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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Columbia Housing Authority in Columbia, MO because it was the only public housing agency in the State of Missouri that had converted units under the U.S. Department of Housing and Urban Development’s RAD program at the time.  Our objective was to determine whether the Authority maintained auditable written records of resident relocation incentive payment consultations and properly paid business relocation incentive payments.

We found that the Authority did not maintain the required written records of resident relocation incentive payment consultations.  As a result, the Authority was unable to demonstrate that $126,824 in incentive payments were fair and consistent.  In addition, the Authority risked an appearance of favoritism.  We also found that the Authority paid $9,608 for a business owner’s relocation costs and financial losses without calculating the previous 2 years of average annual net earnings.  As a result, HUD lacked assurance that the Authority properly paid a displaced business in lieu of payment for actual moving and related expenses.   

We recommend that the Director of HUD’s St. Louis, MO, Office of Public Housing require the Authority to support $126,824 in incentive payments and develop and implement controls over its incentives program, including record-keeping rquirements; defined processes, such as detailed checklist of available incentives, including monetary limits; and supervisory review requirements.  Additionally, we recommend that HUD take appropriate administrative action and require the Authority to support the $9,608 payment with the required 2 years of annual net earnings.