The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the Highland Park Housing Commission's (Commission) Public Housing and Public Housing Capital Fund programs (programs). The audit was part of the activities in our annual audit plan. We selected the Commission based upon its fiscal year 2005 independent auditor's report that identified it as having high-risk programs. Our objectives were to determine whether the Commission effectively administered its programs and followed HUD's requirements. This is the first of two audit reports on the Commission.

The Commission's programs administration regarding admission and occupancy, and procurement was inadequate. It did not comply with HUD's requirements and its policies in administering its admission and occupancy process. It was unable to support more than $153,000 in Public Housing operating subsidies received, did not receive total household payments of nearly $29,000, received excess total household payments of more than $13,000, and received nearly $8,000 in Public Housing operating subsidies to which it was not entitled.

The Commission's procurement activities were not conducted according to its and HUD's requirements. It did not follow HUD's requirements for full and open competition regarding the procurement of professional, housing maintenance, and general cleaning services totaling nearly $83,000 and lacked supporting documentation for more than $61,000 in work under the Commission's Public Housing Capital Fund program.

We informed the Commission's acting executive director and the Director of HUD's Detroit Office of Public Housing Hub of minor deficiencies through a memorandum, dated February 15, 2008.

We recommend that the Director of HUD's Detroit Office of Public Housing require the Commission to provide support or reimburse its applicable program from nonfederal funds for the unsupported payments, reimburse its applicable program from nonfederal funds for the improper use of funds, and implement adequate procedures and controls to help ensure that nearly $70,000 in Public Housing funds will be put to better use regarding its administration and occupancy processes.