We audited the Housing Authority ofthe City of Stamford, CT's administration of its Federal housing programs based on an anonymous complaint. Federal programs included Operating Fund, Section 8 programs (including the Housing Choice Voucher program, Section 8 Moderate Rehabilitation program, and Section 8 Moderate Rehabilitation Single Room Occupancy
program), and Capital Fund programs. The Authority was also awarded an American Recovery and Reinvestment Act grant in 2009 and HOPE VI Revitalization grant in 2003. Our objective was to determine whether the Authority followed U.S. Department of Housing and Urban Development (HUD) requirements and its own policies and procedures in the administration of its Federal housing programs.
The Authority did not properly administer its Federal programs in accordance with HUD requirements, Federal regulations and laws, its own policies and procedures and its annual contributions contracts. Specifically, it failed to
• Fully reconcile its interprogram transactions in its revolving fund account;
• Maintain adequate suppolting documentation to demonstrate that it
properly charged salaries and associated costs;
• Comply with HUD procurement regulations and its own procurement
• Pay only eligible, supported, and necessary program expenses;
As a result, the Authority 1) improperly wrote off a $2.6 million dollar interprogram imbalance as a prior period adjustment, and had more than $7.5 million in unsuppOlted transactions recorded in its interprogram accounts, 2) could not show that at least $7.6 million in salaries and related costs were properly charged to federal programs, 3) could not demonstrate that more than $2.5 million in contract costs charged to Federal programs were reasonable program expenses, 4) paid more than $95,000 in questioned costs charged to federal programs that were not eligible or supported program expenses. Further, based on the nature and extent of the multiple significant areas of noncompliance,
the Authority may be in substantial default with its annual contributions contracts? Additionally, the lack of adequate internal controls in place at the Authority put it at a higher risk for potential fraud, waste, and abuse.
We recommend that the Program Center Coordinator of HUD's Hartford Office of Public Housing inform the Deputy Assistant Secretary for Public and Indian Housing for Field Operations of the Authority's potential substantial default with section 17 of tile Annual Contributions Contract and require the Authority to (1) support more than $17.7 million in unsupported costs identified during the audit related to interfund transactions, cost allocation, procurement, and questionable disbursements; (2) repay any amounts it cannot support; and (3) repay the $49,095 in ineligible costs identified during the audit. We also recommend that HUD provide technical assistance to the Authority to establish an effective procurement system and that the Authority's management and staff are properly trained regarding Federal procurement requirements.
Finally, we recommend that the Director of HUD's Depmtmental Enforcement Center review the actions of the Authority's board of commissioners, executive
director, former executive director, and consultants and take appropriate administrative actions if warranted.