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We audited the Housing Authority of City of Los Angeles’ legal services due to a hotline complaint alleging that the Authority did not properly procure its legal services and alleging questionable legal expenses that violated U.S. Department of Housing and Urban Development (HUD) requirements.  Our audit objective was to determine whether the Authority procured, contracted, and managed its legal services in compliance with HUD requirements.

The allegations about procurement had some merit.  While we did not find issues with the Authority’s competitive procurements, the Authority did not always follow HUD requirements and its intergovernmental agreement when it managed its legal services with the City of Los Angeles.  From July 1993 to June 2018, the Authority did not obtain the required board-approved annual amendments, which would have allowed increased attorney rates for legal services as required by its intergovernmental agreement.  In addition, it did not perform the required annual cost analyses for its intergovernmental legal services agreement with the City.  We attributed these conditions to the Authority’s lack of oversight to ensure compliance with HUD requirements and its intergovernmental agreement.  Of the $983,670 in reviewed legal expenses, the Authority did not ensure that $793,101 in legal services was cost beneficial.

We recommend that the Director of HUD’s Los Angeles Office of Public Housing require the Authority to (1) provide documentation to show a cost savings benefit for $793,101 in legal services billed by the City and (2) follow intergovernmental agreements to ensure it’s in compliance with the requirements.


Key Details
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Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.


Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.


We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Public and Indian Housing

  •   2018-LA-1008-001-A

    Closed on March 21, 2019

    Provide documentation to show that $793,101 paid to the City for legal services was cost beneficial. Based on the documentation, it should reimburse its Housing Choice Voucher Program from non-Federal funds for any amount that exceeded the cost savings.

  •   2018-LA-1008-001-B

    Closed on February 26, 2019

    Follow the terms of the agreement, HUD requirements, and its own policies and procedures to ensure that any intergovernmental agreements for goods and services are in compliance.