We audited the Hamtramck Housing Commission’s American Recovery and Reinvestment Act of 2009 Public Housing Capital Fund Stimulus formula grant.  We selected the Commission based upon our analysis of risk factors related to the public housing agencies in Region 5’s¹  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.

The Commission did not administer its grant in accordance with Recovery Act, HUD’s, and its own requirements.  While the Commission generally obligated and expended its Recovery Act funds in accordance with Recovery Act rules and regulations, it did not maintain adequate procurement documentation or ensure that it paid reasonable prices for Recovery Act-funded construction projects.  It also failed to perform adequate independent cost estimates or prepare cost analyses of contract modifications.  As a result, HUD and the Commission lacked assurance that Recovery Act grant funds were used appropriately.

The Commission also did not ensure that (1) its contractors paid their employees the appropriate Federal labor standard wage rates as required by the Davis-Bacon Act, (2) eligible Section 3 participants were provided opportunities to become employed or receive employment training, and (3) it accurately reported in FederalReporting.gov the number of jobs created and retained.  As a result, HUD and the Commission lacked assurance that (1) contractors’ employees were paid the appropriate labor wage rate in accordance with the Davis-Bacon Act, (2) opportunities to become employed or receive employment training were provided to eligible Section 3 participants, and (3) the public had access to accurate information regarding the number of jobs created and retained with formula grant funds, and the Commission’s use of formula grant funds was not transparent.

We recommend that the Director of HUD’s Detroit Office of Public Housing require the Commission to (1) provide documentation or reimburse more than $230,000 from non-Federal funds to HUD, (2) provide support for 11 apprentices or pursue collections from applicable contractors to reimburse the appropriate employees more than $14,000 from non-Federal funds, and (3) implement adequate procedures and controls to address the findings cited in this audit report.

¹Region 5 includes the States of Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.