In response to a congressional and U.S. Department of Housing and Urban Development (HUD) request to review allegations of corruption and mismanagement, we audited the Lafayette Parish Housing Authority’s (Authority) operations of its (1) public housing program and (2) Disaster Housing Assistance Program (DHAP). Our objective was to determine whether the Authority operated in accordance with HUD’s and other requirements. Specifically, we wanted to determine whether the Authority (1) complied with requirements in the procurement and monitoring of its contracts and (2) ensured that its contracts were reasonable and necessary.
The Authority neither properly administered its contracting activities, as it violated a number of HUD procurement requirements, nor ensured that its contracts were reasonable and necessary. The Authority also paid its contractors, including its DHAP contractors (1) outside of specified contract timeframes, (2) in excess of specified contract amounts, and (3) excessive contract increases. These conditions occurred because the Authority did not have adequate controls, as it did not maintain (1) a procurement policy that was consistent with Federal regulations, (2) a contract administration system to ensure that its contractors performed according to contract terms, (3) a written code of standards of conduct governing the performance of its employees engaged in the award and administration of contracts, (4) a contract register, and (5) written contract monitoring policies and procedures, or have a contract monitor. In addition, the Authority did not perform cost or price analyses. Further, it did not (1) have adequately trained staff, adequate staffing levels or oversight, and was poorly managed. As a result, it could not provide reasonable assurance that more than $2.9 million in disbursements from its operating and/or capital fund was spent properly; protected from fraud, waste, and abuse; or used to benefit program participants.
The Authority also did not always ensure that its contracts were reasonable and necessary. This condition occurred because the Authority did not perform cost or price analyses or ensure that its procedures provided for a review of proposed procurements to avoid the purchase of unnecessary or duplicative items as required. As a result, the Authority could not provide reasonable assurance that HUD funds were used (1) effectively and efficiently or (2) to benefit program participants. In addition, HUD funds may have been exposed to fraud, waste, and abuse.
We recommend that HUD’s Deputy Assistant Secretary for Field Operations require the Authority to (1) support or repay from non-Federal funds the portion of the more than $2.9 million in operating and/or capital funds that it cannot support; (2) modify its procurement policy to reflect applicable State and local laws and regulations and applicable Federal laws; (3) implement additional internal controls related to its procurement and monitoring activities including, maintaining a contract administration and written code of standards governing the performance of its employees; (4) ensure that its staff attend HUD-approved procurement training, which includes contract administration and oversight; (5) ensure that it maintains adequate levels of competent staff; (6) immediately cease payments to the DHAP accounting specialist working without an executed contract and support or repay any amounts that it cannot support from non-Federal funds for funds disbursed after the contract expired; and (7) remain under HUD receivership for at least a year or until it can demonstrate to HUD that its procurement and other practices consistently meet Federal requirements. After the HUD receivership is lifted and an Executive Director is hired, HUD should place the Authority on a zero dollar threshold, for at least a year or until it can demonstrate to HUD that its procurement and other practices consistently meet Federal requirements. In addition, we recommend that the Director of HUD’s Departmental Enforcement Center take appropriate administrative action, up to and including debarment, against the former deputy director.
We also recommend that HUD’s Deputy Assistant Secretary for Field Operations require the Authority to (1) perform a cost or price analysis in connection with every procurement action and (2) review proposed procurements to avoid the purchase of unnecessary or duplicative items.