We audited the Housing Authority of the City of Annapolis’ Resident Opportunities and Self-Sufficiency (ROSS) program due to a hotline complaint. The complaint alleged that the Authority used ROSS grant funds to pay a resident who did not work on a grant. This is the first of two audit reports on the Authority. Our objective was to determine whether the Authority administered its ROSS program in accordance with applicable U.S. Department of Housing and Urban Development (HUD) requirements.
The Authority did not always administer its ROSS program in accordance with applicable HUD requirements, and the allegation in the complaint had merit. Specifically, the Authority did not maintain documentation to support program accomplishment data reported to HUD for two grants with drawdowns totaling $292,611 and salary and fringe benefit costs totaling $109,248 paid to its service coordinator for one grant. It also incurred $6,850 in ineligible costs for training that HUD had not approved in advance as required for two grants and $3,400 in ineligible costs for payments to a public housing resident who did not perform duties related to a grant. In addition, the Authority could not support in-kind service contributions from community partners totaling $243,750 as required. These conditions occurred because the Authority was not aware of requirements and lacked controls over its tenant councils and service coordinators administering the program. As a result, the Authority could not show that disbursements totaling $401,859 complied with program requirements, and it incurred ineligible expenses totaling $10,250.
We recommend that HUD require the Authority to provide documentation to support program accomplishments related to disbursements totaling $292,611 and salary and fringe benefit costs totaling $109,248 or repay HUD from non-Federal funds for any amounts that it cannot support. We also recommend that HUD require the Authority to repay $6,850 from non-Federal funds for the ineligible training costs and $3,400 for the ineligible payments to a public housing resident. We further recommend that HUD require the Authority to develop and implement policies, procedures and controls to ensure that (1) it complies with program and financial reporting requirements, (2) tenant councils and service coordinators administering the grants comply with applicable requirements, and (3) in-kind contribution amounts are verified.