U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.


The U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General (OIG) audited the Stark Metropolitan Housing Authority’s American Recovery and Reinvestment Act Public Housing Capital Fund stimulus formula grant as part of the activities in our fiscal year 2012 annual audit plan. We selected the Authority based upon risk factors related to the housing agencies in Region 5’s Region 5 includes the States of Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. jurisdiction. Our objective was to determine whether the Authority administered its grant in accordance with Recovery Act, the U.S. Department of Housing and Urban Development’s (HUD), and its own requirements.

The Authority did not always ensure that its contractors complied with the Davis-Bacon Act and Federal labor standards. For one contractor, the Authority did not (1) conduct a sufficient number of interviews with seven subcontractors’ employees to ensure that proper wages were received, (2) investigate complaints of alleged violations of Federal labor standards for two subcontractors, or (3) obtain sufficient documentation from seven subcontractors to determine whether their employees were paid the appropriate prevailing wage rates in accordance with the Davis-Bacon Act. The Authority did not always comply with Recovery Act, HUD’s, or its own procurement procedures. Specifically, it (1) purchased one range and one refrigerator to replace appliances that had remaining useful life, (2) did not perform a cost analysis before soliciting bids for the purchase and installation of video surveillance equipment, and (3) did not ensure that proper procurement procedures were followed for the purchase and installation of 119 furnaces. Further, the Authority did not always ensure that it complied with HUD’s and Recovery Act reporting requirements. Specifically, it did not accurately report in FederalReporting.gov the number of jobs created and retained.

As a result, HUD and the Authority lacked assurance that Recovery Act funds were used appropriately, the public did not have access to accurate information regarding the number of jobs created and retained, and the Authority’s use of the formula grant was not transparent.

We recommend that HUD require the Authority to (1) support that employees were paid proper Davis-Bacon wages or reimburse underpaid employees $6,820 from non-Federal funds, (2) reimburse HUD $680 from non-Federal funds for transmission to the U.S. Treasury for the appliances that were improperly replaced, and (3) implement adequate procedures and controls to address the findings cited in this audit report.