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Hotline

Report Fraud, Waste and Abuse
September 21, 2017
  • Public and Indian Housing
2017-BO-1007
2017-BO-1007.pdf

We audited the public housing and Housing Choice Voucher programs at the Housing Authority of the City of Hartford, CT, as a result of a hotline complaint alleging potential noncompliance with procurement requirements.  The objective of the audit was to determine whether the Authority complied with U.S. Department of Housing and Urban Development (HUD) and Federal procurement requirements and the Authority’s procurement policy.

The allegation in the complaint regarding the potential noncompliance with procurement requirements was valid.  Authority officials did not always (1) comply with HUD and Federal procurement requirements and their procurement policy and (2) ensure that costs did not exceed contract terms.  These deficiencies occurred because Authority officials did not have adequate procedures and controls in place.  Also, Authority officials and their procurement consultant were not always aware of or disregarded procurement requirements.  In addition, Authority officials did not have an adequate system in place or a complete and accurate contract register to ensure that contracts did not exceed the contract terms.  As a result, they paid more than $2.5 million in unsupported costs and more than $1.5 million in ineligible costs and may pay more than $1.6 million in additional funds that may not have been properly awarded.

We recommend that the Hartford Office of Public Housing’s program center coordinator require Authority officials to (1) support that more than $2.5 million in funds paid were reasonable and allowable or repay the unsupported amount from non-Federal funds; (2) repay from non-Federal sources more than $1.5 million in ineligible funds paid when costs exceeded contract terms and were paid on expired contracts; (3) determine that more than $1.6 million in additional funds not yet spent on contracts are reasonable and allowable or reallocate the funds to the appropriate programs and reprocure the services, as necessary; and (4) strengthen internal controls and procedures over procurement and establish effective systems for contract administration

Recommendations
Recommendation Status Date Issued Summary
2017-BO-1007-001-A Closed September 21, 2017 Support that $2,533,377 in costs were reasonable and allowable program expenses in accordance with requirements or repay from non-Federal funds the appropriate programs any amounts they cannot support.
2017-BO-1007-001-B Closed September 21, 2017 Repay the appropriate programs from non-Federal funds the $1,524,604 in ineligible funds paid when costs exceeded contract terms.
2017-BO-1007-001-C Closed September 21, 2017 Determine the appropriateness of the remaining balance of $1,242,154 on unsupported contracts to ensure costs were reasonable, reprocure the subject contracts, or reallocate the funds to the appropriate program.
2017-BO-1007-001-D Closed September 21, 2017 Reprocure expired service contracts to ensure estimated balances of $375,526 are used on eligible contract.
2017-BO-1007-001-E Closed September 21, 2017 Reprocure any service contracts necessary and ensure that the contracts are properly awarded in accordance with HUD requirements.
2017-BO-1007-001-F Closed September 21, 2017 Strengthen and implement controls and procedures over procurement, including monitoring consultants, to ensure that procurement activities meet HUD requirements.
2017-BO-1007-001-G Closed September 21, 2017 Establish and implement an effective system to ensure that payments do not exceed approved contract values.
2017-BO-1007-001-H Closed September 21, 2017 Establish and implement an effective system to maintain a complete and accurate contract register to ensure proper contract planning and administration.
2017-BO-1007-001-I Closed September 21, 2017 Provide technical assistance to the Authority to ensure that responsible staff and board members receive necessary procurement training.