We audited the Housing Authority of Plainfield, NJ’s administration of its public housing programs. We selected the Authority based on a risk analysis of public housing agencies in New Jersey that considered the size of the agency, the amount of operating and capital funds received, and previous work conducted by the Office of Inspector General. The objective of the audit was to determine whether the Authority administered its Public Housing Operating Fund and Capital Fund programs in accordance with U.S. Department of Housing and Urban Development (HUD), Federal, and Authority requirements.
The Authority did not always comply with Federal, HUD, State, and Authority requirements when administering its public housing programs. Specifically, the Authority (1) made an unauthorized disposition of property by entering into a long-term rooftop lease and did not properly handle nearly $1.3 million in related proceeds and (2) did not comply with procurement requirements when purchasing $4.1 million in goods and services. These conditions occurred because the Authority did not fully understand its relationship with HUD and requirements for property disposition, related proceeds, and procurement and because it did not have adequate controls in place. As a result, (1) HUD did not have assurance that its interest and investment were adequately protected and that $1.3 million in rooftop lease proceeds was properly accounted for and used for planned, approved purposes, and (2) the Authority paid nearly $2.9 million in unsupported costs and may pay an additional $1.2 million for procurements not adequately performed and documented.
We recommend that HUD require the Authority to (1) terminate the current rooftop lease; (2) remedy the reporting and use of proceeds issues related to the nearly $1.3 million in proceeds received under the lease; (3) repay from non-Federal funds any proceeds used for unallowable expenses; (4) obtain HUD approval of any new lease agreement; and (5) implement controls to ensure compliance with requirements for third-party agreements and that disposition proceeds are properly accounted for and used. Further, we recommend that HUD require the Authority to (1) support that nearly $2.9 million paid for goods and services was reasonable in accordance with applicable requirements or repay from non-Federal funds any amount that it cannot support; (2) support that $1.2 million in funds not yet spent on the contracts reviewed, along with any new procurements, would be reasonable or reallocate the funds; (3) ensure that its staff receives training on applicable requirements; and (4) improve its controls to ensure that future procurement actions comply with requirements and that prices paid for goods and services are reasonable.