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Kentucky Audit Reports
Issue Date: August 28, 2006 We audited the Housing Authority of Lawrence County, Kentucky (Authority),
to determine whether the Authority managed its procurement and financial
management systems in accordance with U.S. Department of Housing
and Urban Development (HUD) requirements. We conducted the review
pursuant to a request by the director of the Office of Public Housing,
Louisville, Kentucky. The Authority spent more than $71,000 for questionable purchases
and travel expenses. This occurred because it did not follow Office
of Management and Budget requirements that expenses be reasonable
and necessary, did not have sufficient management controls to ensure
adequate segregation of duties or adequate board oversight, and
did not follow its procurement policies or federal procurement requirements.
The Authority and HUD's Office of Public Housing, Louisville, Kentucky,
entered into an improvement plan and memorandum of agreement on
April 18, 2006, to address deficiencies in the Authority's operations,
but additional actions are needed. We recommend that the director of the Office of Public Housing 1. Require the Authority to provide support for $71,741 in questionable
costs or repay any ineligible or unsupported amounts from nonfederal
funds. 2. Revise the improvement plan and memorandum of agreement with
the Authority to include actions that ensure that the Authority
Adequately segregates its accounts payable processes, Provides adequate supervisory oversight over credit card
purchases and travel advances to include review of supporting documents
by a board member before signing checks, and Complies with its procurement policies and federal procurement
regulations. 3. Reevaluate the corrective actions at a later date to determine
whether the actions were appropriate. Issue Date: September 20, 2002 Title: Congressionally Requested Audit of the Outreach and Technical Assistance Grants Awarded to the Homeless and Housing Coalition of Kentucky, Inc. Frankfort, KentuckyIn response to a Congressional request, we reviewed the eligibility of costs of Homeless and Housing Coalition of Kentucky, Inc.'s Outreach and Technical Assistance Grant (OTAG), with particular emphasis on identifying ineligible lobbying activities. The audit concluded the Grantee failed to maintain adequate records to support charges to the grants, and charged the grants for ineligible activities. The ineligible activities included unreasonable consulting fees, lobbying activities that are prohibited by OMB Circular A-122, and unrelated travel and training costs. The Grantee's failure to comply with requirements under OMB Circulars A-122 and A-110 resulted in overcharges to the grants of at least $16,287 for ineligible activities. The Grantee also failed to use a cost allocation method or plan that complied with guidance in OMB Circular A-122 to allocate indirect costs to the grants. Consequently, the Grantee could not support $54,625 of indirect costs charged to the grants. Also, the Grantee failed to submit required supporting data for some payment vouchers. Issue Date: September 3, 1998 Title: City of Covington Hotline Complaints Covington, KentuckyDuring our review period, Johnson or related entities received Investor Rehabilitation Loans totaling about $1.1 million, or 32 percent of the loans awarded. We were unable to prove or disprove favoritism; however, Johnson benefited from the loan program to a greater extent than any other investor. As a result, there is the appearance of favoritism, and the absence of either written procedures or documentation made it difficult to refute. The City attributed the high number of Johnson loans to her willingness to undertake projects no one else would do. Issue Date: July 7, 1998 Title: Hazard HA, Hazard, KYDuring our review the prior ED and Assistant ED were indicted by a Federal grand jury for controlled substance violations. The HUD Kentucky State Office immediately issued a Limited Denial of Participation in HUD programs for both. HHA's Board then placed the Assistant ED on administrative leave, and appointed the Interim ED and Assistant ED. The prior ED remained on sick leave. The Manchester Housing Authority's Board also obtained new management. In January 1998, the prior ED and Assistant ED were convicted of multiple Federal controlled substance violations. On April 6, 1998, in Federal Court in Pikeville, Kentucky, they were each sentenced to 3 years probation and assessed criminal penalties totaling $3,900. Prior HHA management did not administer HHA's programs economically, effectively, or efficiently, and was not meeting its mission of providing decent, safe and sanitary housing. Attachment A has three findings: Management of HHA under the prior administration was ineffective, inefficient and uneconomical resulting in wasted public funds. The prior ED and Assistant ED appeared to lack either the ability or desire to properly manage HHA, and lack of adequate Board oversight allowed conditions to deteriorate. The following deficiencies evidenced failure to fulfill responsibilities required of officials in public trust positions: Records in disorder or missing Nepotism Units not timely prepared for occupancy HHA must improve the quality of its housing. Ninety-seven percent of the family units we inspected did not meet HUD's Housing Quality Standards (HQS). As a consequence, HHA was providing substandard housing and residents were living in indecent, unsafe, and unsanitary conditions. The excessive HQS failure rate and overwhelming evidence of deferred maintenance are indicative of poor management. HQS inspections were superficial, there was no preventative maintenance program, and in some cases indicated repairs had not been made or were of poor quality. HHA management did not follow required Federal procurement procedures and, in some instances, attempted to conceal known deviations from required procedures. Management procured materials and services, in some cases from relatives, without obtaining required price quotes or following bid procedures. As a result, there is no assurance costs were reasonable, and certain individuals/firms were accorded preferential treatment over others. Issue Date: January 24, 1996 Title: HA of Bowling Green, Bowling Green, KYBased on a review of approximately 60 percent of the former ED's travel claims of $4,100, we concluded he falsified documents and made bogus claims for about $665, or 27 percent of the cost reviewed. Content Archived: September 10, 2010 |
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