HUD OIG audited the Miami Dade Housing Agency (Agency) capital fund program. The objective of the audit was to determine whether the Agency used capital fund program drawdowns in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. The Agency did not use capital fund program drawdowns in accordance with HUD requirements.
The Agency's internal controls over capital fund program drawdowns from HUD were inadequate. The Agency drew down $257,253 to close out the 2003 capital fund program grant using the same expenses it used for previous drawdowns. The Agency also drew down from its 2007 capital fund program grant $283,168 more than was supported by expenses. These conditions occurred because the Agency did not have effective controls in place to identify and track excess funds that needed to be returned. As a result, we have no assurance that $540,421 in excess funds was repaid. Further, the Agency used capital fund program drawdowns to reimburse itself for ineligible and unsupported expenses.The Agency was reimbursed from capital funds for $62,123 that was used for public housing operations and $127,593 that it could not support was used for capital fund activities. It was also unable to provide documentation to support $257,694 in expenses transferred to the 2007 capital fund program grant that had not been reimbursed. These conditions occurred because the Agency did not have effective internal controls in place to ensure that capital funds were used in accordance with HUD requirements. As a result, we consider $62,123 to be ineligible costs, $127,593 to be unsupported costs, and $257,694 to be funds that could be put to better use, since the Agency had not been reimbursed for these expenses.
OIG recommended that HUD require the Agency to (1) provide supporting documentation showing that the $257,253 excess drawdown was returned to the program or reimburse HUD from nonfederal funds, (2) provide supporting documentation for the $283,168 in expenses for the 2007 capital fund program grant or reimburse the capital fund program from nonfederal funds, and (3) define the roles and responsibilities of its accountants for the monthly reconciliation of capital fund program grants to HUD records and monitor capital fund drawdowns and excess capital funds. We also recommend that HUD determine and place appropriate restrictions on the Agency's ability to draw down capital funds. In addition, HUD should require the Agency to (1) reimburse HUD $62,123, (2) provide supporting documentation for $127,593 that it could not support was for capital fund activities and $257,694 transferred to the 2007 capital fund program, and (3) implement and enforce policies and procedures to improve controls over the program.