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Massachusetts Audit ReportsIssue
Date: August 29, 2007 Title: Holyoke Housing Authority, Holyoke, MA Needs to Improve Its Internal Controls over the Voucher Program, Cost Allocations and TransfersWe audited the Housing Choice Voucher program (Voucher program) at the Holyoke Housing Authority (Authority) as part of our fiscal year 2007 annual audit plan. The objective of the audit was to determine whether the Authority administered the Voucher program in accordance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) requirements. Our efforts focused on whether the Authority properly (1) determined tenant eligibility/HAP payment calculations; (2) made and supported rent reasonableness determinations; (3) determined payments for unused sick leave; and (4) allocated costs and accounting for interfund transfer transactions. The Authority generally administered the Voucher program according to its administrative plan but not always in accordance with its annual contributions contracts and HUD requirements. It did not (1) ensure that the required documentation was maintained to support the eligibility of each tenant and its housing assistance payments, (2) conduct rent reasonableness determinations according to HUD requirements, (3) follow a prudent personnel practice regarding payment for unused sick leave upon the death or retirement of an employee, and (4) always properly allocate costs or account for interfund transfer transactions. These conditions occurred because the Authority either had not established adequate internal controls or followed the controls that were in place to ensure compliance with its annual contributions contracts and HUD regulations. Issue
Date: August 24, 2007 Title: The City of Fall River, MA, Generally Administered Its Block Grant and HOME Programs in Accordance with HUD RequirementsWe reviewed the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs administered by the Community Development Agency, City of Fall River, Massachusetts (City) as part of our annual audit plan. Our audit objective was to determine whether the City administered its CDBG and HOME programs in compliance with U. S. Department of Housing and Urban Development (HUD) requirements. We focused on whether the City: (1) had adequate internal controls over its management process, accounting, and data processing; (2) used CDBG funds for national objectives; (3) used CDBG and HOME program funds for eligible activities and were adequately supported; and (4) properly accounted for CDBG and HOME program income. The City generally administered its CDBG and HOME programs in compliance with HUD requirements. The City's (1) internal controls over its management process, accounting, and data processing were adequate, (2) CDBG funds were used for national objectives, (3) CDBG and HOME program funds were used for eligible activities and were adequately supported, and (4) CDBG and HOME program income was properly accounted for. Thus, the report contains no formal recommendations and no further action is necessary. However, the City has more than $3 million in unobligated HOME funds and could benefit by developing partnerships with additional Community Housing Development Organizations (CHDOs) to use these funds to develop additional housing for low to moderate income families. Issue
Date: April 23, 2007 Title: The City of New Bedford, Massachusetts, Did Not Meet Certain Requirements of HUD's Community Development Block Grant ProgramAs part of our annual plan, we audited the Office of Housing and Community Development, City of New Bedford, Massachusetts' (City) administration of its Community Development Block Grant (CDBG)) and HOME Investment Partnerships (HOME) programs. Our audit objective was to determine whether the City complied with U.S. Department of Housing and Urban Development (HUD) regulations in administering its CDBG and HOME programs. The City generally administered its CDBG and HOME programs in accordance with HUD regulations. However, it did not always ensure that its subrecipients followed HUD requirements or met the program objectives of the subrecipent agreements. The City failed to ensure that two of its subrecipients followed HUD requirements for full and open competition regarding procurements for construction work. It also did not ensure that another subrecipient attained its program objectives of issuing the required number of loans and creating the required number of new jobs. In addition, the City did not ensure that this subrecipient properly collateralized CDBG funds on deposit in the same bank, or made loans that did not involve conflicts of interest. These problems occurred because the City did not always adequately monitor subrecipient activities or failed to ensure that its subrecipents always took corrective action. As a result, there is a lack of assurance that subrecipient procurements were fair and equitable and that the most favorable contract prices were obtained for $750,000 in construction funding. Also, more than $1 million in CDBG funding for loans and job creation may not have been the best use of HUD funds, CDBG funds totaling $188,177 were not adequately safeguarded against loss, and a subrecipient approved two loans that created apparent conflicts of interest. We recommend that the director of the Office of Community Planning and Development in Boston require the City to (1) obtain a cost analysis for each subrecipient to support the $750,000 in CDBG funding provided for construction contracts, (2) ensure that the future use of CDBG funds creates the number of new jobs necessary to fulfill the requirements of past and current agreements to put current funding of $285,000 to better use, (3) obtain and provide evidence that CDBG funds in excess of Federal Deposit Insurance Corporation (FDIC) limits for the subrecipient are fully collateralized, and (4) ensure that the subrecipient establishes adequate policies addressing conflicts of interest including requirements for providing full disclosure. Issue
