We audited the Columbus Metropolitan Housing Authority’s Public Housing Operating and Capital Fund programs based on an anonymous complaint to our hotline. Our audit objective was to determine whether the Authority administered its programs in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements.
The Authority invested Federal funds in non-HUD-approved investment accounts and did not properly record the proceeds from the sale of a public housing property. As a result, HUD and the Authority lacked assurance that nearly $21 million in Federal funds was protected. Also, nearly $14 million in sales proceeds may not have been available for the intended purposes.
In addition, the Authority could not support the source of funds for a loan to an affiliated entity. As a result, HUD and the Authority lacked assurance that $261,990 in Federal funds was available for program purposes.
The Authority did not comply with HUD’s procurement requirements for one contract. It also used non-Federal funds to pay Capital Fund expenses and inappropriately used capital funds as reimbursement. As a result, HUD and the Authority lacked assurance that more than $263,000 in capital funds used to pay for the contract was reasonable and that the Authority did not incur and pay expenses before the obligation start date of its Capital Fund grants.
We recommend that the Director of HUD’s Cleveland Office of Public Housing require the Authority to procure and use HUD-approved investment accounts for Federal funds, ensure that sales proceeds are maintained in a restricted account, support the source of funds for the loan and the reasonableness for one contract or reimburse its program from non-Federal funds, and implement adequate procedures and controls to address the findings cited in this audit report.
Recommendations
Public and Indian Housing
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Status2018-CH-1006-001-AOpenClosed$21,478,820.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on July 19, 2019Procure appropriate HUD-approved investment accounts and move all Federal funds from the STAR Ohio investment accounts to HUD-approved accounts to ensure that $20,706,862 or the current balance of the STAR Ohio accounts is properly protected.
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Status2018-CH-1006-001-BOpenClosedClosed on January 07, 2020
Implement adequate procedures and controls to ensure that the Authority complies with HUD’s requirements for its investments of Federal funds.
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Status2018-CH-1006-001-COpenClosedClosed on January 07, 2020
Ensure that its staff is properly trained and familiar with HUD’s requirements to ensure that it properly procures and invests Federal funds in HUD-approved investment accounts.
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Status2018-CH-1006-001-DOpenClosedClosed on January 07, 2020
Ensure that the proceeds from the sale of Bollinger Tower proceeds are moved into a separate HUD-approved restricted investment account and appropriately recorded in a restricted account in the general ledger.
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Status2018-CH-1006-001-EOpenClosedClosed on March 26, 2020
Implement adequate policies and procedures to ensure that future proceeds from the disposition or sale of public housing are appropriately recorded and reported in the Authority’s books of record and annual audited financial statements and HUD’s Financial Data Schedule system.
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Status2018-CH-1006-001-FOpenClosedClosed on January 07, 2020
Ensure that its staff is appropriately trained and familiar with HUD’s requirements to ensure that proceeds from future dispositions or sales of public housing property or other HUD assets are appropriately recorded and reported.
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Status2018-CH-1006-002-AOpenClosed$261,990.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on January 07, 2020Determine the source of funds for the Waggoner Senior Housing note to ensure that the funds were loaned appropriately and that when payments are received, the payments are applied to the appropriate account. If the source of funds cannot be determined, the Authority should reimburse its program $261,990 from non-Federal funds.
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Status2018-CH-1006-002-BOpenClosedClosed on January 07, 2020
Ensure that the newly developed procedures are sufficient and fully implemented to ensure that the source of funds loaned is properly tracked and that payments received are applied to the appropriate accounts.
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Status2018-CH-1006-003-AOpenClosed$258,412.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on July 25, 2019Support the reasonableness of the $258,412 paid for contract M-1449 or reimburse its Capital Fund program from non-Federal funds.
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Status2018-CH-1006-003-BOpenClosed$4,899.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on July 25, 2019Support that the contract modification totaling $4,899 for contract number M-1449 was reasonable. The amount that cannot be shown to be reasonable should be reimbursed to its Capital Fund program from non-Federal funds.
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Status2018-CH-1006-003-COpenClosedClosed on June 27, 2019
Implement adequate procedures and controls to ensure that it complies with HUD’s procurement requirements.
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Status2018-CH-1006-003-DOpenClosedClosed on June 27, 2019
Ensure that its staff is properly trained and familiar with HUD’s requirements to ensure that documentation necessary to support the reasonableness of contract costs is obtained and maintained.
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Status2018-CH-1006-003-EOpenClosedClosed on December 03, 2019
Implement adequate procedures and controls to ensure that capital funds are drawn down and disbursed in accordance with HUD’s requirements.
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Status2018-CH-1006-003-FOpenClosedClosed on December 03, 2019
Implement adequate procedures and controls to ensure that it properly reports its expenditures and disbursements in LOCCS in accordance with HUD’s requirements.