We conducted a review of the District of Columbia Housing Authority’s payments for outside legal services in conjunction with an ongoing internal audit of the U.S. Department of Housing and Urban Development’s (HUD) oversight of public housing agencies’ expenditures for outside legal services.  Our review objective was to determine whether the Authority made payments for outside legal services in compliance with applicable requirements.

We found that the Authority did not always make payments for outside legal services in compliance with applicable requirements.  It did not always maintain documentation to support payments for legal services.  It also paid for services (1) performed by unapproved personnel, (2) performed beyond the terms of the contract, and (3) that were block billed.  These problems occurred because the Authority lacked controls to ensure that it adequately verified invoices before payment and followed Federal requirements and contract terms.  As a result, the Authority made nearly $1 million in unsupported payments for outside legal services.

We recommend that the Director of HUD’s District of Columbia Office of Public Housing require the Authority to (1) provide documentation to support $999,977 in unsupported payments identified by the review or reimburse its program from non-Federal funds for costs that it cannot support; and (2) develop and implement controls to ensure that invoices for legal services are adequately verified and its payments for outside legal services are made in accordance with the terms of the related contracts and other applicable requirements.