We audited the Flint Housing Commission’s American Recovery and Reinvestment Act of 2009 Public Housing Capital Fund formula grant based upon our analysis of risk factors relating to the housing agencies in Region 5’s  jurisdiction.  Our objective was to determine whether the Commission administered its grant in accordance with Recovery Act, the U.S. Department of Housing and Urban Development’s (HUD), and its own requirements.  This is the second of two audit reports on the Commission’s Recovery Act grants.

The Commission did not always comply with the Recovery Act, HUD’s, and its own procurement requirements.  Specifically, it did not adequately support the cost reasonableness of its architectural services’ contracts and Recovery Act funded projects.  As a result, HUD and the Commission lacked assurance that more than $960,000 in Recovery Act formula grant funds was used appropriately.

Also, the Commission did not always follow HUD’s and its own contract management requirements for its Recovery Act Capital Fund formula grant.  Specifically, it did not (1) issue payments to its contractor in accordance with HUD’s requirements for one project, (2) adequately manage its force account labor unit renovations project, and (3) ensure that its own employees were paid the appropriate Federal labor standard wage rates as required by the Davis-Bacon Act.  As a result, HUD and the Commission lacked assurance that Recovery Act formula grant funds were used appropriately.  Further, the Commission underpaid employees nearly $22,000.

We recommend that HUD require the Commission to (1) provide sufficient documentation or reimburse HUD more than $960,000 for the unsupported cost estimates, wages, and materials and supplies and (2) reimburse its employees nearly $22,000 for Federal labor standard wage rates not paid.