The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the East St. Louis Housing Authority’s (Authority) Public Housing Capital Fund program. Our audit objective was to determine whether the Authority had proper support for its capital fund draws. We concluded that the Authority drew down grant funds for ineligible items and without adequate support. Specifically, it made unsupported draws, excessive administration draws, draws for force account labor without prior approval, draws above the invoiced amount, and duplicate draws. As a result, HUD has no assurance that $171,687 in capital funds was properly spent.

We recommend that HUD require the Authority to provide adequate support for the $90,534 drawn for unsupported costs or repay the funds. Additionally, we recommend that HUD require the Authority to repay the $81,153 in ineligible draws and calculate and repay additional ineligible draws outside our audit period. Finally, we recommend that HUD require the Authority to develop and implement procedures for assembling and maintaining adequate documentation before submitting vouchers.