The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Housing Authority of the City of Mountain Grove, MO in response to a citizen’s complaint received by our office. Our objective was to determine whether the Authority complied with contract procurement regulations and properly disposed of property assets.

The Authority did not comply with HUD procurement regulations or its own procurement policies. It did not ensure a fair and competitive procurement process, selected the highest quotations without justification, and did not retain records pertinent to the procurement of three contracts. The Authority lacked detailed operational procedures to implement its procurement policies. The Authority also improperly disposed of an Authority vehicle and more than 200 appliances without obtaining board approval, establishing fair value, and consistently documenting the disposal. Management disregarded existing asset management policies, and the Authority lacked detailed operational procedures to implement its policies.

We recommend that the coordinator of the St. Louis Public and Indian Housing Program Center ensure that the Authority develops and implements detailed operational procedures that fully implement its procurement and assets disposal policies. Further, we recommend that HUD require the Authority to provide justification for two awards given to the highest bidder or refund HUD. We also recommend that the Director of HUD’s Departmental Enforcement Center take appropriate administrative actions, up to and including debarment, against the Authority’s board member for her part in the procurement violations cited in this audit report.