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Report Fraud, Waste and Abuse
August 17, 2007
  • Public and Indian Housing
2007-NY-1011
2007-NY-1011.pdf

What We Audited and Why

Based on an Office of Inspector General (OIG) risk analysis, we audited the Hoboken Housing Authority's (Authority) Public Housing Capital Fand (capital fund) program and its disbursement process. The audit objectives were to determine whether (1) the Authority administrated its capital grant program in accordance with applicable U.S. Department of Housing and Urban Development (HUD) laws and regulations and (2) payments to the City of Hoboken (City) for police services were reasonable and supported.

What We Found

The Authority did not adequately administer its capital grant program. It used $818,534 of its fiscal years 2000 through 2003 capital grant funds to pay administrative and management improvement costs in excess of the limitations imposed by HUD. The Authority transferred a total of $637,039 from its fiscal years 2003-01, 2004, and 2005 capital grants to pay operating expenses for its low-rent public housing program. These deficiencies occurred because the Authority did not have sufficient funds in the low-rent public housing program to pay the operating expenses.

Further, the Authority made total payments of $333,244 to the City for police services without obtaining or maintaining adequate and complete documentation to support the payments. This problem occurred because the Authority neither obtained nor reviewed the supporting documents, such as invoices and police activity and payroll reports, before it made monthly payments to the City for police services.

What We Recommend

We recommend that the director of the New Jersey Office of Public Housing instruct the Authority to (1) reimburse the capital fund program $818,536, (2) reduce the Authority's future capital grants by $632,039, (3) transfer $5,000 from the low-rent public housing program to the capital fund program, (4) establish and implement internal control policies and procedures that will prevent funds allocated to site and unit improvements from being used to pay the Authority's operating expenses, (5) provide HUD with adequate and compete documents to support the total payments of $333,244 made to the City for police services and have the City reimburse the Authority or provide the Authority with comparable future services for any payments determined to be unsupported, (6) establish and implement adequate internal control procedures to ensure that the terms of municipal contracts applicable to HUD funds are carried out in compliance with HUD's requirements and federal regulations, and (7) establish and implement internal control procedures to ensure the accuracy of financial information entered into HUD systems such as the Line of Credit Control System and Financial Assessment Submission-Public Housing Authority system.