HUD OIG audited the Housing Authority of the City of Fort Lauderdale’s (Authority’s) administration of its Public Housing Capital Fund grants under the American Recovery and Reinvestment Act of 2009. This was an OIG-initiated audit in accordance with OIG’s 2010-2015 strategic plan to contribute to the effective use of Federal funds allocated by the Recovery Act. Our audit objective was to determine whether the Authority administered its Recovery Act capital funds in accordance with Federal requirements by assessing whether (1) its procurement process followed 24 CFR (Code of Federal Regulations) 85.36, (2) expenditures were eligible and supported, and (3) the information published on the Recovery Act Web site was accurate and supported.
The Authority did not fully comply with regulations when procuring goods and services for three contracts. Specifically, it did not perform or document independent cost estimates or cost or price analyses to ensure the reasonableness of contract amounts. This condition occurred because the Authority lacked controls to ensure that staff performed the required cost estimates and analyses. As a result, the U.S. Department of Housing and Urban Development (HUD) could not be assured of the reasonableness of $470,980 expended for the three contracts.
In addition, the Authority mismanaged its Recovery Act Capital Fund grants and did not follow Federal requirements when it failed to comply with obligation requirements, used funds to pay for ineligible and unsupported expenditures, and charged expenditures to the wrong work item. This noncompliance occurred because the Authority did not adequately plan the work of its force account labor and did not have sufficient management and financial controls. These deficiencies resulted in $321,627 in ineligible costs, $33,953 in unsupported costs, and $170,136 in funds to be put to better use.
Further, the Authority did not report accurate job and vendor information on the Recovery Act Web site. This inaccuracy occurred because of staff error and a lack of understanding of the reporting requirements. As a result, the Authority did not provide the public with accurate information on how Recovery Act dollars were spent.
OIG recommended that the Director of the Miami Office of Public Housing require the Authority to (1) provide documentation to support that the contract costs of $470,980 were reasonable; (2) repay $321,627 to the U.S. Treasury for work that was not approved in its annual statement and for work charged to Recovery Act grants that was paid for by another Federal grant; and (3) implement controls to ensure that Capital Fund expenditures are consistent with the work identified in its annual statement, that sufficient documentation is maintained to show the scope of work, work performed, specific location of work, total cost, and funding source used to pay for the work, and expenditures are properly classified to the correct work item account code.