We audited the Fresno Housing Authority due to a complaint alleging that the Authority steered contracts, did not seek competition for all of its required procurements, and did not maintain adequate supporting documentation.  The objective of the audit was to determine whether the Authority used its operating and capital funds in accordance with U.S. Department of Housing and Urban Development (HUD) requirements when procuring goods and services.

We did not find evidence that the Authority steered its Public Housing Operating Fund and Capital Fund contracts.  However, other aspects of the complaint had merit.  The Authority did not maintain adequate documentation to support its procurement of security services, financial audit services, window retrofits, and heating and air conditioning upgrades.  Additionally, it did not conduct all of its procurement transactions in a manner providing full and open competition.  Specifically, the Authority did not seek competition for legal services.  Also, it did not seek competition for a change order, which was outside the scope of a renovation project.  These conditions occurred because the Authority misinterpreted HUD procurement regulations.  Also, the Authority’s informal procurement practices did not ensure that it maintained required documentation.  As a result, the Authority was at risk of not being able to support that the capital and operating funds it spent on HUD contracts were fair and reasonable and of the best value to the program.

We recommend that the Acting Director of HUD’s San Francisco Office of Public Housing require the Authority to (1) develop written procedures to ensure that adequate documentation is maintained to support the significant history of each procurement and (2) develop written procedures to ensure that adequate competition is obtained for all of its required procurements.