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New Mexico Audit Reports
Date Issued: February 16, 2006
Title: Albuquerque Housing Services, Albuquerque, New Mexico, Generally Complied with HUD�s Standards
We conducted a review of Albuquerque Housing Services' (Housing Services) Section 8 program to determine whether Housing Services operated its Section 8 programs in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We determined Housing Services generally followed HUD's requirements. However, we informed Housing Services, the director of the City of Albuquerque's Department of Family and Community Services, and HUD's program center coordinator of minor deficiencies through a memorandum, dated February 16, 2006. Since Housing Services generally complied with HUD's requirements, we did not recommend corrective action or request a written response.
Date Issued: July 2, 2003
Title: Citizen Complaint Housing Rehabilitation Program Department of Family and Community Services Albuquerque, New Mexico
In response to a citizen complaint, we reviewed the City of Albuquerque's (City) Housing Rehabilitation Program (Program). The overall objective was to determine whether the City managed its Program in accordance with City and HUD requirements. Specific review objectives included determining whether the City: (1) selected, managed, and monitored projects in accordance with City and HUD requirements; (2) originated and serviced loans in accordance with City and HUD requirements; and (3) selected contractors in accordance with procurement policies and procedures.
Overall, the City's Program complied with City and HUD requirements. However, the City could improve its management of the Program. Specifically, the City needs to strengthen its development of cost estimates including explicitly identifying the work required to rehabilitate a home. Further, the City should better advertise its Program. Additionally, the City should better document the information it provides to HUD. In its response, the City agreed to implement the recommendations.
We recommend HUD's CPD Director require the City to: (1) develop and implement cost estimation procedures for identifying the work and costs needed to rehabilitate a home; (2) revise and implement procedures regarding the creditworthiness of contractors; (3) develop and implement procedures approving demonstration programs; (4) develop and implement a comprehensive advertising program for its rehabilitation program; and (5) assure the accuracy of the information reported to HUD. In a May 30, 2003 discussion, the New Mexico CPD Director stated that he had reviewed the draft report and agreed with the recommendations.
Date Issued: September 30, 2002
Title: New Mexico Public Interest Education Fund Outreach and Training Assistance Grants and Public Entity Grant, Albuquerque, New Mexico
We completed an audit of the New Mexico Public Interest Education Fund (Education Fund) Outreach and Training Assistance Grant (OTAG) and three Public Entity Grants. The audit determined that the Education Fund engaged in lobbying activities. Also, the Education Fund expended over $14,400 on ineligible activities and did not have sufficient documentation to support over $5,000 in grant expenditures. Our report contains eight recommendations to address the issues identified in the report.
Date Issued: November 20, 2000
Title: Albuquerque Title Company, Inc. Closing Agent Contract, Albuquerque, NM
We performed an audit of Albuquerque Title Company, Inc. (Albuquerque Title), a closing agent for HUD, as part of a nationwide effort to review closing agents. Our audit objective was to determine whether management controls were adequate to ensure the prevention of fraud, waste, and abuse. To meet this objective, we performed audit steps to determine whether Albuquerque Title complied with the terms and conditions of its closing agent contract. Overall, Albuquerque Title�s controls were insufficient to ensure that it complied with its HUD contract. Instead, Albuquerque Title�s overall performance as a closing agent was substandard. In addition, Albuquerque Title entered into its current contract knowing that it could not meet the contract�s terms. Specifically, Albuquerque Title improperly allowed third parties to conduct closings because it could only perform closings in three New Mexico counties.
Albuquerque Title�s overall performance as a closing agent was substandard. Albuquerque Title did not comply with all of the terms and conditions of its closing agent contract. Albuquerque Title did not: (1) table fund closings; (2) timely deposit or wire sales proceeds to HUD; (3) timely record Special Warranty Deeds; (4) properly request, document, compute, or collect extensions and extension fees; (5) ensure that all buyers received clear title; (6) charge HUD the correct wire fee; (7) exercise due diligence to detect and prevent administrative errors; and (8) maintain case files by FHA case number. Poor performance occurred because Albuquerque Title either did not follow its contract, did not understand HUD�s procedures, or did not exercise due care to prevent errors. As a result, HUD has no assurance that Albuquerque Title properly conducted closings.
