We audited the Crisfield Housing Authority’s use of public housing program operating and capital funds because we received a hotline complaint alleging misuse of public housing assets and we had never audited the Authority. The audit objective was to determine whether the Authority administered its public housing program in accordance with applicable U.S. Department of Housing and Urban Development (HUD) requirements and its annual contributions contract.
The Authority did not properly administer its public housing program according to applicable HUD requirements and its annual contributions contract. It did not (1) properly administer its operating funds, (2) comply with conflict-of-interest requirements, and (3) comply with capital fund requirements. As a result, the Authority’s use of operating funds totaling $137,500 for security services and more than $1.4 million for unit repairs were unsupported and it made ineligible payments totaling $111,568 for unit repairs and repairs to its public housing vehicles using operating funds. In addition, regarding its use of capital funds, the Authority could not show that the prices it paid for products and services totaling $171,822 were fair and reasonable, and payments it made totaling $236,284 for salaries and other services were ineligible.
We recommend that HUD direct the Authority to (1) provide documentation to support $137,500 it paid for security services, or reimburse its operating fund for any costs that it cannot support; (2) reimburse its operating fund $111,568; (3) submit a retroactive request for a waiver to the conflict-of-interest requirements to support payments of nearly $1.5 million or reimburse the appropriate fund for any amount not covered by a waiver; (4) provide documentation to show that purchases of products and services totaling $171,822 using capital funds were at fair and reasonable prices; and (5) reimburse its capital fund $170,784. We also recommend that HUD’s Departmental Enforcement Center evaluate the apparent conflict-of-interest situations identified in this report and pursue administrative sanctions if warranted.
Recommendations
Public and Indian Housing
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Status2018-PH-1007-001-AOpenClosed$137,500.00Questioned 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 March 30, 2023Provide documentation to support the $137,500 paid for security services from operating funds or reimburse its program from non-Federal funds for any costs that it cannot support.
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Status2018-PH-1007-001-BOpenClosedClosed on October 11, 2021
Provide the documentation that was missing from the 14 files reviewed. If documentation cannot be provided, the Authority should follow applicable regulations and terminate or modify assistance as necessary.
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Status2018-PH-1007-001-COpenClosedClosed on August 13, 2020
Develop and implement controls to ensure that families are properly selected from the waiting list and that their selection is documented in their tenant files.
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Status2018-PH-1007-001-DOpenClosedClosed on March 30, 2021
Correct the rent calculations for the 54 families identified by the audit to properly implement flat rent.
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Status2018-PH-1007-001-EOpenClosed$25,248.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on March 31, 2021Correct the rent calculations for the employees whom it charged an extremely low rent, thereby ensuring that it collects an estimated $25,248 more in rent over the next year.
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Status2018-PH-1007-001-FOpenClosedClosed on March 31, 2021
Develop and implement controls to ensure that it pays for services only after it receives the documentation required to be provided by contract and that provided services are supported by a contract.
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Status2018-PH-1007-001-GOpenClosedClosed on August 13, 2020
Develop and implement procedures to have a supervisor review tenant files to ensure that the files are accurate and complete and comply with program requirements.
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Status2018-PH-1007-001-HOpenClosed$38,664.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on August 13, 2020Develop and implement procedures to ensure that flat rents are calculated correctly for those families that choose to pay flat rent, thereby ensuring that it collects at least $38,664 in additional rental income.
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Status2018-PH-1007-001-IOpenClosedClosed on March 30, 2021
Provide training and technical assistance to the Authority to ensure that it properly administers its operating funds in accordance with applicable requirements.
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Status2018-PH-1007-002-AOpenClosed$111,568.00Questioned 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 March 30, 2023Reimburse its program $111,568 from non-Federal funds for the ineligible payments it made due to the conflict-of-interest situations identified by the audit.
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Status2018-PH-1007-002-BOpenClosed$1,499,137.00Questioned 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 March 30, 2023Submit a retroactive request for a waiver to the conflict-of-interest requirements to support payments totaling $1,499,137 or reimburse the appropriate fund from non-Federal funds for any amount not covered by a waiver.
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Status2018-PH-1007-002-COpenClosedClosed on March 30, 2021
Develop and implement controls to prevent and detect conflict-of-interest situations.
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Status2018-PH-1007-003-AOpenClosed$171,822.00Questioned 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 March 30, 2023Provide documentation to show that products and services totaling $171,822 were purchased at fair and reasonable prices. For any amounts determined to be unreasonable and not supported, the Authority should reimburse the program from non-Federal funds.
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Status2018-PH-1007-003-BOpenClosed$170,784.00Questioned 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 March 30, 2023Reimburse its program $170,784 from non-Federal funds for the ineligible salary payments and ongoing security payments.
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Status2018-PH-1007-003-COpenClosedClosed on March 30, 2021
Develop and implement controls over its procurement actions to ensure that prices paid for goods and services are reasonable.
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Status2018-PH-1007-003-DOpenClosedClosed on March 30, 2021
Develop and implement controls to ensure that program funds are used for eligible activities only.
General Counsel
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Status2018-PH-1007-002-DOpenClosedClosed on September 05, 2019
Evaluate the apparent conflict-of-interest situations in this report and pursue administrative sanctions if warranted.