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We audited the Hamtramck Housing Commission’s American Recovery and Reinvestment Act of 2009 Public Housing Capital Fund competitive grant.  We selected the Commission based upon our analysis of the risk factors relating to public housing agencies in Region 5’s  jurisdiction.  Our objective was to determine whether the Commission administered its grant in accordance with Recovery Act, the U.S. Department of Housing and Urban Development’s (HUD), and its own requirements.  This is the second of two audit reports on the Commission’s Recovery Act grants.

The Commission did not comply with Recovery Act, HUD’s, or its own requirements.  Specifically, it (1) improperly awarded a noncompetitive Recovery Act-funded contract, (2) lacked support for the reasonableness of the price paid for its Recovery Act-funded activities, and (3) used Recovery Act funds to pay for work activities that were not included in its approved annual or 5-year action plan.  As a result, the Commission subverted full and open competition, and both HUD and the Commission lacked assurance that more than $1.1 million in Recovery Act competitive grant funds was used appropriately. 
Further, the Commission did not (1) support that the upgrades to its electrical utilities resulted in purported energy savings; (2) issue payments to its contractor in accordance with HUD’s requirements; (3) ensure that its contractors complied with the buy American, Section 3, and Davis-Bacon Act requirements of the Recovery Act; and (4) file the required declaration of trust.  It also did not accurately report its Recovery Act grant activities in FederalReporting.gov.  As a result, HUD and the Commission lacked assurance that its Recovery Act competitive grant was administered in accordance with HUD’s requirements.

We recommend that HUD require the Commission to (1) support or reimburse HUD more than $1.1 million from non-Federal funds, for transmission to the U.S. Treasury, for not complying with Federal procurement and Recovery Act requirements and (2) implement adequate procedures and controls to address the issues cited in this audit report.