We audited the Sanford Housing Authority’s procurement and financial operations. We selected the Authority based on concerns from the U.S. Department of Housing and Urban Development’s (HUD) North Carolina State Office of Public Housing, following a technical assistance review performed. The technical assistance review identified issues with the Authority’s procurement practices and financial operations, among other items. The executive director had assessed the Authority’s operation systems and identified 35 issues. Additionally, our audit is in keeping with our annual audit plan to ensure that public housing agencies sufficiently administer HUD’s programs in accordance with regulations and guidance. Our audit objective was to determine whether the Authority’s performance in the areas of procurement and financial operations met HUD requirements.
The Authority did not comply with HUD’s regulations when administering its procurement and financial operations. Specifically, it (1) failed to adequately procure nine contracts, totaling more than $408,000 (2) lacked adequate controls over its financial records, (3) used more than $7,000 in Federal funds for improper expenses, (4) made more than $3,000 in undocumented purchases with its credit cards and lines of credit, and (5) failed to obtain HUD’s approval to convert a portion of its maintenance shop into a one-unit homeless shelter using $650 in Federal funds. These conditions occurred because the Authority either did not have policies and procedures or they were not adequate to provide proper guidance. In addition, the former executive director and former accounting managers did not follow HUD’s regulations.
We recommend that the Director of Public and Indian Housing require the Authority to (1) support the cost reasonableness of nine contracts or reimburse its programs $408,958 from non-Federal funds, (2) reimburse its programs $7,851 from non-Federal funds, (3) provide adequate support for disbursements or reimburse its programs $3,588 from non-Federal funds, and (4) implement its revised policies and procedures to ensure that the Authority’s staff complies with HUD regulations when administering procurement and financial operations. We recommend that the Director of the Departmental Enforcement Center, in coordination with the Director of the Greensboro HUD Office of Public Housing, take appropriate enforcement action against the former Authority officials responsible for the noncompliance with Federal regulations.