We audited the Housing Authority of the County of Lackawanna, PA, because we received an anonymous complaint alleging incompetent leadership, nepotism, misuse of funds, and poor quality of life at the Authority.  Our objectives were to determine whether the allegations in the complaint had merit and whether the Authority had effective controls to prevent conflicts of interest, ensure that interfund accounts were settled in a timely manner, identify parties excluded from doing business with the U.S. Department of Housing and Urban Development (HUD), and prevent undue risk to the Authority from its employees’ use of Authority-owned vehicles.  This is the first of two audit reports to be issued on the Authority.   

The allegations in the complaint had merit.  The Authority allowed a conflict-of-interest situation to exist, did not settle an interfund account balance totaling $370,234 in a timely manner, did not check to identify parties excluded from doing business with HUD, and assumed an undue risk by not controlling its employees’ use of Authority-owned vehicles.  We discussed these deficiencies with Authority officials during the audit and they took some immediate corrective action and informed us they planned to take additional corrective action to address our recommendations.

We recommend that HUD require the Authority to develop and implement (1) policies and procedures to detect, prevent, and resolve conflict-of-interest situations and (2) controls to ensure that interfund accounts are settled in a timely manner, thereby putting $370,234 to better use over a 1-year period.