In accordance with our goal to review funds provided under the American Recovery and Reinvestment Act of 2009 (Recovery Act), we audited Albuquerque Housing Services’ (Housing Services) Public Housing Capital Fund Stimulus (formula) Recovery Act-funded activities. Our audit objectives were to determine whether Housing Services (1) properly obligated and expended its Recovery Act formula grant in accordance with requirements, (2) followed the Recovery Act requirements when procuring contracts for goods or services, (3) maintained inventory controls over its fixed assets to ensure that Recovery Act funds were used efficiently, and (4) accurately reported its Recovery Act activities.
Housing Services mismanaged its Recovery Act formula grant. Specifically, it did not properly obligate its Recovery Act formula grant in accordance with requirements, did not ensure that proper approval was obtained for disbursements exceeding $25,000, did not properly procure contracts, and did not maintain inventory controls over its fixed assets. However, it did ensure that expenditures were properly supported, and it properly reported its Recovery Act activities. Housing Services mismanaged its grant because its management disregarded Federal and City of Albuquerque (City) requirements and lacked policies to ensure compliance. As a result, Housing Services entire grant of more than $1.8 million was ineligible and unsupported.
We recommend that the U. S. Department of Housing and Urban Development (HUD) rescind more than $1 million in ineligible costs and deposit those funds with the U.S. Treasury in accordance with the Recovery Act as amended. Further, HUD should require Housing Services to support or repay to the U.S. Treasury $711,294 in unsupported costs and adopt policies, procedures, and internal controls. Additionally, HUD should place Housing Services under direct review for procurements and provide technical assistance and monitoring.