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In accordance with our regional plan to review public housing programs and because of weaknesses identified during a prior audit by the U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General (OIG), we reviewed the public housing programs of the Kenner Housing Authority in Kenner, LA.  Our overall objective was to determine whether the Authority administered its public housing programs in accordance with regulations and guidance.  This is the second  memorandum under this objective and addresses only the Authority’s procurement and financial operations.  

The Authority did not comply with HUD regulations when administering its procurement and financial operations.  Specifically, it did not always ensure that it (1) properly identified the source of funds used for expenditures or managed its interfund transfers, (2) complied with Federal and its own procurement requirements, (3) adequately supported and ensured the eligibility of payments to contractors, (4) maintained adequate documentation for its petty cash expenditures, and (5) submitted its financial data to HUD within specified timeframes.  These conditions occurred because the Authority lacked written financial management policies before November 2013, and its procurement policy was not consistent with HUD’s requirements.  In addition, the Authority did not have written policies or procedures for processing and accounting for its interfund activities, lacked adequate segregation of duties, and did not properly train or supervise its staff. 

As a result, the Authority (1) mismanaged and could not support more than $1.9 million in interfund transfers (2) made $849 in ineligible and $886,830 in unsupported contractor payments; and (3) paid $1,330 in unsupported petty cash transactions.  Our recommendations include requiring the Authority to (1) repay $849, (2) support or repay more than $2.5 million, (3) reconcile its accounting records to identify the appropriate funding source that should have been charged for each expenditure incurred from January 1, 2009, to October 31, 2013, (4) implement policies and procedures governing its interfund transactions, ensuring that funds are not loaned between its housing programs, transfers are made in a timely manner, and interfund account balances are not present at yearend, and (5) update its procurement policy to include detailed working-level or separate procedures for its staff.

 


1 Audit Memorandum 2013-FW-1804, issued September 24, 2013, addressed the Authority’s Housing Choice Voucher program.

 

ARRA