District of Columbia Audit Reports
Date: July 13, 2007
Title: The District of Columbia Housing Authority, Washington, DC, Did Not Adequately Administer Leased Housing under Its Moving to Work Program
We audited the District of Columbia Housing Authority�s (Authority) administration of its leased housing under its Moving to Work program (program) based upon our analysis of various risk factors relating to the housing authorities under the jurisdiction of HUD's Baltimore field office. This is the first of three audit reports we plan to issue on the Authority�s program. The audit objectives addressed in this report were to determine whether the Authority adequately determined tenant eligibility and properly calculated and supported its leased housing assistance payments.
The Authority did not adequately determine tenant eligibility and did not properly calculate and support its leased housing assistance payments. There were problems in all 34 tenant files selected for review. The tenant files reviewed did not contain many of the key documents required by the U.S. Department of Housing and Urban Development (HUD) and the Authority�s own administrative plan, resulting in unsupported payments of $309,914. The Authority also failed to perform 5,038 (57 percent) of the 8,835 tenant reexaminations required for fiscal year 2006. Lastly, the Authority incorrectly calculated housing assistance payments, resulting in $25,162 in overpayments and $4,470 in underpayments from October 2004 through September 2006.
We recommend that the director of HUD�s Baltimore Public Housing Program Hub require the Authority to support or reimburse $309,914 from nonfederal funds for the unsupported housing assistance payments and administrative fees and that HUD reduce the Authority�s fiscal year 2008 administrative fees by an appropriate percentage for failing to perform the 5,038 reexaminations. We also recommend that the Authority reimburse its program from nonfederal funds $25,162 for the overpayment of housing assistance payments and reimburse applicable tenants $4,470 for housing assistance underpayments, thereby putting these funds to better use. We further recommend that HUD require the Authority to implement adequate procedures and controls to ensure it follows HUD requirements, performs required quality control reviews, and ensure it assigns sufficient staff to administer its leased housing. This is the first of three audit reports we plan to issue on the Authority�s program. In this regard, we may make recommendations in future reports relating to some of the issues disclosed in this report.
Issue Date: June 3, 2004
Title: Safe Haven Outreach Ministry, Incorporated, Washington, DC
We performed an audit of the Safe Haven Outreach Ministry, Incorporated (Safe Haven) at the request of HUD�s Office of Community Planning and Development to determine if it expended grant funds in accordance with HUD policies and procedures, and within the terms and conditions set forth in its grant agreement.
We found Safe Haven could not substantiate how it used $1,160,873 of the $1,618,149 (72-percent) grant funds it received from HUD under its Housing Opportunities for Persons with AIDS Program, Supportive Housing Program, and Shelter Plus Care Program. In addition, our audit identified officials spent $3,977 in HUD funds on ineligible activities such as movie tickets, cigarettes, Christmas gifts, and weekly bingo games. As a result, there is no assurance that it used the funds to assist the homeless with housing and supportive services or addressed the specific housing and other supportive needs of persons living with HIV/AIDS and their families as required by the grant agreements. This occurred because Safe Haven did not have an effective or organized accounting system or filing system. In addition, Safe Haven officials were unaware of applicable federal and contractual requirements of the programs.
We recommend that HUD initiate appropriate administrative actions against current and/or former members of the Board of Directors, Executive Committee and other responsible officials of the Safe Haven Outreach Ministry, Incorporated. We further recommend that Safe Haven provide HUD adequate documentation to support $1,160,873 in unsupported expenditures or reimburse HUD from non-federal funds. Lastly, we recommend that HUD require Safe Haven to reimburse $3,977 for its ineligible costs from non-federal funds.
Issue Date: February 19, 2004
Title: The Congress of National Black Churches, Incorporated Housing Counseling Program, Washington, DC
In response to a hotline complaint, we performed an audit of the Housing Counseling Program administered by the Congress of National Black Churches (CNBC). The complaint alleged that CNBC drew down funds from the Housing Counseling grant and then failed to reimburse its affiliates for services rendered. The complaint also noted that CNBC affiliates were performing services without sub-grant agreements, which is a violation of the grant agreement between HUD and CNBC. The objective of the audit was to determine if CNBC spent its grant funds in accordance with the applicable HUD rules and regulations. To accomplish our objective we reviewed how CNBC used the Grant Program funds it received from October 2000 through March 2003.
