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Report Fraud, Waste and Abuse
July 23, 2018
  • Public and Indian Housing
2018-AT-1009
2018-AT-1009.pdf

We audited the Pell City and Ragland Housing Authorities’ financial operations.  We began our review of Pell City and Ragland because it aligns with a goal in our annual audit plan to improve the U.S. Department of Housing and Urban Development’s (HUD) execution of and accountability for grant funds.  Our audit objective was to determine whether the Pell City Housing Authority complied with HUD’s regulations regarding the management of its financial operations and its management of the Ragland Housing Authority.

The Pell City Housing Authority failed to follow Federal requirements and its policies governing program execution for both Pell City and Ragland.  Specifically, Pell City did not (1) always administer its and Ragland’s funds in accordance with Federal requirements and its policies and procedures, (2) comply with conflict-of-interest requirements, and (3) always comply with its and Ragland’s housing requirements.  This condition occurred because the Authorities lacked adequate controls and their boards of commissioners lacked the appropriate knowledge of Federal requirements and the Authorities’ guidelines to ensure adequate oversight.  As a result, the Authorities spent more than $1,000 for unallowable costs and disbursed more than $44,000 that was not properly supported. 

We recommend that the Director of HUD’s Birmingham Office of Public and Indian Housing require the Pell City Housing Authority to (1) repay from non-Federal funds the $1,188 for payments made for unallowable costs, (2) provide documentation for costs or repay more than $12,000 from non-Federal funds, (3) comply with conflict-of-interest requirements, and (4) implement adequate procedures and controls to ensure that waiting list applicants are selected in accordance with HUD requirements.  We also recommend that the Ragland Housing Authority (1) repay from non-Federal funds the $105 in payments made for unallowable costs, (2) provide documentation for costs or repay more than $31,000, and (3) implement adequate procedures and controls to ensure that waiting list applicants are selected in accordance with HUD requirements.

Recommendation Status Date Issued Summary
2018-AT-1009-001-A Closed July 23, 2018 The Pell City Housing Authority to reimburse its public housing fund from non-Federal funds $1,188 for payments made for ineligible credit card expenditures.
2018-AT-1009-001-B Closed July 23, 2018 The Pell City Housing Authority to support or reimburse its public housing fund $12,874 ($4,709 $8,165) for unsupported disbursements.
2018-AT-1009-001-C Closed July 23, 2018 The Pell City Housing Authority to fully implement adequate internal controls over its credit card purchases and disbursements to ensure that it complies with Federal requirements and its own policies and procedures.
2018-AT-1009-001-D Closed July 23, 2018 The Pell City Housing Authority to revise its policies and procedures for its review of expenditures to ensure that its board of commissioners documents its enforcement of and the Authority’s compliance with the requirements during its review process to ensure that the Authority’s disbursements are supported and used for eligible expenditures.
2018-AT-1009-001-E Closed July 23, 2018 The Pell City Housing Authority’s board of commissioners to receive training to ensure the proper review and approval of expenditures and to understand the requirements relevant to the Authority’s financial operations.
2018-AT-1009-001-F Closed July 23, 2018 The Ragland Housing Authority to reimburse its public housing fund from non-Federal funds $105 for credit card payments made for ineligible expenditures.
2018-AT-1009-001-G Closed July 23, 2018 The Ragland Housing Authority to support or reimburse its public housing fund $31,580 ($1,320 $11,887 $18,373) for unsupported disbursements.
2018-AT-1009-001-H Closed July 23, 2018 The Ragland Housing Authority to develop and implement adequate internal controls over its credit card purchases and disbursements to ensure that it complies with Federal requirements and its own policies and procedures.
2018-AT-1009-001-I Closed July 23, 2018 The Ragland Housing Authority to develop and implement its own policies and procedures for its review of expenditures to ensure that its board of commissioners documents its enforcement of and the Authority’s compliance with the requirements during its review process to ensure that the Authority’s disbursements are supported and used for eligible expenditures.
2018-AT-1009-001-J Closed July 23, 2018 The Ragland Housing Authority’s board of commissioners to receive training to ensure the proper review and approval of expenditures and to understand the requirements relevant to the Authority’s financial operations.
2018-AT-1009-002-A Closed July 23, 2018 The Pell City Housing Authority to comply with conflict-of-interest requirements or obtain a waiver from HUD or its board of commissioners.
2018-AT-1009-002-B Closed July 23, 2018 The Pell City Housing Authority to develop and implement a policy for the review and approval of timesheets and credit card purchases, which ensures a proper segregation of duties and is approved by its board of commissioners.
2018-AT-1009-003-A Closed July 23, 2018 The Pell City Housing Authority to fully implement procedures and controls to ensure that waiting list applicants are selected in accordance with HUD requirements.
2018-AT-1009-003-B Closed July 23, 2018 The Ragland Housing Authority to fully implement procedures and controls to ensure that waiting list applicants are selected in accordance with HUD requirements.