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We audited the Palm Beach County Housing Authority in West Palm Beach, FL, based on concerns raised by news articles stating that the Authority dismissed its former executive director because of financial misconduct and ethical violations.  The concerns included bonuses paid and payments for contracted services.  Our audit objective was to determine whether the Authority spent U.S. Department of Housing and Urban Development (HUD) funds for eligible program purposes and sufficiently supported its expenditures, focusing specifically on executive and employee compensation and expenditures for contract services.  The audit is consistent with our strategic goal to ensure the integrity of and accountability for program funds.

The Authority did not support and spend HUD funds in accordance with Federal regulations.  It did not ensure that Sections 8 and 9 funds were not used to pay for executive compensation exceeding the salary limit.  The excess payment was caused by the Authority’s improper classification of funds from two accounts as non-Sections 8 and 9 and then using those funds to pay for executive compensation.  In addition, expenditures to one contractor were not eligible.  The ineligible payment was caused by the Authority’s not having written policies and procedures to prevent such payments from occurring.  These deficiencies resulted in $67,377 in questioned costs.

We recommend that the Director of HUD’s Miami Office of Public Housing require the Authority to (1) reimburse its program for the $62,377 from non-Federal funds, (2) reimburse the U.S. Treasury $5,000 from non-Federal funds for the ineligible payments made, and (3) develop and implement written policies and procedures to ensure that Sections 8 and 9 funds are not used to pay for excess executive compensation and to provide detailed guidance to its staff on the payment review process.

Recommendations

Key Details
(mouse over or click items for details)
  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Public and Indian Housing

  •   2019-AT-1006-001-A
    $62,377.00

    Closed on Enero 04, 2021

    Reimburse its program from non-Federal funds for the $62,377 used to pay for the excess executive compensation.

  •   2019-AT-1006-001-B

    Closed on Enero 19, 2021

    Develop and implement written policies, procedures, and other financial controls to ensure that Sections 8 and 9 funds are not used to pay for compensation over the salary limit.

  •   2019-AT-1006-001-C
    $5,000.00

    Closed on Diciembre 20, 2019

    Reimburse the U.S. Treasury from non-Federal funds for the $5,000 in ineligible costs paid to its contractor.

  •   2019-AT-1006-001-D

    Closed on Enero 19, 2021

    Develop and implement written policies and procedures for the payment review process to comply with applicable regulations in 2 CFR Part 200.

  •   2019-AT-1006-001-E

    Closed on Enero 07, 2021

    Train its staff on its newly developed policies and procedures noted in recommendations 1B and 1D.