The Housing Authority of DeKalb County, Decatur, GA, Generally Administered RAD Appropriately but Did Not Accurately Report on Its Capital Fund Program | Office of Inspector General, Department of Housing and Urban Development

June 09, 2017

Public and Indian Housing

2017-AT-1006

2017-AT-1006.pdf

We audited the Housing Authority of DeKalb County’s Rental Assistance Demonstration (RAD) conversion and Public Housing Capital Fund program. We selected the Authority for review in accordance with our annual audit plan. Our audit objective was to determine whether the Authority properly administered its RAD conversion and obligated and authorized capital funds in accordance with the U.S. Department of Housing and Urban Development’s requirements.

The Authority generally administered its RAD conversion in accordance with HUD’s requirements for written agreements, project financing sources, reporting of financial data, the expenditure of HUD funding, tenant occupancy, the calculation of contract rents, and physical conditions assessments. However, the Authority failed to accurately report on the obligation and authorization of its capital funds. Specifically, it inaccurately reported its fiscal year 2015 capital funds as obligated when binding agreements were not executed and caused some of its fiscal year 2016 capital funds to be authorized for a previously completed activity. This condition occurred because the Authority lacked (1) an understanding of HUD’s requirements and (2) adequate internal controls over its financial reporting. As a result, more than $940,000 in capital funds was improperly obligated and authorized.

We recommend that the Director of HUD’s Atlanta Office of Public and Indian Housing require the Authority to (1) deobligate more than $542,000 in capital funds until binding agreements are executed and reclassify more than $398,000 in capital funds for eligible and reasonable activities, or coordinate with HUD for terminating its capital funds including more than $217,000 of its current allocation, (2) provide adequate training to its staff, and (3) develop and implement adequate procedures and controls to ensure accurate reporting on capital funds. In addition, we recommend the Authority confirm the replacement of program units was appropriate for the number of units demolished at Johnson Ferry East, and submit a development proposal to construct new public housing units, transfer public housing assistance to another public housing agency, or terminate its annual contributions contract and return all unobligated and unexpended capital funds to HUD.

Recommendation	Status	Date Issued	Summary
2017-AT-1006-002-A	Closed	June 09, 2017	Deobligate $542,289 in fiscal year 2015 capital funds in HUD's system until binding agreements are executed for eligible and reasonable purposes, or coordinate with HUD for terminating its funding.
2017-AT-1006-002-B	Closed	June 09, 2017	Reclassify $398,022 in fiscal year 2016 capital funds as authorized in HUD's system to an eligible and reasonable activity, or coordinate with HUD for terminating its funding.
2017-AT-1006-002-C	Closed	June 09, 2017	Coordinate with HUD for terminating the allocation of the remaining $217,553 funds given the Authority's current intentions to not build or purchase public housing units.
2017-AT-1006-002-D	Closed	June 09, 2017	Develop and implement adequate procedures and controls to ensure that the reporting of allocated capital funds in HUD's system is accurate.
2017-AT-1006-002-E	Closed	June 09, 2017	Provide adequate training to staff responsible for making entries into HUD's system to ensure accurate reporting on allocated funds. The training should include but not be limited to ensuring that its staff understands all of HUD's reporting requirements for obligations and authorizations.
2017-AT-1006-002-F	Closed	June 09, 2017	Confirm the replacement of program units was appropriate for the number of units demolished at Johnson Ferry East, and submit a development proposal to construct new public housing units, transfer public housing assistance to another public housing agency, or terminate its annual contributions contract and return all unobligated and unexpended capital funds to HUD.

Recommendation

Status

Date Issued

Summary

2017-AT-1006-002-A

Closed

June 09, 2017

Deobligate $542,289 in fiscal year 2015 capital funds in HUD's system until binding agreements are executed for eligible and reasonable purposes, or coordinate with HUD for terminating its funding.

2017-AT-1006-002-B

Closed

June 09, 2017

Reclassify $398,022 in fiscal year 2016 capital funds as authorized in HUD's system to an eligible and reasonable activity, or coordinate with HUD for terminating its funding.

2017-AT-1006-002-C

Closed

June 09, 2017

Coordinate with HUD for terminating the allocation of the remaining $217,553 funds given the Authority's current intentions to not build or purchase public housing units.

2017-AT-1006-002-D

Closed

June 09, 2017

Develop and implement adequate procedures and controls to ensure that the reporting of allocated capital funds in HUD's system is accurate.

2017-AT-1006-002-E

Closed

June 09, 2017

Provide adequate training to staff responsible for making entries into HUD's system to ensure accurate reporting on allocated funds. The training should include but not be limited to ensuring that its staff understands all of HUD's reporting requirements for obligations and authorizations.

2017-AT-1006-002-F

Closed

June 09, 2017

Confirm the replacement of program units was appropriate for the number of units demolished at Johnson Ferry East, and submit a development proposal to construct new public housing units, transfer public housing assistance to another public housing agency, or terminate its annual contributions contract and return all unobligated and unexpended capital funds to HUD.