We audited the Housing Authority of the City of Bridgeport, CT, to address complaints and areas that came to our attention during a prior audit.  Our objective was determine whether costs charged to Federal housing programs were eligible, reasonable, and supported.  Specifically, we determined whether officials properly (1) charged development staff costs, (2) charged Section 8 consulting costs, (3) implemented flat rents, (4) loaned Federal funds, (5) performed  renovation work at Greene Homes, and (6) followed conflict of interest rules.

Although development staffing costs charged to the public housing program were eligible, reasonable, and supported and a complaint regarding consulting services charged to the Section 8 program was not substantiated, former Authority officials did not always follow HUD requirements.  Specifically, (1) flat rents were not properly implemented, (2) Federal funds were improperly used for non-Federal entities, (3) renovation work was not safe and a contractor was underpaid, and (4) conflict-of-interest rules were not always followed.  We attributed these conditions to inadequate controls over flat rents, poor management decisions, a lack of supervision, and officials’ unfamiliarity with and failure to follow conflict-of-interest rules.  As a result, the Authority lost millions of dollars in rental income, Federal funds were not used for their intended purpose, renovation work failed to meet standards, a contractor was underpaid, and conflicts of interest may have eroded public confidence in Federal programs.  The Authority’s recently hired officials were receptive to our findings and had started to take corrective actions.

We recommended that HUD’s Hartford Office of Public and Indian Housing require Authority officials to (1) update flat rents which may result in more than $600,000 in additional annual income, (2) repay Federal housing programs more than $118,000 for the improper use of Federal funds, (3) correct unsafe renovations at the Greene Homes project and (4) obtain training and follow HUD’s conflict-of-interest requirements.