Stamford Housing Authority Didn't Properly Administer Federal Programs
In response to an anonymous complaint, HUD audited the Housing Authority of the City of Stamford, Conn., regarding its administration of its federal housing programs. The auditors found that the authority didn't properly administer its federal programs in accordance with HUD requirements, federal regulations and laws, its own policies and procedures, and its annual contributions contracts. Specifically, it failed to:
Fully reconcile its interprogram transactions in its revolving fund account;
Maintain adequate supporting documentation to demonstrate that it properly charged salaries and associated costs;
Comply with HUD procurement regulations and its own procurement policies; and
Pay only eligible, supported, and necessary program expenses.
As a result, the authority: (1) improperly wrote off a $2.6 million interprogram imbalance as a prior period adjustment, and had more than $7.5 million in unsupported transactions recorded in its interprogram accounts; (2) couldn't show that at least $7.6 million in salaries and related costs were properly charged to federal programs; (3) couldn't demonstrate that more than $2.5 million in contract costs charged to federal programs were reasonable program expenses; and (4) paid more than $95,000 in questioned costs charged to federal programs that weren't eligible or supported program expenses. Further, based on the nature and extent of the multiple significant areas of noncompliance, the auditors warned that the authority may be in substantial default with its annual contributions contracts. Additionally, the lack of adequate internal controls in place at the authority put it at a higher risk for potential fraud, waste, and abuse.
The auditors recommended that the program center coordinator of HUD's Hartford Office of Public Housing inform the deputy assistant secretary for Public and Indian Housing for Field Operations of the authority's potential substantial default with section 17 of the Annual Contributions Contract and require the authority to: (1) support more than $17.7 million in unsupported costs identified during the audit related to interfund transactions, cost allocation, procurement, and questionable disbursements; (2) repay any amounts it can't support; and (3) repay the $49,095 in ineligible costs identified during the audit. Auditors also recommend that HUD provide technical assistance to the authority to establish an effective procurement system and that the authority's management and staff are properly trained regarding federal procurement requirements.
Finally, the auditors recommended that the director of HUD's Departmental Enforcement Center review the actions of the authority's board of commissioners, executive director, former executive director, and consultants, and take appropriate administrative actions if warranted.
- HUD Audit Report No. 2012-BO-1002, March 14, 2012