In accordance with our regional plan to review public housing programs and as part of our overall risk strategy, we reviewed the Housing Authority of the City of Victoria, TX.  Our objective was to determine whether the Authority operated its public housing and related grant programs in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements.  However, we limited our review to determining whether the Authority (1) properly collected, deposited, and recorded its low-rent rental receipts; (2) made additional or improper payroll payments; and (3) had adequate controls over its credit cards.  We also reviewed board oversight and expanded our testing to cover other high-risk disbursements and the Authority’s fixed assets inventory.

Although limited testing showed the Authority properly collected, deposited, and recorded its low-rent rental receipts, it allowed improper and unsupported payments for salaries, wages, leave, credit cards, and other items.  It also permitted employee salary advances and failed to track their repayment.  Additionally, it did not properly maintain or reconcile its fixed assets inventory.  These issues occurred because the Authority’s management did not provide adequate oversight.  As a result, the Authority paid questioned costs totaling $782,333.  Further, if it takes corrective action, it will put $33,557 to better use.  The Authority will need to support or repay the questioned funds, adopt policies and procedures to prevent the identified problems from continuing to occur, and take steps to correct its financial books and records.