We audited the Red Bank Housing Authority based on the results of our audit of Asbury Park Housing Authority because both public housing agencies had agreements with the Long Branch Housing Authority to provide services.  The objective of this audit was to determine whether the Authority administered its Public Housing Operating and Capital Fund programs in accordance with U.S. Department of Housing and Urban Development (HUD), Federal, and Authority requirements.  

We found that the Authority did not always administer its operating and capital funds in accordance with HUD, Federal, and Authority requirements.  Specifically, the Authority did not (1) adequately support payments made to the Long Branch Housing Authority for technical, administrative, and maintenance services; (2) follow applicable requirements when purchasing goods and services; (3) adequately support allocations of contract costs among programs; and (4) ensure that disbursements were properly reviewed and approved before making payments.  These conditions occurred because the Authority did not maintain detailed documentation and did not have adequate controls to ensure that Long Branch staff understood and followed applicable HUD, Federal, and Authority requirements.  As a result, HUD did not have assurance that more than $622,000 paid for goods and services was for eligible, reasonable, necessary, allocable, and properly approved costs. 

We recommend that HUD require the Authority to (1) provide documentation to show that more than $252,000 paid under an interagency agreement was for eligible, reasonable, necessary, and allocable costs; (2) update its policies and procedures to ensure that any additional payments made under interagency agreements are adequately supported before payment is made and that services are provided in accordance with applicable requirements; (3) provide documentation to support that more than $334,138 paid for goods and services was reasonable and properly allocated; and (4) provide documentation to show that $36,508 disbursed was for authorized and approved costs.  Further, we recommend that HUD provide technical assistance to the Authority to help ensure that future interagency agreements clearly outline the expectations and documentation required, its board provides adequate oversight and the Authority complies with HUD, Federal and Authority’s procurement requirements when purchasing goods and services.