As part of the Office of Inspector General’s (OIG) obligation to ensure accountability and transparency in the use of the American Recovery and Reinvestment Act of 2009 (Recovery Act) funds, we performed a capacity review to assess the Syracuse Housing Authority’s (Authority) administration of its capital funding program. The Authority was awarded $4.5 million in capital funds under the Recovery Act. Our objective was to evaluate the Authority’s capacity in the area of internal controls, eligibility, financial controls, procurement, and outputs/outcomes to effectively administer its Recovery Act funds. Our review determined that significant control weaknesses diminished the Authority’s capacity to effectively administer its capital fund program in the areas of internal controls, eligibility, financial controls, procurement, and output/outcomes. Specifically, the Authority failed to (1) complete its 2002 CFFP in a timely manner, and additional CFP grants remain open; (2) follow HUD-required contracting and procurement regulations, thus limiting competition and potentially causing excessive and/or ineligible costs; and (3) implement a proper control environment, which contributed to management and financial control deficiencies.
We recommend that HUD (1) closely monitor the operations of the Authority to ensure compliance with all Capital Fund Financing Program (CFFP), Capital Fund Program, and Recovery Act deadlines and objectives, and (2) certify that the Authority’s procurement practices meet the federal procurement requirements. Further, we recommend that HUD instruct the Authority to (3) immediately complete its 2002 CFFP bond program activities and use the remaining $1.3 million for eligible improvements, (4) submit a viable plan to obligate capital funds and supplemental Recovery Act funds, (5) establish and implement operational procedures to ensure compliance with applicable regulations for all future procurement activities, and (6) institute effective management and financial controls to ensure successful administration and completion of the Recovery Act program and objectives.