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West Virginia Audit ReportsIssue
Date: June 19, 2007 Title: Oak Mound Associates, Clarksburg, West Virginia, Improperly Billed HUD for Section 8 SubsidiesWe audited of Oakmound Apartments, Clarksburg, West Virginia, a 159-unit complex owned by Oak Mound Associates (Oak Mound). Our audit objective was to determine whether Oak Mound properly submitted bills for Section 8 subsidy according to contractual requirements and HUD regulations. Oak Mound did not always submit bills for its Section 8 contract subsidy in accordance with contractual requirements and HUD regulations. Our review of 10 tenant files identified problems with the monthly housing assistance payments in all 10 files. Oak Mound did not request the proper subsidy in 53 of the 121 (44 percent) individual monthly subsidy requests reviewed in these 10 files. The audit identified subsidy overpayments totaling $3,473, resulting from Oak Mound's failure to properly adjust its requests for housing assistance payments when tenant income increased ($2,626) and because Oak Mound improperly requested subsidies when units were vacant for up to 13 days ($847). Oak Mound also lacked proper documentation to support other housing assistance payments it received totaling $5,671. We recommend that the director of HUD's Multifamily Program Center direct Oak Mound to repay the contract administrator $3,473 from nonfederal funds for the ineligible housing assistance payments it received and provide documentation to support the $5,671 in questioned costs and, if any of the costs cannot be supported, reimburse the contract administrator from nonfederal funds. We further recommend that HUD direct Oak Mound to develop and implement policies and procedures to ensure that subsidy requests are accurate, fully supported by documentation in the tenant files, and maintained as required. Issue
Date: December 18, 2006 Title: The Housing Authority of the City of Weirton, Weirton, West Virginia, Needed to Improve Its Administration of Its HUD-Funded ProgramsWe audited of the Housing Authority of the City of Weirton's (Authority's) administration of its U.S. Department of Housing and Urban Development (HUD)-funded programs. Our objective was to determine whether the Authority properly administered its HUD-funded programs in accordance with HUD and federal requirements. The Authority did not properly administer its HUD-funded programs in accordance with HUD and federal requirements. It did not follow federal procurement regulations when awarding consultant and construction contracts, prevent conflict-of-interest situations from occurring, operate its family resource center as intended, properly allocate costs among its programs, and properly administer its Section 8 program. The Authority is currently working under a memorandum of agreement and other procedures with HUD to correct numerous deficiencies in its HUD programs, including most of the deficiencies identified in our audit. Because HUD is addressing program deficiencies with the Authority through a memorandum of agreement and other procedures, we did not recommend corrective action. Issue Date: December 3, 2004 Title: The Huntington Housing Authority, Huntington, WV, Did Not Properly Allocate Salary Costs to Its Affiliated Nonfederal EntitiesWe performed an audit of the Huntington Housing Authority's (Authority) relationship with its affiliated nonfederal entities. We performed this audit in response to a complaint. Our audit objective was to determine if the Authority properly used U.S. Department of Housing and Urban Development (HUD) funds to develop and support these entities. While the Authority was generally prudent and did not guarantee debt of its affiliated nonfederal entities, it sometimes improperly used HUD funds to develop and support its nonfederal entities. Specifically, it did not allocate all relevant salary costs to its affiliated Housing Development Corporation, contrary to its Annual Contributions Contract. As a result, from July 1999 to June 2003, the Authority improperly paid salaries estimated at $320,524 from federal funds for work its employees performed for this nonfederal entity. We recommended and the Authority agreed to develop a formal written method for allocating its future costs for services performed by its employees in support of its nonfederal entities. Issue Date: September 4, 2003 Title: Shawnee Hills, Incorporated, Charleston, West VirginiaWe completed a limited review of Shawnee Hills, Incorporated, a former management agent of HUD-assisted multifamily properties in response to a complaint. Shawnee Hills, Incorporated was a private not-for-profit company that operated comprehensive programs serving persons who were mentally ill, chemically