We found CNBC did not administer its Housing Counseling Program according to the grant agreements with HUD and the applicable HUD rules and regulations. Specifically, CNBC used $521,062 in grant funds to pay for ineligible payroll, operating costs, and payments to several affiliates; and could not support another $423,584 of grant funds it received from HUD. In addition, CNBC could not demonstrate it provided the required leverage funding it agreed to under its grant agreement with HUD. These deficiencies occurred because CNBC�s Board of Directors did not provide adequate oversight over the Executive Director and other key management officials� administration of the Program, nor did they ensure adequate management controls were in place to enable them to detect and prevent these problems from occurring. Due to the severity of these problems and abuses, CNBC�s affiliates were forced to curtail or suspend their housing counseling services. Further, CNBC itself was forced to suspend all Program operations.
We recommended that CNBC reimburse its affiliates and HUD for the ineligible expenditures and provide adequate support for the unsupported expenditures. We also recommended that HUD�s Assistant Secretary for Housing take appropriate administrative action against CNBC as a designated National Housing Counseling intermediary and take debarment action against the former Executive Director and Chief Financial Officer.
Issue Date: December 9, 2002
Title: Congressionally Requested Audit of the Outreach and Training Assistance Grants Awarded to the National Housing TrustWe completed an audit of the Outreach and Technical Assistance Grants (OTAGs) awarded to the National Housing Trust (NHT). The audit identified that NHT properly accounted for the direct costs charged to the OTAGs. However, NHT overcharged the OTAGs over $29,000 for employee services and included indirect costs in its billing rates that had not been approved. In addition, NHT did not maintain records to account for non-billable hours and received $946 in duplicate payments. However, we did not identify any costs related to lobbying activities. Our report contains seven recommendations to address the issues identified in the report and other recommendations to strengthen management controls over the grantees.
Issue Date: December 3, 2002
Title: Congressionally Requested Audit of the Intermediary Technical Assistance Grant Awarded to the National Center for Tenants Ownership, Grant No. FFIT98005NTWe completed a review of the Intermediary Technical Assistance Grant (ITAG) awarded to the National Center for Tenants Ownership (NCTO). The audit identified that NCTO's subgrantees charged $45,212 for employees' salaries and fringe benefits in excess of actual cost, did not submit adequate supporting documentation for expenditures, and did not adequately support the cost allocation method for charging indirect costs. In addition, NCTO received $35,781 in duplicate payments. However, we did not find any activity that related to lobbying. Our report contains nine recommendations to address the issues identified in the report and other recommendations to strengthen management controls over the grantees.
Issue Date: April 4, 2000
Title: Hotline Allegations � District of Columbia Housing Authority
We reviewed the District of Columbia Housing Authority (DCHA) in response to a complaint to the Department of Housing and Urban Development (HUD) Hotline. The complainant alleged that the DCHA improperly used public funds while in Puerto Rico, mismanaged the Occupied Unit Rehabilitation Program, and used questionable hiring practices.
We concluded that the DCHA improperly used $82,714 of public funds to pay salary and travel costs to Puerto Rico for its staff members. The salary and travel costs are ineligible because they are not consistent with the DCHA jurisdictional authority. Specifically, District of Columbia law empowers the DCHA to operate only within the District of Columbia. We also concluded that the DCHA Internal Audit Office has identified and addressed many of the issues pertaining to the allegations of mismanagement of the Occupied Unit Rehabilitation Program and the questionable hiring practices.
Issue Date: March 30, 2000
Title: Tenant Opportunity Program Grantees, DCHA, Washington, DC
At the request of the District of Columbia Housing Authority, we completed a review of seven Tenant Opportunity Program grantees in Washington, DC. We determined that the grantees lacked the knowledge and technical skills to manage TOP grant funds in accordance with Federal requirements.
Issue Date: September 28, 1998
Title: Innovative Homeless Initiatives Demonstration Program the Community Partnership for the Prevention of Homelessness Washington, DC
We concluded that CPPH's management controls over onsite monitoring of subgrantees and subgrantee submission of annual audited financial statements were weak. Similar problems were also noted during a December 1996 review of a CPPH subgrantee in which we identified over $400,000 in unsupported funds. In our view, we do not believe that CPPH has taken sufficient steps to help prevent the misapplication of funds from occurring again. Also, CPPH drew down Demonstration Program funds in excess of amounts needed to satisfy disbursements for a 3-day period, as specified in its grant agreement.
