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We audited the Housing Authority of the City of Asbury Park based on our risk analysis of public housing agencies located in the State of New Jersey.  The objective of the audit was to determine whether the Authority administered its Public Housing Operating and Capital Fund programs in accordance with applicable U.S. Department of Housing and Urban Development (HUD), Federal, and Authority requirements.

The Authority did not always administer its operating and capital funds in accordance with HUD, Federal, and Authority requirements.  Specifically, the Authority did not (1) adequately support nearly $1.3 million paid to the Long Branch Housing Authority for technical, administrative, maintenance, and redevelopment services; (2) follow applicable requirements when purchasing more than $451,000 in goods and services; and (3) properly support $119,409 in Capital Fund grant obligations.  It also improperly used operating funds to pay a settlement with the State of New Jersey.  These issues occurred because the Authority did not have adequate controls in place and because Long Branch did not fully understand requirements related to procurement, Capital Fund grant obligations, and allowable Public Housing Operating Fund program expenses.  As a result, HUD did not have assurance that (1) nearly $1.3 million paid to Long Branch was for eligible, reasonable, necessary, and allocable costs; (2) more than $451,000 paid for goods and services was for reasonable prices and related to valid contracts; (3) $119,409 in capital funds would be used for eligible activities in a timely manner; and (4) $75,722 was available to the Authority to operate and fulfill its mission. 

We recommend that HUD require the Authority to (1) provide documentation to show that (a) nearly $1.3 million paid to Long Branch was for eligible, reasonable, necessary, and allocable costs; (b) more than $451,000 paid for goods and services was reasonable and related to valid contracts that were in place before disbursements were made; and (c) $119,409 in obligations was supported; (2) reimburse $75,722 for the settlement payment; (3) update its policies and procedures to ensure (a) that additional payments for technical, administrative, maintenance, and redevelopment services are adequately supported and that services were provided in accordance with requirements; (b) compliance with HUD and Federal procurement requirements; and (c) that capital funds are obligated in a timely manner and adequately supported.