We audited the Housing Choice Voucher (Voucher) and public housing programs at the Woonsocket Housing Authority (Authority) as part of our annual audit plan. The overall objective of the audit was to determine whether the Authority efficiently and effectively administered its Voucher and public housing programs in compliance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) regulations. In addition, we wanted to determine whether the Authority's board of commissioners (board) had conflicts of interest and whether the Authority established and followed a reasonable policy for travel costs charged to federal programs. Our efforts focused on whether the Authority properly (1) used federal funds to subsidize a separate nonprofit entity; (2) allocated costs and accounting for interfund transactions; (3) adhered to its procurement practices; (4) account for travel per diem rates and travel expense vouchers; and (5) adhered to its waiting lists procedures.
The Authority generally administered the Voucher and public housing programs in compliance with its annual contributions contract and HUD regulations. In addition, HUD's Regional Counsel rendered an opinion that the Authority's board members did not violate conflict-of-interest provisions of section 19(A) of the contract. However, we identified several deficiencies, including $663,413 in unsupported costs and $241,081 in opportunities for funds to be put to better use, because the Authority
Improperly used federal funds to subsidize the development activities of Blackstone,
Did not establish an adequate cost allocation plan for administrative and indirect costs and improperly advanced and used funds between its public housing and Voucher programs,
Did not always comply with HUD procurement regulations and its own procurement policy,
Did not establish a reasonable policy for travel per diem rates charged to federal programs and ensure that board members always submitted travel expense vouchers, and
Did not always follow its HUD-approved waiting list procedures.
We recommend that the Director of the Office of Public Housing require the Authority to (1) cease the practice of improperly using federal funds to pay nonprogram costs and repay $2,608 in unreimbursed funds, (2) provide support for $587,000 in salary expenses and $67,855 in indirect costs charged to the Voucher program or reimburse these costs and cease the practice of advancing and using funds between its federal programs, (3) comply with HUD procurement regulations and its own procurement policy, (4) establish a reasonable policy for travel per diem rates charged to federal programs and ensure that board members always submit travel expense vouchers, and (5) obtain HUD approval on all actions that are contrary to its waiting list procedures.
We also recommend that Authority establish controls to ensure that all interprogram transactions are recorded and reconciled monthly, thereby eliminating the average daily balance of $241,081 that was owed between federal programs during the period January 2005 through June 2007. Further, we recommend that HUD's Departmental Enforcement Center consider sanctions as appropriate against the responsible parties for the improper use of federal funds used to pay nonprogram costs of an affiliated nonprofit entity.