We audited the Springfield Housing Authority’s American Recovery and Reinvestment Act of 2009 Public Housing Capital Fund Stimulus formula grant. The audit was part of the activities in our fiscal year 2011 annual audit plan. We selected the Authority based upon our analysis of risk factors relating to the housing agencies in Region V’s jurisdiction. Our objective was to determine whether the Authority administered its grant in accordance with Recovery Act, U.S. Department of Housing and Urban Development’s (HUD), and its requirements.
The Authority did not administer its grant in accordance with Recovery Act, HUD’s, and its requirements. Specifically, it did not ensure that its contractors purchased products that met Federal minimum energy efficiency standards and paid their employees the appropriate prevailing wage rates in accordance with the Davis-Bacon Act.
The Authority also did not ensure that it (1) charged more than $134,000 in Recovery Act funds to the correct accounts, (2) performed inspections of the construction work before issuing payments, and (3) approved purchases in accordance with HUD’s requirements and its policies and procedures. Further, the Authority did not obtain or maintain procurement documentation in accordance with HUD’s requirements and its own policies and procedures. However, the Authority accurately reported its Recovery Act progress and disbursed its grant funds in a timely manner in accordance with HUD’s requirements.
As a result of the Authority’s noncompliance, its contractors purchased nearly $87,000 in products that did not meet Energy Star standards and underpaid their employees by more than $4,300. Additionally, the Authority was unable to provide documentation to support more than $135,000 in wages, and HUD and the Authority lacked assurance that Recovery Act-funded contracts were properly procured and executed.
We recommend that the Director of HUD’s Chicago Office of Public Housing require the Authority to (1) reimburse nearly $87,000 from non-Federal funds to HUD for transmission to the U.S. Treasury, (2) pursue collection from the applicable contractors or reimburse the appropriate employees more than $4,300 from non-Federal funds, (3) support or reimburse more than $135,000 from non-Federal funds to HUD for transmission to the U.S. Treasury, and (4) implement adequate quality control procedures to address the findings cited in this audit report.