We audited the Tule River Indian Housing Authority in response to a complaint involving the Authority’s alleged misuse and improper procurement of $303,721 in Recovery and Reinvestment Act of 2009 Native American Housing Block Grant funding to be used for cabinet construction work on 38 of its housing units. Our overall objective was to determine whether the Authority followed procurement and contracting requirements and used its Recovery Act Native American Housing Block Grant funding in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.
The Authority did not follow procurement and contracting requirements and did not use its Recovery Act Native American Housing Block Grant funding in accordance with HUD requirements under 24 CFR (Code of Federal Regulations) 85.36 (Procurement), 29 CFR Parts 3 and 5, and its own internal policies and procedures (see appendix C). The Authority also did not have sufficient policies, procedures, and controls in place to ensure that it complied with Federal procurement and contracting requirements, which led to improper cash disbursements and a lack of segregation of duties in its program. As a result, it used $36,884 for ineligible expenditures and failed to obligate $95,831 in Recovery Act Native American Housing Block Grant funds.
We recommend that HUD require the Authority to reimburse its Recovery Act Native American Housing Block Grant $36,884 from non-Federal funds for the ineligible overpayments made to the contractor for cabinet construction work. We also recommend that HUD recover the remaining unobligated Recovery Act grant funds of $95,831from the Authority for return to the U.S. Treasury. Further, we recommend that HUD require the Authority to establish and implement sufficient written procurement policies and procedures. In addition, we recommend that the Authority implement sufficient written internal control procedures for cash disbursements, including proper segregation of duties.