Even though its contract prohibited third-party closings, Albuquerque Title did not perform the closing in 51 (or 65 percent) of 79 files reviewed. Other title companies performed the closings because Albuquerque Title was only able to conduct closings in three New Mexico counties. Yet, Albuquerque Title collected its closing agent fee from HUD for all 51 closings. As a result, HUD paid $7,650 in ineligible fees. Further, when another title company performed the closing, Albuquerque Title did not pay them for their services. Thus, the other title companies often required the purchasers to purchase title insurance as compensation.
The findings are systemic in nature. However, Albuquerque Title�s contract with HUD has expired and they chose not to re-bid. Thus, we will make no recommendations about the contract. Yet, HUD needs to recover ineligible fees totaling $7,904 and determine whether additional questioned fees are owed.
We conducted our exit conference with Albuquerque Title on April 9, 1999. We provided a copy of the draft report to Albuquerque Title on September 9, 2000. Albuquerque Title provided us with written comments on October 17, 2000, which are included in this final report.
1A. Require Albuquerque Title to reimburse HUD $40 for ineligible wire transfer fees on the 79 closing files reviewed.
1B. Determine the number of sales closed by Albuquerque Title
as part of its closing agent contract with HUD. Then, require Albuquerque
Title to reimburse HUD for any additional ineligible wire transfer
fees on any other HUD closings, which potentially could be $103.
Date Issued: September 8,1999
Title: Limited Review of Operations Northern Pueblos HA, Santa Fe, NM
NPHA has suffered and continues to suffer from serious administrative deficiencies which affect the management and control of its housing operations. Problems noted during our review included (1) poor management of procurement activities, including the failure to ensure fair and open competition during the procurement process, ineffective contract administration resulting in at least $34,000 of contract overpayments, questionable payments of $122,000 and the failure to ensure work completion in accordance with contract specifications; (2) inadequate accounting and cash controls which allowed the theft of over $16,000 of homebuyer payments to go undetected; (3) abuse of travel ($17,450 ineligible and $3,971 unsupported travel costs); and (4) failure to prudently invest excess funds.
We attributed these problems to several factors, including lack of or inadequate procedures and controls and intentional disregard of existing procedures and federal requirements. Problems with accounting and cash controls were further exacerbated by NPHA�s failed attempts to implement a computerized accounting and management control system costing over $200,000.
NPHA has taken steps to strengthen its controls over cash and investments and to improve its procurement and contract management systems. However, problems continue to exist which place its housing programs at substantial risk of fraud, waste, or abuse. We are recommending that NPHA refund money spent for ineligible expenses to its project accounts; resolve unsupported costs; and adopt and implement management controls to ensure that the deficiencies identified in this report do not reoccur.
Date Issued: September 27, 1996
Title: Procurement of Fee Accounting Services, Espanola, NM
During the survey we did not note any indicators of abusive practices or irregularities that would warrant an audit. However, we did note one item involving the procurement of fee accounting services, which HUD had previously communicated to the Executive Director. Although the City initially procured fee accounting services in 1990 in accord with HUD requirements, the City continued to use the fee accountant after the contract expired. Thus, the City violated HUD requirements by not properly procuring a subsequent contract for professional fee accounting and consulting services. Based on prices for similar services, the City used HUD funds to pay about $18,340 more than the reasonable cost of regular fee accounting services and incurred additional consulting services totaling $13,368, which had not been identified in the City's budget submissions to HUD for the Low Rent Program. The City expended the $31,848 in questioned costs during its fiscal years 1992, 1993, 1994, and 1995.
Issue Date: July 8, 1996
Title: All Indian Pueblo HA, Albuquerque, NM
We found AIPHA's Tenant Relations and Finance Departments to be well managed. The AIPHA housing acquisition program appears to be a viable program, subject to further legal review, which has resulted in better quality homes and in some cases significant economic benefits to tribal governments and their members. But recent management actions, to acquire housing without monitoring contractors or misusing operating reserves for development purposes reflect AIPHA's continuing administrative deficiencies. We found that AIPHA has not adequately administered its Comprehensive Grant program, and has failed to monitor contracting and procurement. Also, since our 1991 audit of AIPHA, receivables due from residents have continued to grow - and now total $870,000. These deficiencies require timely action if AIPHA is to provide quality housing to its 10 pueblos.
Content Archived: September 10, 2010