In accordance with our annual audit plan to review public housing programs and because of an anonymous complaint and issues identified by the San Antonio Office of Public Housing, we reviewed the Housing Authority of the City of Taylor, Taylor, TX. Our objectives were to determine whether the Authority operated its public housing and related grant programs in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements and to determine whether the complainant’s allegations were valid. Specifically, the complainant alleged that the former executive director gave away, sold, or transferred Authority-owned properties to other entities. The Office of Public Housing identified additional concerns regarding ineligible Section 8 Homeownership Voucher Program participants, unsupported salaries for employees working at multiple properties, and improper expenditures by a former executive director.
Both the complainant and HUD raised valid issues concerning improper activities. The Authority did not implement adequate policies and procedures and did not properly manage its public housing and related grant programs in accordance with HUD requirements. Specifically, the Authority (1) did not properly account for its funds, (2) allowed director 1 to improperly transfer assets, (3) paid unsupported salaries to employees who worked on multiple activities, and (4) allowed director 1 to transfer funds to lease and purchase a parking lot the Authority already owned, and (5) allowed director 2 to circumvent financial and procurement controls. In addition, the Authority violated the conflict-of-interest provisions of the Section 8 Homeownership Voucher Program and the HOME Investment Partnerships program. These issues occurred because management, consisting of the board and the various prior executive directors, did not follow HUD’s requirements and did not implement adequate internal controls. Consequently, the Authority lost control and possession of a $255,000 property it owned, lost control of two component units with net asset values of more than $1.7 million, and incurred $392,059 in questioned costs...
Recommendations
Public and Indian Housing
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Status2015-FW-1801-001-COpenClosed$2,032,266.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Require the Authority to take action to reclaim its properties valued at $2,032,266 to improve its financial position, decrease its reliance on HUD program funding, and address its comingling issues.
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Status2015-FW-1801-001-DOpenClosed$243,442.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require the Authority to determine how much of the $243,442 in salaries for individuals assigned to work at multiple properties was improperly paid with Federal funds and repay the amounts to the appropriate programs from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal programs were appropriate, the full $243,422 should be repaid to HUD.
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Status2015-FW-1801-001-FOpenClosed$40,600.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require the Authority to determine whether the Authority improperly used Federal funds totaling $40,600 to make lease payments on the parking lot it already owned. If Federal funds were improperly used, the Authority should repay $40,600 from non-Federal funds to its Federal program accounts. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $40,600 should be repaid to HUD.
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Status2015-FW-1801-001-HOpenClosed$11,833.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require the Authority to determine whether the Authority improperly used Federal funds totaling $11,833 which were used to cancel an existing phone system and purchase a new one. If Federal funds were improperly used, the Authority should repay $11,833 to its Federal program accounts from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $11,833 should be repaid to HUD.
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Status2015-FW-1801-001-JOpenClosed$50,000.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Require the Authority to determine whether the Authority improperly used Federal funds totaling $50,000 which were used to pay unnecessary severance contract costs. If Federal funds were improperly used, the Authority should repay $50,000 to its Federal program accounts from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $50,000 should be repaid to HUD.