We are recommending that your office have CPPH: begin describing the results of its monitoring efforts in its annual reports by providing the name, location, and conclusions that were reached on each monitoring visit; begin withholding payments to subgrantees that do not submit audited financial statements on time; and implement procedures that restrict the draw down of funds from the Line of Credit Controls Systems (LOCCS) to its immediate needs. We are also recommending that you withhold further funding to CPPH until the necessary financial and management controls have been implemented and all subgrantee audited financial statements are received and reviewed.
Issue Date: September 24, 1998
Title: Upfront Grant for Ridgecrest Heights Apartments CEMI-Ridgecrest, Inc. Washington, DC
Based on our review results and existing HUD guidelines in effect when the upfront grant was awarded, we believe HUD properly entered into a negotiated sale with CEMI-Ridgecrest, Inc., for the Ridgecrest Heights Apartments. Furthermore, nothing came to our attention in the HUD guidelines or HUD background clearance process that would have prevented the principals of CEMI and the representatives of the Ridgecrest Heights Tenants Cooperative Association from active involvement in either the sale, upfront grant, or redevelopment of the Ridgecrest Heights Apartments. However, in order to ensure that the redevelopment effort continues to progress as intended under the grant agreement, we are recommending that HUD: (1) become actively involved in monitoring the sale of the townhomes to ensure that returning Ridgecrest Heights Apartments' tenants who qualified for homeownership in the new development are adequately represented; (2) become actively involved in the establishment and monitoring of the Housing Trust Fund for the future residents of the project; and (3) establish a mechanism for the repayment to HUD of approximately $10 million from the sale of the townhomes. In addition, we are recommending the recovery of an overpayment of $22,375 to the District of Columbia Housing Finance Agency for a redevelopment loan paid with grant funds; the recovery from CEMI-Ridgecrest, Inc., of $5,155 in interest earned on money market accounts established with grant funds; and the transfer of the remaining balance of $40,058 from the Ridgecrest Heights Apartments rental account to the Housing Trust Fund to be established for the new residents.
Date Issued: August 18, 1998
Title: Multifamily Equity Skimming Review Capitol View Plaza, Phase II FHA Project Number 000-44123 Washington, DC
We determined that the owner violated paragraph 6(c) of the Regulatory Agreement by withdrawing $409,700 in project funds between fiscal years 1992 and 1995 while the project was in a nonsurplus cash position. Paragraph 6(c) specifically prohibits the use of project funds for any purpose other than paying reasonable operating expenses and necessary repairs when the project is in a nonsurplus cash position.
Date Issued: December 17, 1996
Title: Hotline Complaint, Community for Creative Non-Violence
This memorandum provides you the results of our review of the use of funds by the Community for Creative Non-Violence (CCNV) under a subgrant from the Community Partnership for the Prevention of Homelessness (Community Partnership). The review was performed in response to a hotline complaint. The objective for which the grant funds had been awarded development and implementation of a computerized case management system had not been accomplished and only about $223,550 of the $630,421 received from HUD under the grant agreement was spent on case management related expenses. The remaining funds, about $406,871, were spent on items that were either not allowable or could not be determined to be allowable under the terms of the grant agreement due to a lack of supporting documentation. We asked the CCNV Vice President on numerous occasions to provide documentation to support the questioned items but the information was not provided. We therefore find it necessary to disallow the expenditures of $406,871 and recommend termination of the current grant agreement.
Issue Date: June 18, 1996
Title: Audit Report on the District of Columbia Housing Authority Section 8 Certificate and Voucher Payments System
This is our final report on the subject audit performed to assess the adequacy of the District of Columbia Housing Authority controls over the Section 8 certificate and voucher payment system. We found the Housing Authority had taken many positive steps to strengthen its control over the system, especially since May 1995 when the Housing Authority was placed under a court-appointed receiver, empowered to reorganize and restructure the authority and control personnel matters, union negotiations and the obligation and expenditure of funds. Since that time, the Housing Authority has separated from the District and begun to issue its own checks. It has also purchased a computer system to ultimately service both the Section 8 program and the Housing Authority's other business lines and hired new Section 8 staff.
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