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In accordance with the Office of Inspector General’s (OIG) goal to ensure the integrity and soundness of the U.S. Department of Housing and Urban Development’s (HUD) Public and Indian Housing programs and to follow up on weaknesses identified in another review, we reviewed the Housing Authority of the City of Pearsall, TX, to determine whether it followed Federal procurement and the State of Texas’ requirements when contracting for its interim executive director for calendar years 2014 and 2015.

The Authority improperly procured its interim executive director (contractor) as it failed to follow Federal, State, and its own requirements.  The Authority also lacked support for the reasonableness of its payments to its contractor, and it made payments to the contractor before it awarded the contract and after the contractor resigned.  These conditions occurred because no one took responsibility to ensure that the Authority properly procured and paid for its contractor.  Instead, the board, its attorneys, and its contractor made conflicting statements concerning the procurement and the actions taken.  As a result, the Authority used $138,880 in HUD public housing funds to pay unreasonable and ineligible contract fees. We recommended that Director, Office of Public Housing, San Antonio, TX, require the Authority to receive training on the various requirements, repay ineligible and unreasonable contractor costs totaling $138,880, and follow requirements on future contracts.