We audited the Sanford Housing Authority (Authority) to assess certain issues raised in a congressional referral. The referral alleged improper use or mismanagement of the Authority’s public housing, American Recovery and Reinvestment Act, and Section 8 Housing Choice Voucher program funds. The audit objectives were to determine whether the Authority properly used and accounted for public housing, Recovery Act, and Section 8 funds.

We questioned the use of more than $1.2 million, which the prior executive director and board spent or allowed to be spent for costs that were abusive or ineligible, not reasonable, or not properly supported. The audit also identified inadequate controls over reimbursements due from other housing agencies for the Housing Choice Voucher program. Some of the expenditures diverted funds that could have been used to address some of the projects’ repair needs. The audit detected some of the same types of significant findings or concerns mentioned in past reviews of the Authority’s operations conducted by HUD and the Authority’s independent auditors. These conditions occurred because the prior executive director and board failed to properly manage the Authority’s operational and financial affairs. As a result, HUD is now obligated to spend more than $9 million to relocate tenants and demolish public housing units that might have been preserved through proper management of project operations.

We recommend that the Director of the Departmental Enforcement Center initiate appropriate administrative (such as suspensions, debarments, or limited denials of participation) or civil action against the Authority’s prior executive director, past board chairperson, and an employee, who were responsible for the long-term mismanagement or abuse of the Authority’s public housing and Section 8 program funds or operations. We also recommend that the Director of HUD’s Jacksonville Office of Public Housing require the Authority to assess the $1.2 million questioned by the audit and to (1) seek recovery from the appropriate individuals for the questionable or abusive use of Authority funds, (2) reimburse ineligible costs and unnecessary redevelopment plan costs, (3) determine the reasonableness of costs that were not properly procured and to reimburse amounts determined to have been excessive, and (4) reimburse costs that were not properly supported if it cannot establish that the costs were reasonable and necessary. We also recommend that the Director require the Authority to ensure that it has collected the full amounts due from other housing agencies for portable tenants, improve controls and procedures over the use of its credit cards, and provide adequate training for its board members.