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The Elkton Housing Authority, Elkton, MD, Did Not Comply With HUD Regulations in Obligating and Disbursing Recovery Act Capital Funds

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We audited the Elkton Housing Authority (Authority) because it received Public Housing Capital Fund Recovery Act grant (grant) funding as part of the American Recovery and Reinvestment Act of 2009 (Recovery Act). Our objective was to determine whether the Authority obligated and disbursed capital funds received under the Recovery Act according to the requirements of the act and applicable U.S. Department of Housing and Urban Development (HUD) rules and regulations.

The Authority did not comply with HUD regulations in obligating and disbursing capital funds. Specifically, it (1) did not award a contract totaling $124,875 in accordance with its request for proposals, (2) did not ensure that goods used for its Recovery Act project complied with the “buy American” requirement, and (3) improperly drew down $28,695 for administrative costs before incurring Recovery Act expenditures. It also did not accurately report the number of jobs created as a result of its Recovery Act projects.

We recommend that the Director, Baltimore Office of Public Housing, require the Authority to provide documentation to support the evaluation of proposals and the selection of the contractor or reimburse HUD $124,875 from non-Federal funds. We further recommend that the Director require the Authority to provide documentation to support that goods used for its Recovery Act project were produced in the United States. We also recommend that the Director require the Authority to provide documentation to support the administrative cost requested and received or reimburse HUD $28,695 from non-Federal funds. Lastly, the Authority needs to develop and implement adequate procedures to ensure that Recovery Act activities meet HUD requirements.