Maine Audit Reports
Issue
Date: August 28, 2006
Audit
Report No. 2006-BO-1011
File Size: 1.02MB
Title:
The Portland Housing Authority, Portland, Maine, Did Not Use Reserve
Funds or Properly Allocate Employee Costs, Resulting in Questioned
Costs of More Than $850,000
We reviewed
the Section 8 Housing Choice Voucher program (Voucher program) at
the Portland Housing Authority (Authority) as part of our fiscal
year 2006 annual audit plan. Our objective was to determine whether
the Authority properly administered its Voucher program in accordance
with its annual contributions contracts and U.S. Department of Housing
and Urban Development (HUD) requirements.
The
Authority generally administered its Voucher program in accordance
with its annual contributions contracts and HUD requirements. However,
it did not use its Section 8 administrative fee reserves in a timely
manner or properly allocate salary and employee benefits expense
to the Voucher program.
In February
2003, the Authority transferred Section 8 administrative fee reserves
to its local programs account, but as of March 2006, it had not
used $647,814 of these reserve funds for program or other housing
purposes. This occurred because the Authority (1) did not implement
its Board resolution donating $550,000 to the Authority's non-profit
entity, the Portland Housing Development Corporation (PHDC), (2)
lacked specific plans to use available funds, and (3) was unaware
that reserve funds must be expended to be considered used. The Authority
also undercharged its Voucher program by $158,034 in salary and
employee benefits expense because its cost allocation procedures
improperly charged the program costs to its Public Housing Capital
Fund (Capital Fund) program when the Voucher program had funding
shortfalls. The Authority agreed to establish quantifiable and verifiable
procedures, which should reduce future Capital Fund program costs
by $44,336 during the next 12 months.
We recommend
that the director of the Office of Public Housing, Boston, Massachusetts,
require the Authority to (1) repay to its Section 8 program the
unused portion of $647,814 in administrative fee reserve funds transferred
to its local programs account and provide supporting documents for
verification of the $158,034 in transferred reserve funds to the
Capital Fund program, (2) identify current and valid uses for the
remaining Section 8 administrative reserves ($489,780), and (3)
establish and implement formal written procedures to properly allocate
costs to the benefiting programs, thereby reducing future Capital
Fund program expenses by $44,336. In addition, we recommend that
HUD verify the repayment of $158,034 to the Authority's Capital
Fund program for ineligible administrative expenses.
Issue Date: November 4, 2003
Audit
Memorandum No.: 2004-BO-1002
File Size: 532.2KB
Title: Family Living Adult Care Center FHA Project Number 024-22019
Biddeford and Saco, Maine
Our review disclosed that the Family Living project has suffered
serious financial problems, including a default on the HUD-insured
mortgage, and had ceased being a profitable entity. These problems
were caused by questionable cash distributions (withdrawals) from
the project bank accounts by the Owner. We consider these distributions,
totaling $455,439, to be �equity skimming� and to be in violation
of applicable Federal statutes and HUD regulations. By means of
these distributions, the Owner diverted project funds from June
2000 to February 2002 to other businesses he owned and for personal
expenses.
Issue Date: October 26, 2000
Audit
Related Memorandum No.: 01-BO-202-1801
File Size: 42KB
Title: Review of Complaint, Waterville Housing Authority, Waterville,
Maine
As requested by the Office of Public Housing, we performed an
audit survey of the Waterville Housing Authority's (WHA) Operations.
Our objectives were to determine the validity of a complaint identifying
six issues brought by a former WHA employee, and to identify any
other indicators of problems or deficiencies in WHA's operations,
particularly those conditions that may be indicators of fraud, waste
and mismanagement.
Our review determined that, of the problem areas identified by
the complainant, only one remained unresolved; the controlling and
safeguarding of fixed assets. WHA's internal controls in this area
are inadequate and need to be improved.
Issue Date: September 25, 2000
Audit
Related Memorandum No.: 00-BO-255-1803
File Size: 248KB
Title: Review of Program Recipients' Complaints, State of Maine
FIX ME Program, Maine State Housing Authority, Augusta, Maine
In response to several complaints received from program recipients
(homeowners), we performed a review of the Maine State Housing Authority's
(MSHA) FIX ME Program. Our objective was to evaluate MSHA's administration
of the program.
Our review identified deficiencies in the following areas: contractors
did not obtain the required local building permits and local building
inspections, work write-ups/cost estimates were not prepared by
CAP agencies, one CAP agency did not properly document the required
inspections of repair work, and MSHA's monitoring reviews of CAP
agencies (which administer the day to day operations of the program)
were limited in scope and did not disclose the type of problems
identified by the complainants. In our opinion, the overall design
and structure of the FIX ME Program allowed these problems to occur
because of a lack of adequate controls. MSHA needs to improve and
standardize their procedures, and establish clear lines of accountability
to prevent similar problems from recurring.
Issue Date: June 16, 1999
Audit
Report No.: 99-BO-202-1002
File Size: 84KB
Title: Westbrook HA HOPE I Implementation Grant Westbrook, ME
We conducted an audit of the Westbrook Housing Authority in specific
relation to its HOPE 1 Implementation Grant Program. The purpose
of our review was to determine whether the Housing Authority provided
adequate accountability for awarded Federal funds; maintained records
which identify the source and application of Federal funds; and
carried out its home ownership activities as described in its HUD
approved grant application.
Our audit disclosed a significant portion of HUD's HOPE 1 Implementation
Grant award of $717,000 to the Housing Authority was not needed
to accomplish the goal of home ownership. We found that the Housing
Authority is nearing completion of their home ownership program
and has sold over 75 percent of the units; however, only 13 percent
of grant funds were used toward accomplishing this goal. We further
found that the Housing Authority did not use sale proceeds of $420,000
to accomplish stated objectives in their grant application; that
grant funds and sale proceeds were commingled with the low income
housing general fund; and that such funds were used for unauthorized
and unrelated purposes including non-federal assisted housing programs.
Content Archived: September 10, 2010