The U.S. Department of Housing and Urban Development, Office of Inspector General audited the Hammond Housing Authority’s American Recovery and Reinvestment Act of 2009 Public Housing Capital Fund Stimulus formula and competitive grants. The audit was part of the activities in our fiscal year 2012 annual audit plan. We selected the Authority based upon our analysis of risk factors related to the housing agencies in Region V’s jurisdiction. Our objective was to determine whether the Authority administered its grants in accordance with Recovery Act, HUD’s, and its own requirements.
The Authority did not administer its grants in accordance with Recovery Act, HUD’s, and its own requirements. While the Authority generally obligated and expended its Recovery Act funds in accordance with Recovery Act rules and regulations, it did not ensure small purchases or contracts above its small purchase threshold were properly procured and executed in accordance with HUD’s requirements and its own procurement policies. Further, it did not ensure Federal and its own procurement requirements were followed when change orders were approved for work items that were outside the scope of work for the construction contracts.
The Authority also did not ensure that Recovery Act grant funds were (1) disbursed within HUD’s required timeframe, (2) properly allocated and drawn from appropriate budget line items, and (3) spent on eligible items.
The Authority did not ensure that its contractors complied with buy-American requirements of the Recovery Act, the Davis-Bacon Act, and HUD’s Section 3 Act of 1968. It also did not accurately report its Recovery Act information for all three Recovery Act grants in FederalReporting.gov.
These deficiencies resulted in $1,625 in ineligible costs, $281,049 in unsupported costs, and $7,000 in funds to be put to better use. Additionally, the public did not have access to accurate information relating to the Authority’s expenditures of the Recovery Act funds.
We recommend that the program coordinator of the Office of Public Housing require the Authority to (1) provide documentation or reimburse HUD $174,471 from non-Federal funds for transmission to the U.S. Treasury for inappropriate change orders, (2) support or reimburse HUD more than $106,000 from non-Federal funds for transmission to the U.S. Treasury, (3) pursue collection of $7,000 from its mixed finance development partner from non-Federal funds, and (4) implement adequate procedures and controls to address the findings cited in this audit report.