dependent, developmentally disabled, or who otherwise required related behavioral health services. The company filed for protection Federal bankruptcy laws in May 2002. Our objective was to determine whether Shawnee Hills, Incorporated improperly used project operating income and Reserve for Replacement funds to sustain its own corporate operations. We were also asked to perform a formal accounting of these funds and determine if HUD's interests were protected. For the most part, Shawnee Hills, Incorporated's financial records were not auditable and therefore we could not perform a detailed review or accounting of the funds. However, our review did find that Shawnee Hills, Incorporated improperly used $9,000 Reserve for Replacement funds just prior to filing for protection under Federal bankruptcy laws. To ensure the government's interests are protected in the future we recommended that HUD initiate action, as appropriate, to prohibit Shawnee Hills, Incorporated and its Officers from being awarded any additional contracts with the Federal government. Issue Date: December 31, 2002 Title: Cities of Huntington, West Virginia and Ironton, Ohio Empowerment Zones Program, Huntington, West Virginia/Ironton, OhioHUD's Office of Inspector General completed an audit of the Cities of Huntington, West Virginia and Ironton, Ohio's Empowerment Zone Program. The objectives of our audit were to determine whether the Cities: (1) efficiently and effectively used Empowerment Zone funds; and (2) accurately reported the accomplishments of their Empowerment Zone Program to HUD. The audit was part of our Fiscal Year 2002 Annual Audit Plan. The audit was conducted based upon our survey results and two requests from Congress. The United States House of Representatives' Conference Report 107-272 directed HUD's Office of Inspector General to review the use of Empowerment Zone funds and to report our findings to the Senate Appropriations Committee. The United States Senate's Report 107-43 also requested us to review the use of Zone funds and report our audit results to Congress. We concluded that the Cities need to improve their oversight of Empowerment Zone funds and did not accurately report the accomplishments of their Empowerment Zone Program to HUD. Specifically, the Cities did not use $160,000 of Empowerment Zone funds in accordance with their Strategic Plan and the September 8, 1999 Agreement for the Marting Hotel Renovation project. We also found that the Cities inaccurately reported the accomplishments of their Empowerment Zone projects to HUD, and used Empowerment Zone monies to fund five projects that have not provided benefits to Empowerment Zone residents or benefited only 27 percent of Zone residents as of October 2002. Four of the five projects are scheduled for completion between June 2004 and June 2005, and the remaining project was completed in June 2001. We recommend that HUD's Director of Renewal Communities/Empowerment Zones/Enterprise Communities Initiative assure that the Cities of Huntington, West Virginia and Ironton, Ohio reimburse the Empowerment Zone Program for the inappropriate use of Zone funds and implements controls to correct the weaknesses cited in this report. Issue Date: November 12, 1997 Title: Survey of Management Agent Operations Human Resource Development Employment, Inc. (HRDE), Morgantown, West VirginiaOur review disclosed the following: Eastview Unity Apartments, Fairmount, WV - HRDE received $6,000 classified as a loan repayment when the project was not in a surplus cash position. The transaction was not approved by HUD as required by the Regulatory Agreement. - The surface layer of concrete on the auxiliary handicap ramp is spalling. Lincoln Unity Apartments, Branchland, WV - The third floor fire escape door was missing. Issue Date: August 20, 1997 Title: West Virginia Housing Development Fund HOME Program, Charleston, West VirginiaNo deficiencies were identified during site visits to the HOME properties or with the review of the WVHDF's files. No additional audit work is currently necessary. Issue Date: May 31, 1996 Title: City of Wheeling Survey of CDBG Program, Wheeling, West VirginiaOur survey disclosed the following: - An OIG appraisal supported the purchase price for the land acquired by the House of the Carpenter. - A review of subrecipient files disclosed no indication that direct financial benefits were derived by CDBG staff in the awarding of funds. - A sampling of the housing rehabilitation program, street improvements, police maintenance of force, and revolving loans disclosed no deficiencies. - On-site physical inspection of work for playground improvements, street improvements, and removal of architectural barriers confirmed contract work was performed.
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