We audited the Housing Authority of the City of Richmond’s (Authority) procurement activities. Our objective was to determine whether the Authority followed procurement requirements. We found that the Authority could not adequately support that procurement activities were conducted in accordance with applicable requirements. As a result, it could not demonstrate that contracts were awarded to vendors whose proposals were most advantageous to the Authority. We also found that the Authority had internal control weaknesses. The written procedures contained inconsistent instructions, payments were processed and issued without proper supporting documentation and required approvals, contract limits were ignored, and controls for safeguarding the Authority’s financial assets were not in place or not effective.

We recommend that HUD require the Authority to (1) terminate the existing contracts and ongoing purchases for security services, landscaping maintenance, Section 8 housing quality standards annual inspection services, and Section 8 housing quality standards initial inspection services; (2) conduct new procurements for these services in accordance with applicable requirements; (3) repay from nonfederal funds $112,755 to its public housing program or Section 8 program, as appropriate, for ineligible costs; (4) support or repay from nonfederal funds more than $2.4 million to its public housing program or Capital Fund or Section 8 program, as appropriate, for unsupported costs; (5) obtain HUD’s review and approval of all contracts and amendments totaling more than $100,000, in part or aggregate before execution, for the next three years or until HUD is satisfied that procurement actions are appropriate; and (6) provide training to responsible personnel to ensure that they understand federal procurement requirements.