The Rhode Island Office of Internal Audit and Program Integrity released a report this week flagging serious weaknesses in the Executive Office of Housing’s (EOH) handling of federal grant money. The audit found that $2,783,740 in grant revenue – $66,300 from fiscal 2025 and roughly $2.7 million from fiscal 2026 – was drawn down but not entered into the state’s accounting system as of June 8.
Missing entries and expired grants
Because the revenue was not recorded, the money was transferred to a state escrow account, a step required when agencies fail to log grant income by the end of the fiscal year. While the unrecorded deposits do not represent an actual loss, the oversight could affect financial reporting and compliance with federal requirements.
In addition, the audit identified four HUD grants that expired between 2022 and 2025 with $202,710 still undrawn. The agencies receiving those funds had not submitted eligible expenses, and the EOH had not retained documentation of extension requests it claimed to have made to the U.S. Department of Housing and Urban Development.
Agency response and corrective actions
Housing Secretary Deborah Goddard emphasized that the $2.8 million was never missing; it was recorded in an older financial system that the state is phasing out. “It was always there, we knew where it was and we were in the process of moving it to the new ERP system,” Goddard said. She added that the transition is now complete and the funds are fully accounted for.
Goddard also explained that staff viewed the extension requests as routine, which is why they were not escalated to her. “This is not the first time that funds have not been fully expended, and they have routinely been able to get extensions from HUD,” she noted. The office ultimately secured those extensions, allowing providers additional time to spend the remaining balances.
To prevent future lapses, the agency has instituted quarterly reviews of all federal awards that include the secretary, tracking commitments, expenditures, remaining balances, and expiration dates. “That won’t happen again,” Goddard asserted.
Audit ratings and next steps
The audit rated the missing‑revenue finding as low risk, but flagged the lack of documented, agency‑wide grant‑administration policies as a high‑risk issue requiring immediate action. The report noted the absence of formal risk‑assessment processes, annual monitoring plans, and uploads to the state’s grant‑management system.
In response, the EOH has formalized procedures for tracking grant expirations, extensions, drawdowns, and closeouts, and drafted a grant‑policies and procedures manual. Additional programmatic compliance reviews of homelessness service providers began in May 2026, supplementing existing financial reviews of reimbursement requests. “We are doing field audits and monitors of our homeless response providers that had not been done before,” Goddard said.
Context and prior concerns
This audit follows a 2024 HUD review that highlighted problems with tracking COVID‑era grant spending, including questions about recipient identification and potential duplication of assistance. That review occurred before the Executive Office of Housing became a standalone agency.
State officials say the new oversight measures align with the administration’s broader commitment to fiscal responsibility and effective use of federal resources, especially as housing needs remain acute across Rhode Island.
Stakeholders, including local nonprofit housing providers, have expressed cautious optimism that the strengthened controls will improve transparency and ensure that federal dollars reach families in need without unnecessary delays.
Original reporting: NBC 10 WJAR (Sinclair) – local — read the source article.
