grant Agreement, Sections IV.(a)(4) and VI.; 24    |           |
| CFR 85.20; FY 97 HOZ Grantee Financial Instructions,     |           |
| 5/98; HOZ Grant Agreement, Section VI.(b)(3); OMB        |           |
| Circular A-133\]                                         |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

[E. Cross-cutting Requirements Compliance]{.underline}

35\.

+----------------------------------------------------------+-----------+
| **\[OS\]** Is there evidence that the program            |           |
| participant is complying with the following              |           |
| cross-cutting requirements (check "N/A" and indicate if  |           |
| the area was not reviewed or is not applicable):         |           |
+----------------------------------------------------------+-----------+
| a.  Procurement? (Use Exhibit 7-22.)                     |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(b); 24 CFR 85.36\]  |           |
+----------------------------------------------------------+-----------+
| b.  Section 3 Economic Opportunities? (Use Exhibit       |           |
|     22-7.)                                               |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(d)(5)\]             |           |
+----------------------------------------------------------+-----------+
| c.  MBE/WBE? (Use Exhibit 7-22.)                         |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(d)(6); 24 CFR       |           |
| > 85.36(e)\]                                             |           |
+----------------------------------------------------------+-----------+
| d.  Lead-based Paint? (See Chapter 24.)                  |           |
|                                                          |           |
|     \[HOZ Grant Agreement, Section IV.(b)(7)\]           |           |
+----------------------------------------------------------+-----------+
| e.  Uniform Relocation Act? (See Handbook 1378.0.)       |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(b)(6)\]             |           |
+----------------------------------------------------------+-----------+
| f.  NEPA? (Use Exhibit 21-1.)                            |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section III\]                   |           |
+----------------------------------------------------------+-----------+
| g.  Architectural Barriers Act? (Use Exhibit 22-1.)      |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(b)(9)\]             |           |
+----------------------------------------------------------+-----------+
| h.  Property and Equipment Disposition? (Use Exhibit     |           |
|     7-23.)                                               |           |
|                                                          |           |
| > \[HOZ Grant Agreement, Section IV.(b); 24 CFR 85.32\]  |           |
+----------------------------------------------------------+-----------+
| i.  Other (specify)?                                     |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+