We audited the Tuckahoe Housing Authority (Authority) to assess the merits of a complaint and determine whether the Authority administered its low-rent housing program and nonprofit entity activities in accordance with the annual contributions contract and other U.S. Department of Housing and Urban Development (HUD) regulations. The audit disclosed that the Authority did not adequately administer its low-rent program and nonprofit entity activities in accordance with regulations as a result of weaknesses in financial and management controls. These conditions occurred because Authority staff was unfamiliar with HUD regulations. As a result, the Authority incurred ineligible costs of $64,314 and unsupported and unnecessary costs of $198,243. In addition, the Authority's nonprofit entity encountered delays in the construction of a planned senior citizen complex on land approved for disposal by HUD in 1999 for that purpose, and now expects to break ground by November 2008.

We recommend that the HUD Director, Office of Public Housing, New York City field office, instruct the Authority to reimburse ineligible expenses of $64,314, provide documentation to substantiate unsupported costs of $182,547, and provide justification for unnecessary costs of $15,696 so that HUD can determine the reasonableness or necessity of the costs. We also made recommendations to strengthen financial and operational controls to better ensure compliance with HUD regulations and policy.