We audited the Dayton Metropolitan Housing Authority’s Public Housing Capital Fund program. We selected the Authority’s program for audit based on our analysis of risk factors related to public housing agencies in Region 5’s1 jurisdiction. The audit was part of the activities in our fiscal year 2016 annual audit plan. Our objective was to determine whether the Authority complied with the U.S. Department of Housing and Urban Development’s (HUD) and its own procurement requirements.
The Authority did not always comply with HUD’s and its own procurement requirements. Specifically, it did not (1) prepare adequate independent cost estimates for two contracts, (2) maintain documentation to justify the reason for the significant price difference between the independent cost estimate and the contract price for four contracts, and (3) analyze the cost of the additional items included in the scope of work for three contracts. As a result, HUD and the Authority lacked assurance that (1) nearly $406,000 in capital funds expenses was reasonable and (2) nearly $95,000 in capital funds would be used appropriately.
We recommend that the Director of HUD’s Cleveland Office of Public housing require the Authority to support that the (1) costs paid for two contracts that did not have adequate cost estimates were reasonable or reimburse its Public Housing Capital Fund program, (2) cost paid in excess of the independent cost estimate for one contract was reasonable or reimburse its program, (3) cost paid in excess of the independent cost estimate for one contract was reasonable or deobligate the program funds, (4) costs paid for contract modifications for two contracts were reasonable or reimburse its program, and (5) cost paid for contract modifications for one contract was reasonable or deobligate the program funds. We also recommend that HUD requires the Authority to (1) reimburse the U. S. Treasury from its capital fund account for the costs charged to the incorrect budget line item in HUD’s system and (2) implement adequate procedures and controls to address the findings cited in this audit report
1Region 5 includes the States of Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.