Date: March 21, 2007 Title: The Office of Community Development, City of Chicopee, Massachusetts, Did Not Properly Award and Administer Community Development Block Grant and HOME Funds Used for its Housing ActivitiesAs part of our annual plan, we audited the Office of Community Development, City of Chicopee, Massachusetts' (City) administration of its Community Development Block Grant (CDBG) and HOME programs. The objective of the audit was to evaluate the City's administration of its housing rehabilitation contracts funded through the CDBG or HOME programs and its oversight and monitoring of various for-profit developers (developers) involved in the rehabilitation activities. We also evaluated whether $700,000 in HOME set-aside funds was committed for an eligible project. The City did not adequately administer more than $2.2 million in housing rehabilitation contracts funded through its CDBG and HOME programs. It did not perform the required independent analysis of cost estimates submitted by developers before awarding rehabilitation contracts, did not always enforce procurement and financial management contract provisions included in written agreements with developers, did not adequately address performance problems on the part of developers identified during reviews performed by it, and approved final payments for unfinished projects. In addition, it approved more than $1.2 million in unreasonable and unsupported rehabilitation contract costs The $1.2 million is part of the overall $2.2 million., and its use of a $700,000 community housing development organization set-aside (set-aside) from the HOME program was an ineligible use of these funds. We recommend that the director of the Office of Community Planning and Development in Boston require the City to establish written policies and procedures for both the HOME and CDBG programs that meet HUD requirements for awarding, administering, and monitoring program funds. We also recommend that the City provide supporting documentation for the $1.2 million in unsupported costs, including establishing the reasonableness of the costs, or repay the funds and be directed not to use set-asides on the ineligible project, which will allow $700,000 to be put to better use on other eligible projects. Issue
Date: November 3, 2006 Title: Lynn Housing Authority & Neighborhood Development, Lynn, Massachusetts, Generally Administered its Section 8 Voucher Program in Accordance with HUD RequirementsWe reviewed the Section 8 Housing Choice Voucher program (Section 8 program) at the Lynn Housing Authority and Neighborhood Development (Authority) as part of our fiscal year 2006 annual audit plan. Our audit objectives were to determine whether the Authority effectively and efficiently administered its Section 8 program in compliance with the U.S. Department of Housing and Urban Development (HUD) requirements and its annual contributions contracts. Our audit of the Authority's Section 8 program did not disclose anything that indicated that it was not administering its Section 8 program in accordance with U.S. Department of Housing and Urban Development requirements and its annual contributions contracts. The audit also did not disclose anything that would cause us to believe that the Authority's internal control structure, over its management processes, accounting and data processing, did not adequately ensure that the Section 8 program was effectively and efficiently managed. Based on our audit, we did not identify any reportable conditions or deficiencies; therefore, we are not making any recommendations. Issue
Date: July 26, 2006 Title: Boston Housing Authority, Boston, Massachusetts, Used Voucher Program Funds to Pay State Housing Assistance Program Expenses and Needs to Improve Its Reasonableness ProcessWe reviewed the Section 8 Housing Choice Voucher program (Voucher program) at the Boston Housing Authority (Authority) as part of our fiscal year 2006 annual audit plan. Our audit objectives were to determine whether the Authority properly used Voucher program funds as required by U.S. Department of Housing and Urban Development (HUD) annual contributions contracts and to evaluate whether rent reasonableness determinations were conducted as required by HUD regulations. The Authority generally administered the Voucher program according to its administrative plan but did not always comply with its annual contributions contracts and HUD requirements. The Authority used Voucher program funds to subsidize state housing programs. It also did not conduct rent reasonableness determinations according to requirements cited in its administration plan and HUD regulations. These conditions occurred because the Authority had not established or always followed its internal controls to ensure compliance with its annual contributions contracts and HUD regulations. We recommend that the director of the Office of Public Housing require the Authority to stop using Voucher program funds to pay for nonprogram costs, implement changes to separate its federal and state leased housing data into two databases, and improve its rent reasonability determinations procedures and the accuracy of unit data in its databases .Issue
