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Documento

We audited Warm Springs Housing Authority (Authority) as part of our review of the Office of Native American Programs' guidance on calculating program income for United States Housing Act of 1937 (1937 Act) housing projects assisted by the Native American Housing Assistance and Self Determination Act of 1996 (NAHASDA). The objective of the audit was to determine whether the Authority calculated program income for NAHASDA-assisted 1937 Act properties in accordance with applicable U.S. Department of Housing and Urban Development (HUD) guidance, regulations, and requirements and to observe uses of revenue from NAHASDA-assisted 1937 Act properties.

The Authority did not have an adequate accounting process and system in place to accurately allocate income from 1937 Act properties receiving Indian Housing Block Grant program assistance between the 1937 Act and Indian Housing Block Grant programs. It failed to track cumulative NAHASDA modernization expenses for each property as required by PIH Notice 2000-18, section 3.4 and did not allocate the property's share of income attributable to the NAHASDA Indian Housing Block Grant program. Further, it did not properly credit insurance proceeds and did not have a system to track restricted nonprogram income removed from its Mutual Help program. This condition occurred because the Authority had not made it a priority to establish an accounting system to allocate income attributable to the 1937 Act and Indian Housing Block Grant programs. As a result, it inappropriately removed more than $1.4 million in low-income housing receipts from HUD monitored NAHASDA affordable housing activities during the period 1998 to 2006. Additionally, the Authority used restricted funds to pay for $204,456 in unsupported travel expenses. The low-income housing receipts removed from the program with HUD's consent were used to repay monitoring findings related to unsupported compensation of housing officials and unsupported travel expenses. Other uses of nonprogram income included unallowable bad debt, personal expenses on Authority credit cards, miscellaneous HUD-rejected expenses, and maintenance of tribal housing outside the NAHASDA program.

We recommend that HUD require the Authority to (1) establish an accounting system that allocates income attributable to the NAHASDA program and documents the total cost of NAHASDA-funded rehabilitation and capital improvements, by 1937 Act unit, from 1998 forward or return $1.4 million, which was previously withdrawn from 1937 Act revenue as nonprogram income, to the NAHASDA program; (2) reconcile insurance proceeds and ensure that they are credited to NAHASDA-eligible activities for any policy paid using NAHASDA funds or policies covering NAHASDA-assisted units; (3) establish a separate accounting for Mutual Help program proceeds of sale to ensure proper restriction on the use of those funds, and (4) complete repayment of $204,456 in unsupported travel expenses questioned during a 2003 Office of Native American Programs monitoring review.