We conducted an audit of the Irvington Housing Authority’s (Authority) Capital Fund programs. The audit objectives were to determine whether Authority officials (1) obligated and expended its Capital Funds in accordance with U.S. Department of Housing and Urban Development (HUD) regulations, (2) had a financial management system in place that complied with program requirements and (3) whether the allegations in an anonymous complaint could be substantiated.

Authority officials did not always administer the Capital Fund programs in accordance with HUD regulations. Specifically, (1) controls over procurements were not adequate, and (2) Capital Fund and Capital Fund Financing Program funds were expended without adequate support and for ineligible items due to inadequate controls. As a result, goods and services were not obtained in the most economical or efficient manner, funds were not properly safeguarded as expenses were unsupported or ineligible, and funds disbursed were not properly recorded. Consequently, more than $2.4 million in expenses was unsupported, and $209,391 was ineligible.

In addition, the Authority’s financial management system did not always comply with program regulations. As a result, the Authority did not adequately account for and safeguard program funds, and $132,337 was inappropriately charged to the Section 8 program. The allegations in the complaint regarding inadequate management controls appeared to be valid.

Lastly, we recommend that the Director of the New Jersey Office of Public Housing require Authority officials to provide supporting documentation so that HUD can determine the eligibility of more than $2.4 million in questioned costs, repay $209,391 in ineligible disbursements along with any additional amounts determined to be ineligible, and establish adequate controls to ensure compliance with program requirements.