In accordance with our regional plan to review public housing programs and because of weaknesses identified by the U.S. Department of Housing and Urban Development’s (HUD) Office of Public Housing, we reviewed the Malakoff Housing Authority, Malakoff, TX.  Our objective was to determine whether the Authority’s controls were sufficient to ensure that it administered its HUD Public Housing programs in accordance with regulations and guidance.

The Authority’s executive director violated the Authority’s ACC by contracting with and hiring related parties and family members.  Further, the executive director failed to implement financial controls, to adhere to procurement regulations, or to accurately administer tenant rents.  In addition, the board of commissioners and the executive director violated state laws and its own bylaws.  These conditions occurred because the board and the executive director ignored Federal regulations, state law, and their own bylaws.  As a result, the Authority spent $577,367 on ineligible and unsupported costs, which included $80,054 in Recovery Act funds. 

We recommend HUD require the Authority to repay $353,015 in ineligible costs to its program or HUD, whichever is appropriate; support or repay $224,352 in unsupported costs to its program or HUD, whichever is appropriate; adopt and follow procurement policies and procedures; obtain and maintain certificates of appointment for all current and future board members; review past board meeting minutes and reapprove actions adopted when a quorum was not present or where voting reflected in the minutes was inaccurate; adopt and follow a clear rent policy to prevent irregularities from continuing; obtain training or technical assistance concerning its ACC, Federal regulations, financial management and internal controls, procurement, roles and responsibilities of the executive director and the board, and tenant rent collections and documentation; and, direct the Mayor of Malakoff to evaluate the board of commissioners and its effectiveness and remove and replace commissioners as appropriate.