We audited the Housing Choice Voucher program (Voucher program) at the Brockton Housing Authority (Authority) as part of our annual audit plan. Theoverall objective of the audit was to determine whether the Authority efficientlyand effectively administered its Voucher program in compliance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) regulations. Our efforts focused on whether the Authority (1) used Voucher program funds only for the administration of the program and whether interprogram fund transactions were properly accounted for and reported; and (2) followed the HUD's procurement regulations and its own procurement policy.

The Authority generally administered the Voucher program efficiently and effectively and in compliance with its annual contributions contract and HUD regulations. However, it did not conduct reconciliations to properly account for and repoli interprogram fund transactions that occurred between its Federal and State programs during fiscal years 2008 and 2009. During the audit, the Authority's management was able to reconcile its fiscal year 2008 audited financial statement interprogram accounts of $3.8 million between State and
Federal programs. This reconciliation was accomplished by tracing the appropriate interfund amounts to corresponding State or Federal general ledger account numbers to ensure their accuracy. However, the Authority did not properly account for and report the remaining fiscal year 2009 interprogram fund transactions between its Federal and State programs, resulting in more than $885,000 in unsupported transactions' being recorded in its program accounts
before our audit was completed. In addition, the Authority could not provide support and justification for $260,316 in Voucher program contracts to show that the contracts were properly awarded/documented.

We recommend that the Director of the Boston Office of Public Housing require the Authority to (1) provide support for more than $885,000 in intelprogram fund transactions that are out of balance between Federal and State programs and (2) provide support and justification for $260,316 paid for contracts for inspection services and legal services or reimburse its operating funds from non-Federal funds for the applicable amounts.