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September 05, 2012
  • Public and Indian Housing
2012-CH-1010
2012-ch-1010.pdf

The U.S. Department of Housing and Urban Development, Office of Inspector General audited the Aurora Housing Authority’s Recovery Act formula grant. The audit was part of the activities in our fiscal year 2012 annual audit plan. We selected the Authority based upon our analysis of risk factors related to the housing agencies in Region V’s (see footnote) jurisdiction. Our objective was to determine whether the Authority administered its grant in accordance with Recovery Act, HUD’s, and its own requirements.

The Authority did not administer its grant in accordance with Recovery Act, HUD’s, and its own requirements. While the Authority generally obligated and expended its Recovery Act funds in accordance with Recovery Act rules and regulations, it did not ensure that its contractors (1) purchased products manufactured in the United States in accordance with the Buy American Act or that met Energy Star standards and (2) paid prevailing wages in accordance with the Davis-Bacon Act. Further, the Authority did not (1) follow Federal and its own procurement requirements, (2) document that work was complete before payments were made, and (3) correctly report the progress of its Recovery Act grant activities.

As a result of the Authority’s noncompliance, HUD and the Authority lacked assurance that more than $346,000 in Recovery Act grant funds was used appropriately. Additionally, the public did not have access to accurate information regarding the number of jobs created and retained with formula grant funds, and the Authority’s use of formula grant funds was not transparent.

We recommend that the Director of HUD’s Chicago Office of Public Housing require the Authority to (1) reimburse HUD $2,400 from non-Federal funds for transmission to the U.S. Treasury, (2) support or reimburse HUD more than $343,000 from non-Federal funds for transmission to the U.S. Treasury, (3) pursue collection from the contractor or reimburse the contractor’s employees more than $900 from non-Federal funds, (4) ensure that its staff is trained on and familiar with Federal procurement requirements, and (5) implement adequate procedures and controls to address the findings cited in this audit report

(Footnote) Region V includes the States of Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.