Sneak Preview: HUD OIG Urges Guidance for Small, Very Small PHAs

October 23, 2015 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Housing and Urban Development (HUD), Office of Inspector General (OIG) commended the actions that HUD officials have taken in recent months to assist small and very small public housing agencies (PHAs) to better manage HUD award funding, but the OIG still is recommending that the agency provide even more guidance to help these PHAs and their oversight boards to better understand their administrative responsibilities.

The OIG recently issued a report summarizing the results of audits conducted from January 2012 to December 2014 of 19 small PHAs (comprising 50-249 units) and seven very small PHAs (comprising 1-49 units) in several states. The report found that of the 26 housing agencies reviewed, 18 did not have adequate financial controls, 15 did not comply with federal procurement regulations or maintain documentation to support their procurement actions, and seven did not properly calculate or document tenant rents. In addition, the OIG found that the executive directors and board of commissioners at 11 PHAs had violated HUD requirements, including failing to provide sufficient oversight to ensure adequate internal controls were in place, keep minutes of board-related actions and avoid conflicts of interest.

Among the financial control offenses by key officials at small and very small PHAs that were detailed in the OIG report included unapproved pay raises, misuse of credit cards, payment for unauthorized overtime, payments to fictitious landlords and payments to individuals and companies for work that was not performed. For example, the OIG found that the executive director of a Louisiana PHA altered board meeting minutes to include a $7,500 board-approved raise for herself. She also wrote numerous checks to individuals and companies, sometimes without the board’s knowledge, for work that was not done, and submitted false invoices to verify these expenses. She also forged signatures on the back of checks, cashed them, and converted the money to her personal use, the OIG said. She eventually was convicted of theft of government funds, sentenced to five years’ probation and ordered to pay a $100 special assessment and $195,779 in restitution to HUD.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site).

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