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We audited the U.S. Department of Housing and Urban Development’s (HUD) Detroit Office of Public Housing as part of a nationwide audit of HUD’s oversight of environmental reviews.  We selected the Detroit Office based on our risk assessment.  Our audit objectives were to determine whether the Detroit Office’s oversight of public housing environmental reviews within its jurisdiction ensured that (1) the responsible entities performed the required reviews and (2) HUD did not release funds until all required documents were submitted.

The Detroit Office did not provide adequate oversight of three public housing commissions to ensure that the responsible entities properly completed and documented environmental reviews as required by 24 CFR (Code of Federal Regulations) Part 58.  Further, it did not maintain sufficient internal control records.  These conditions occurred because the Detroit Office thought that the State of Michigan’s environmental officer was responsible for monitoring responsible entities for compliance with requirements and because it did not properly implement the environmental requirements.  As a result, the Detroit Office may have increased the risk to the health and safety of public housing agency residents and the general public and may have failed to prevent or eliminate damage to the environment.  Further, the three housing commissions spent more than $34.7 million, including more than $18 million in Recovery and Reinvestment Act grant funds, for projects that either did not have required environmental reviews or the environmental reviews were not adequately supported.  

We recommend that three housing commissions repay HUD, for transmission to the U.S. Treasury, almost $1 million and support or repay more than $33 million.  We also recommend that the Director of the Detroit Office of Public Housing take available actions against the three housing commissions and their responsible entities.  To correct systemic weaknesses identified in this report, we will make recommendations to HUD headquarters officials in an upcoming nationwide audit report.