We completed a review of the Freeport Housing Authority’s administration of its low-rent housing and homeownership programs. We selected the Authority due to a request from the U.S. Department of Housing and Urban Development’s (HUD) New York Office of Public and Indian Housing officials. The objective of the audit was to determine whether the Authority administered its low-rent housing and homeownership programs in accordance with HUD’s regulations.
Our review determined that the Authority did not administer its low-rent housing and homeownership programs in accordance with HUD’s regulations. Specifically, former Authority officials did not (1) maintain adequate records to support the proper procurement of services, including justifications for not using customary procurement procedures; (2) administer its homeownership program in compliance with the HUD-approved homeownership plan; (3) comply with admissions and occupancy administrative requirements; and (4) implement financial and general administrative practices that were consistent with requirements. As a result, officials could not provide documentation to show that they expended more than $1 million in Federal funds for properly procured services.
Further, our review determined that officials could not ensure the proper use of more than $1.25 million in homeownership sale proceeds. As such, some proceeds may have been improperly spent, depriving the Authority of funds that could have been used to complete the sale of all scattered-site properties under the program. Former Authority officials also lacked records to support the integrity of the Authority’s tenant selection process and financial controls to ensure the proper allocation and disbursement of $270,849 in Federal funds.
We recommend that the Director of HUD’s New York Office of Public Housing require Authority officials to (1) implement controls to ensure that the emergency procurement procedures in the Authority’s procurement policy comply with Federal regulations and are consistently followed, (2) provide supporting documents for the use of approximately $1.25 million in homeownership program sale proceeds, (3) maintain records to show the proper selection of applicants from the Authority’s waiting lists, and (4) develop and implement financial controls to ensure the proper allocation and disbursement of funds.
Recommendations
Public and Indian Housing
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Status2015-NY-1002-002-COpenClosed$1,250,417.00Questioned 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.
We recommend that the Director of HUD’s New York Office of Public and Indian Housing require Authority officials to provide supporting documents for the proper use of $1,250,417 in sale proceeds from the scattered-site properties. Any amounts not supported or found to be improperly used should be repaid to the homeownership program from non-Federal funds.