Ohio PHA Didn't Manage Its Procurements and Contracts Properly

HUD’s Office of Inspector General (OIG) audited the Jefferson Metropolitan Housing Authority’s public housing program. The audit found that the PHA didn’t always comply with federal and its own procurement requirements and HUD’s requirements for the administration of its energy performance contract.

Specifically, the PHA didn’t maintain adequate documentation to support its procurements and ensure that there were no real or apparent conflicts of interest in its contracting process. The PHA’s current executive director said that the PHA had experienced a number of executive staff changes. Therefore, she believed that the missing documentation may have been misplaced or not appropriately completed and maintained. In addition, the PHA’s previous interim active executive director said that its architecture and engineering firm reviewed the bids received, maintained the procurement and bid documentation, scored and ranked the bids, and recommended the top proposals to the PHA. Based on the OIG’s review, auditors determined that the firm didn’t always maintain documentation to support the procurement process, including contract selection.

Additionally, auditors found that the PHA failed to achieve the expected savings on its energy improvements. As a result, HUD and the PHA lacked assurance that more than $964,000 in public housing operating funds was used appropriately. Further, the PHA is at risk of defaulting on its nearly $6 million energy conservation loan, thus potentially encumbering public housing properties.

The OIG recommended that the director of HUD’s Cleveland Office of Public and Indian Housing require the PHA to: (1) support or reimburse its program more than $964,000 from non-federal funds for its unsupported procurement and contracting activities; (2) work with HUD to develop a plan to ensure that energy savings are realized to prevent a potential default on its nearly $6 million energy conservation loan used to purchase energy conservation equipment attached to the PHA’s public housing properties; and (3) develop and implement adequate procedures and controls to address the findings cited in the audit report.

• HUD Audit 2016-CH-1005, August 2016