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Report Fraud, Waste and Abuse
July 11, 2019
  • Public and Indian Housing
2019-LA-1008
2019-LA-1008.pdf

We audited the Compton Housing Authority’s Housing Choice Voucher Program, based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Los Angeles Office of Public Housing, due to concerns regarding its financial activity control weaknesses.  The objective of the audit was to determine whether the Authority administered its Housing Choice Voucher Program in accordance with program requirements, with an emphasis on its procurement, financial transactions, and portability.

The Authority did not follow proper procurement or financial management procedures for professional auditing services and ensure the timely submission of audited financial statements in accordance with HUD requirements.  It also overreimbursed housing assistance payment (HAP) administrative fees to the City’s general fund account.  As a result, $77,542 in program funds spent on professional auditing services was not reasonable and appropriate, HUD had no assurance regarding the financial condition of the Authority’s programs, and $30,562[1] in HAP funds was not available for the operation of the program.

We recommend that the Director of the Los Angeles Office of Public Housing require the Authority to (1) repay the program $77,542 from non-Federal funds for the unreasonable professional auditing service payments; (2) establish and implement additional procedures and controls to ensure that procurement and contracting requirements are followed, along with the associated maintenance of applicable documentation; (3) complete and submit the audited financial statements for all past-due fiscal years; and (4) develop and implement additional procedures and controls to ensure that the administrative fees for the portability HAP are accurately calculated.  We also recommend that the Director consider imposing sanctions on the Authority for not completing and submitting audited financial statements for all delinquent fiscal years.

 

Recommendation Status Date Issued Summary
2019-LA-1008-001-A Closed July 11, 2019 Repay the Housing Choice Voucher Program $77,542 from non-Federal funds for the unreasonable professional auditing service payments.
2019-LA-1008-001-B Closed July 11, 2019 Establish and implement additional procedures and controls to ensure that City personnel responsible for administering procurement on the Authority’s behalf follow procurement and contracting requirements and maintain applicable supporting documentation in accordance with HUD requirements.
2019-LA-1008-001-C Closed July 11, 2019 Establish and implement additional procedures and controls to ensure that audited financial statements are prepared and submitted in accordance with HUD requirements.
2019-LA-1008-001-D Closed July 11, 2019 Complete and submit to HUD the audited financial statements for all past-due fiscal years in accordance with HUD regulations.
2019-LA-1008-001-E Closed July 11, 2019 Consider imposing administrative sanctions and remedies on the Authority for the nonsubmission of audited financial statements for all overdue fiscal years.
2019-LA-1008-002-A Closed July 11, 2019 Develop and implement additional procedures and controls to ensure that City employees properly calculate administrative fees for portability HAP related to the Authority.