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We audited the Columbus Metropolitan Housing Authority’s Public Housing Operating and Capital Fund programs based on an anonymous complaint to our hotline.  Our audit objective was to determine whether the Authority administered its programs in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements.

The Authority invested Federal funds in non-HUD-approved investment accounts and did not properly record the proceeds from the sale of a public housing property.  As a result, HUD and the Authority lacked assurance that nearly $21 million in Federal funds was protected.  Also, nearly $14 million in sales proceeds may not have been available for the intended purposes.

In addition, the Authority could not support the source of funds for a loan to an affiliated entity.  As a result, HUD and the Authority lacked assurance that $261,990 in Federal funds was available for program purposes.

The Authority did not comply with HUD’s procurement requirements for one contract.  It also used non-Federal funds to pay Capital Fund expenses and inappropriately used capital funds as reimbursement.  As a result, HUD and the Authority lacked assurance that more than $263,000 in capital funds used to pay for the contract was reasonable and that the Authority did not incur and pay expenses before the obligation start date of its Capital Fund grants.

We recommend that the Director of HUD’s Cleveland Office of Public Housing require the Authority to procure and use HUD-approved investment accounts for Federal funds, ensure that sales proceeds are maintained in a restricted account, support the source of funds for the loan and the reasonableness for one contract or reimburse its program from non-Federal funds, and implement adequate procedures and controls to address the findings cited in this audit report.