We audited the Cumberland Plateau Regional Housing Authority’s HOME Investment Partnerships program because a Russell County, VA, special grand jury investigation resulted in the indictment of four people involved with the Authority’s HOME program. Our audit objective was to determine whether the Authority procured services in accordance with U.S. Department of Housing and Urban Development (HUD) regulations and other applicable requirements.
The Authority did not procure services in accordance with HOME program requirements. It paid three contractors to demolish six houses that were not demolished and maintained a prequalified contractor list, which included contractors that were not properly licensed. The Authority’s 27 client files contained 115 procurement-related violations, and every file contained at least one violation. As a result, the Authority made ineligible payments totaling $312,077 and unsupported payments totaling $308,797 for rehabilitation services that were either not received or not procured in accordance with applicable requirements.
We recommend that HUD direct the grantee to work with the Authority to (1) reimburse the grantee’s program $312,077 from non-Federal funds for ineligible payments; (2) provide documentation to support its use of $308,797 in program funds or reimburse the grantee from non-Federal funds for any payments that it cannot support, and (3) based on the outcome of the State’s investigation and criminal trial, make a referral to HUD recommending administrative sanctions, as appropriate, up to and including debarment of the Authority’s former rehabilitation specialist, the Planning District Commission’s former deputy director, and the involved contractors.