Housing Authority of the County of Lackawanna Must Improve Internal Controls
HUD received an anonymous complaint alleging incompetent leadership, nepotism, misuse of funds, and poor quality of life at the Housing Authority of the County of Lackawanna, Pa. In response, HUD audited the authority to determine whether the allegations in the complaint had merit and whether the authority had effective internal controls.
HUD auditors found that the allegations in the complaint had merit. The authority allowed a conflict-of-interest situation to exist, didn’t settle an interfund account balance totaling $370,234 in a timely manner, didn’t check to identify parties excluded from doing business with HUD, and assumed an undue risk by not controlling its employees’ use of authority-owned vehicles. Auditors discussed these deficiencies with authority officials during the audit, and they took some immediate corrective action and informed auditors that they planned to take additional corrective action.
The auditors recommended that HUD require the authority to develop and implement: (1) policies and procedures to detect, prevent, and resolve conflict-of-interest situations; and (2) controls to ensure that interfund accounts are settled in a timely manner, thereby putting $370,234 to better use over a one-year period.
- HUD Audit Report No. 2014-PH-1003, Feb. 28, 2014