In accordance with our goal to review funds provided under the American Recovery and Reinvestment Act of 2009, we audited the Public Housing Capital Fund Stimulus (formula) Recovery Act-funded activities of the Corpus Christi Housing Authority in Corpus Christi, TX. Our objective was to determine whether the Authority expended Recovery Act funds in accordance with Recovery Act rules and regulations and submitted timely Recovery Act performance reports.

Generally, the Authority complied with Recovery Act requirements. However, it used more than $6,000 in Recovery Act funds for ineligible and unsupported purposes including (1) the purchase of furniture that was not made in America and other furniture, the origin of which was unclear; (2) incidental relocation expenses that it did not support with receipts; and (3) general purpose office supplies. In addition, the Authority could better use more than $2,000 in misallocated Recovery Act salary expenses and impending ineligible relocation expenses. It also submitted one late quarterly performance report. These minor exceptions occurred because the Authority’s program staff was not aware of Recovery Act requirements and the Authority had not implemented effective controls over cost eligibility, cost allocation, and payroll processing. The late performance report was caused by competing work priorities.

We recommend that the Director of the U. S. Department of Housing and Urban Development’s (HUD) Office of Public Housing require the Authority to develop and implement effective controls over its Recovery Act activities to ensure that (1) its payroll processing, purchasing, cost eligibility, and cost allocation comply with Recovery Act and HUD requirements; (2) its staff is aware of program requirements; and (3) only allowable costs are charged to program accounts. Also, the Authority should use non-Federal funds to reimburse $2,173 to the U. S. Treasury, including $660 for furniture that was not made in America in violation of program requirements, $1,450 for ineligible relocation payments, and $63 for ineligible office supplies. Further, the Authority should provide support showing that furniture at Ruthmary Price was made in America or reimburse $4,302 to the U. S. Treasury. Finally, the Authority should change its relocation policy so that it does not incur an additional $1,450 in ineligible relocation payments and reallocate $411 in Recovery Act salaries that it misallocated to the low-rent program and $557 that it misallocated among other Federal and non-Federal programs as indicated by employee timesheets.