The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Redwood Juniper Tacoma Apartments to determine whether Redwood Juniper’s owner took an unauthorized distribution in excess of surplus cash, procured services in accordance with HUD rules and regulations, and maintained an auditable waiting list. We selected the multifamily housing project for audit because it appeared that the project owner took an unauthorized distribution in excess of surplus cash in 2012.

The Redwood Juniper project owner took an unauthorized distribution in excess of surplus cash, did not obtain three written cost estimates for goods or services expected to exceed $10,000 per year, and did not maintain an auditable waiting list. We recommend that HUD require the project to provide cost justifications for the $42,700 spent on service contracts and develop and implement policies and procedures to ensure that these issues do not recur.