Date: January 23, 2006 Title: The City of Malden, Massachusetts, Working to Ensure Appropriate Use of Community Development Block Grant and HOME Investment Partnerships Program Administrative FundsAt the request of the Office of Community Planning and Development, we reviewed the City of Malden (City) and the Malden Redevelopment Authority (Authority) to determine whether Community Development Block Grant (Block Grant) and HOME Investment Partnerships Program (HOME Program) administrative funds were used in compliance with U.S Department of Housing and Urban Development (HUD) requirements. We found that the City and the Authority were working to strengthen internal controls to ensure compliance with HUD requirements. The City and Authority needed to strengthen the controls by ensuring that all job descriptions related duties to the Block Grant and HOME programs, and allocations of salaries and travel expenditures were proper and adequately supported. While some funds had not been used in compliance with HUD requirements, the City and the Authority had commenced strengthening the controls, and these changes should ensure compliance. Additionally, the City and the Authority repaid $14,766 that had not been used in compliance with the Block Grant. We did not identify any conditions that required us to recommend corrective action. Issue Date: November 29, 2005 Title: Review of Worcester Housing Authority, Worcester, MA, Identified $1.9 Million of its Public Housing Operating Funds Used for Non-Program PurposesWe reviewed the Housing Choice Voucher program and the Public Housing Operating Fund program at the Worcester Housing Authority (Authority). This audit was conducted as part of our fiscal year 2005 annual audit plan. Our objectives were to determine whether the Authority improperly used Federal funds for expenses of its State programs, and whether it properly allocated salary and other expenses to its Housing Choice Voucher program and Public Housing Operating Fund program. The Authority did not administer its federal funds in compliance with the financial provisions of its annual contributions contracts. Specifically, the Authority used its Public Housing Operating Funds to pay expenditures for state-subsidized housing programs and other federal programs, and did not properly allocate salary and benefit expenses to its Housing Choice Voucher program and Public Housing Operating Fund program. These conditions occurred because the Authority did not follow the internal controls that it established to ensure compliance with its annual contributions contracts and HUD regulations. The Executive Director stated that he made a decision to loan Public Housing Operating Fund reserves to pay state expenses until the state reimbursed the Authority for its expenses. Also, the salary and benefits were not charged to the programs using a supported basis to ensure that only reasonable costs were charges for the operation of the programs. As a result, the Authority did not have more than $1.9 million available for its Public Housing Operating Fund program. Additionally, without an adequate basis, the Authority could not support the salary and benefits expenses charged to its Housing Choice Voucher and Public Housing Operating Fund programs. We recommend that the director of the Office of Public Housing require the Authority to • Cease the practice of using Public Housing Operating funds to pay for nonprogram costs, such as the $1.9 million used from and owed to the Public Housing Operating Fund program as of August 31, 2005. • Reimburse its revolving fund the amounts owed by its programs on a monthly basis. • Conduct a time study to determine the appropriate allocation of salaries and benefits for its federal programs. • Develop and implement a HUD-approved cost allocation plan for salaries and employee benefits, and adjust its fiscal year 2006 accounting records accordingly. Issue Date: August 31, 2005 Title: Inappropriate Use of Federal Funds Led to $3.5 Million Deficit in HUD Programs Administered by Fall Rivers Housing Authority, Fall Rivers, MassachusettsWe reviewed the Housing Choice Voucher, the Public Housing Operating Fund, and the Public Housing Capital Fund programs at the Fall River Housing Authority (Authority). The audit was conducted as part of our fiscal year 2005 annual audit plan. Our objective was to determine whether the Authority used its federal funds in compliance with the financial provisions of its annual contributions contracts. The Authority did not administer its federal funds in compliance with the financial provisions of its annual contributions contracts. The Authority used federal funds to pay expenditures for state-subsidized housing programs This condition occurred because the Authority failed to follow the internal controls that it established to ensure compliance with its annual contributions contracts and prevent the use of federal funds to pay state program expenses. As a result, the Authority did not have $3.5 million available to administer its federal programs. Additionally, the Authority over reported its voucher utilization because it did not have adequate controls to ensure accurate reporting of voucher utilization. We recommend that the director of the Office of Public Housing
