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We audited the Springfield Housing Authority’s Public Housing Operating Fund and Capital Fund programs because the Authority ranked fifth highest on our risk assessment of Massachusetts public housing agencies and is the third largest in the State. In addition, we had not audited the Authority in more than 10 years. The objective of the audit was to determine whether the Authority complied with procurement and contract administration requirements for its Public Housing Operating Fund and Capital Fund programs.

Authority officials did not always comply with Federal procurement requirements and their own procurement policy. Specifically, they did not always adequately perform and document procurement, and contract terms were not always consistent with other procurement documents. In addition, Authority officials did not always comply with contract administration requirements. Specifically, they did not always ensure that (1) contract amounts were not exceeded, (2) change orders were approved in a timely manner, and (3) completion documents were submitted as required. These conditions occurred because Authority officials did not always follow their procurement policies and were not always aware of Federal procurement requirements due to a lack of training. Further, the Authority had inadequate controls to ensure that it adequately documented the history of the procurements and did not exceed contract amounts. As a result, the Authority incurred $37,941 in ineligible costs, $916,132 in unsupported costs, and $408,968 in unspent funds that may need to be reallocated.

We recommend that the Director of the U.S. Department of Housing and Urban Development’s Boston Office of Public Housing require Authority officials to (1) repay from non-Federal funds the $37,941 in ineligible costs, (2) support that $916,132 spent on contracts was fair and reasonable or repay the funds, (3) support that $408,968 in funds not yet spent on contracts was fair and reasonable or reallocate the funds, (4) establish and implement adequate record-keeping procedures to comply with Federal procurement requirements, and (5) establish and implement adequate controls so the Authority does not exceed the contract amount without appropriate contract amendments and approvals.

 

Recommendation Status Date Issued Summary
2020-BO-1002-001-A Cerrado Marzo 19, 2020 Support that $916,132 spent on contracts was fair and reasonable in accordance with Federal requirements or repay the Operating Fund or Capital Fund program from non-Federal funds any amount that cannot be supported.
2020-BO-1002-001-B Cerrado Marzo 19, 2020 Support that $408,968 in funds not yet spent on contracts would be fair and reasonable or reallocate the funds to ensure that they will be put to their intended use.
2020-BO-1002-001-C Cerrado Marzo 19, 2020 Reprocure any contracts for which cost reasonableness cannot be supported and contracts were not properly awarded to ensure compliance with HUD requirements.
2020-BO-1002-001-D Cerrado Marzo 19, 2020 Ensure that all Authority staff members working with procurements and contract administration receive Federal procurement training.
2020-BO-1002-001-E Cerrado Marzo 19, 2020 Establish and implement adequate record-keeping procedures to comply with Federal procurement requirements, including a checklist for the file to ensure that they complete all procurement requirements and receive all required documents.
2020-BO-1002-001-F Cerrado Marzo 19, 2020 Ensure that all architectural and engineering contracts or task orders awarded during our audit period are reviewed for cost reasonableness.
2020-BO-1002-002-A Cerrado Marzo 19, 2020 Repay the Operating Fund program from non-Federal funds for the $37,941 in ineligible costs when the amount paid exceeded the contract value.
2020-BO-1002-002-B Cerrado Marzo 19, 2020 Establish and implement adequate controls so the Authority does not exceed the contract amount without appropriate contract amendments and written approvals.
2020-BO-1002-002-C Cerrado Marzo 19, 2020 Establish and implement adequate controls to obtain all of the required project completion documentation prior to final payment.