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We audited the fees that the Richmond Redevelopment and Housing Authority charged to its U.S. Department of Housing and Urban Development (HUD) housing programs for central office cost center services based on issues identified during our prior audit of the Authority.  Our objective was to determine whether the Authority charged fees to its HUD housing programs for central office cost center services that were eligible, reasonable, and supported in accordance with applicable HUD requirements.

The Authority did not always charge fees to its HUD housing programs for central office cost center services that were eligible and reasonable in accordance with HUD requirements.  Specifically, it charged HUD funds (1) $507,800 for an information technology fee that was duplicative and (2) $5 million based on an hourly maintenance fee rate that was unreasonable for the services provided.  It also made ineligible transfers of HUD funds to its central office cost center.  These conditions occurred because the Authority lacked oversight and controls.  As a result, the Authority improperly used $507,800 in HUD funds for ineligible expenses and could not show that $5 million in fees paid with HUD funds was reasonable for the services provided.

We recommend that HUD require the Authority to (1) reimburse its public housing projects $507,800 from non-Federal funds for the ineligible duplicative information technology fee, (2) provide documentation to show that the hourly maintenance fees totaling $5 million were reasonable for the services provided or reimburse its public housing projects from non-Federal funds for any amount that it cannot support, and (3) continue its efforts and develop and implement procedures and controls to improve its operations.