require the Authority to Issue Date: January 19, 2005 Title: Massachusetts Housing Finance Agency - Multifamily Property Demonstration Disposition ProgramWe audited the Demonstration Disposition (Demo-Dispo) program administered by Massachusetts Housing Finance Agency (Agency). The objective of our audit was to determine the propriety of the use of funds under the U.S. Department of Housing and Urban Development's (HUD) Demo-Dispo program by the Agency and the extent of the Agency's oversight of the program. Under the Demo-Dispo program, HUD provided the Agency more than $535 million during the 10-year period ended May 2004. As a result of HUD investing over $535 million under the program, HUD gained 11 revitalized properties with 1,850 units. Our review disclosed that the costs charged by the Agency for the expenses reviewed were supported and reasonable and met the requirements of the agreement between HUD and the Agency. Issue Date: December 16, 2003 Title: Audit Survey of Boston Housing Authority's - Capital Fund ProgramWe performed an audit survey of the Boston Housing Authority's (BHA) Capital Fund Program (CFP) procurement process. The audit objective was to assess the appropriateness of the BHA's CFP procurement process, for the period April 1, 2000 through March 31, 2003, to ensure that the BHA was: � Assessing management controls to safeguard CFP funds from possible waste, loss, and misuse of funds. � Managing its CFP program and operations efficiently, effectively, and economically. � Adhering to the terms and conditions of the Voluntary Compliance Agreement (VCA) that was created because the needs for accessible units for persons with impairments were not adequately being met. � Complying with the terms and conditions of its Annual Contributions Contract, HUD's Capital Fund Program regulations, Massachusetts General Law 30B - Uniform Procurement Act, Chapter 149, Sections 44A-J, Competition for Bidders on Construction, and HUD requirements under 24 CFR 85.36. Issue Date: December 10, 2003 Title: Springfield Housing Authority Springfield, MassachusettsWe completed an audit of the Springfield Housing Authority (SHA), located in Springfield, Massachusetts. The primary purpose of our audit was to determine whether the SHA is administering its public housing and Section 8 programs efficiently, effectively, economically, and in compliance with the terms and conditions of its Annual Contributions Contract, applicable laws, HUD regulations and other applicable directives. Our report contains eight findings with recommendations requiring action by your office. The eight findings address: (1) Housing Quality Standards; (2) Conflicts of Interest; (3) Capital Fund Program; (4) Management Controls; (5) Cost Allocation; (6) Section 8 Rent Reasonableness; (7) Inaccurate Performance and Financial Data; and (8) Contract Procurement and Program Monitoring. Issue Date: November 7, 2003 Title: City of Springfield, Massachusetts,Selected Activities funded through the Community Development Block Grant, HOME Grant, and Urban Development Action Grant, Springfield, MassachusettsWe reviewed 33 loans awarded by the City of Springfield (City) that were funded through Community Development Block Grants, HOME grants, and miscellaneous income generated by Urban Development Action Grants during the period January 1, 1996 through March 31, 2001. The 33 loans totaled $691,803. Our review was initiated as a result of several newspaper articles, which reported allegations that the Springfield, MA Office of Community Development was misusing Federal funds. Our primary objective was to determine whether certain loans were awarded in accordance with the City's policies, the City's procedures, and applicable HUD regulations. Our review was limited in nature and focused on specific loans within the City's community development programs. The issues identified in our report deal with administrative and internal controls activities that we feel are necessary to bring to the City's attention now, even though many issues surrounding the City's management actions remain a continuing interest to our office as well as other Federal agencies. This report does not absolve or exonerate any individual or entity from civil, criminal or administrative liability or claim resulting from future actions by the Department of Housing and Urban Development and other Federal agencies. Our audit disclosed problems with the City's management of Community Development Block Grants (CDBG), HOME funds, and miscellaneous income generated by the Urban Development Action Grants (UDAG). The City did not always comply with its own policies and procedures, follow HUD program requirements, or maintain essential documentation. In addition, the City lacked effective internal controls in some areas. Of the $691,803 in costs reviewed, we questioned $674,194. Issue Date: September 25, 2003 Title: CW Capital LLC Multifamily Accelerated Processing Lender
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Content Archived: September 9, 2010 | |||||||||||||||||||
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