U.S. Department of Housing and Urban Development District Office of the Inspector General Office of Audit, Box 42 Richard B. Russell Federal Building 75 Spring Street, SW, Room 330 Atlanta, GA 30303-3388 (404) 331-3369 April 26, 2000 Audit Related Memorandum No. 00-AT-202-1802 MEMORANDUM FOR: Boyce Norris, Jr., Director, Public Housing Division, 4APH FROM: Nancy H. Cooper District Inspector General for Audit-Southeast Caribbean, 4AGA SUBJECT: Misuse of HUD Funds Fort Valley Housing Authority Fort Valley, Georgia At your request, Dennis Durick of my staff assisted Jorge Torres of your staff during a limited review of the Fort Valley, Georgia Housing Authority. The review was performed because of alleged misuse of Authority funds. Based on our combined review, we found the following: • At least $19,600 in receipted cash was missing, and • Over $198,000 in CIAP funds was drawn by the Authority prior to a documented need. Please reply within 60 days on each recommendation describing: (1) the corrective action taken; (2) the proposed corrective action and a planned implementation date; or why action is not considered necessary. Also please furnish us copies of any correspondence or directives issued as a result of the review. Note that Handbook 2000.06 requires that management decisions be reached on all recommendations within 6 months of report issuance. It also provides guidance regarding interim actions and the format and content of your reply. If you have any questions, please contact me at (404) 331-3369. Attachments A - Findings and Recommendations B - Distribution Visit the Office of Inspector General on the World Wide Web at http://www.hud.gov/oig/oigindex.html Attachment A Findings and Recommendations 1. Funds of over $19,600 were missing. During our review, we identified issued rent receipts totaling over $19,600 that the Authority did not have cash to cover. We determined that the last bank deposit made by the Authority was dated April 10, 2000, and covered receipts that were issued during February 2000. We noted that this scheme has been going on for at least 2 years. The Authority only had cash on hand of $400 at the time of our visit. We believe that there may be more missing funds, since cash may have been collected and no receipts issued. However, our quick review did not readily identify any instances of this. We reported the cash shortage to the Authority’s Chairman and the Mayor of Fort Valley. As a result of these meetings, the records have been safeguarded and the Executive Director has been placed on temporary leave. We do not plan to perform any additional audit work at this time. We are referring this matter to the Special Agent in Charge. Recommendations: We recommend that your office: 1A. Take appropriate action to assure that controls are in place to safeguard the Authority’s assets. 1B. Apply appropriate sanctions to the individual or individuals once the investigation is completed. 2 2. Excess funds were idle During our review, we noted that the Authority had over $200,000 in its bank account. This balance was primarily a single draw of CIAP funds totaling $198,000 made in October 1999. The Executive Director said that he drew the funds based on verbal instructions from your office. He did not remember the individual’s name. He said he was told to draw the funds by March 2000 or they would be lost. The Executive Director said he planned to use the funds to perform modernization work on the developments, but did not have any definite plans at this time. This appears to be in conflict with LOCCS procedures and U.S. Treasury requirements that funds be spent within 3 days of receipt. We are also concerned that due to the current conditions the funds may be vulnerable to abuse. Recommendations: We recommend you: 2A. Provide appropriate documentation to support your Office’s actions in this matter. 2B. Require the Authority to return the funds to HUD. 3 Attachment B DISTRIBUTION Chairman, Board of Commissioners, Ft. Valley Housing Authority Deputy Secretary, SD (Room 10100) Chief of Staff, S (Room 10000) Special Assistant to the Deputy Secretary for Project Management, SD (Room 10100) Acting Assistant Secretary for Administration, S (Room 10110) Assistant Secretary for Congressional and Intergovernmental Relations, J (Room 10120) Senior Advisor to the Secretary, Office of Public Affairs, S, (Room 10132) Deputy Assistant Secretary of Administrative Services/Director of Executive Secretariat, AX (Room 10139) Director of Scheduling and Advance, AL (Room 10158) Counselor to the Secretary, S (Room 10234) Deputy Chief of Staff, S (Room 10226) Deputy Chief of Staff for Operations, S (Room 10226) Deputy Chief of Staff for Programs and Policy, S (Room 10226) Director, Office of Special Actions, AK (Room 10226) Deputy Assistant Secretary for Public Affairs, W (Room 10222) Special Assistant for Inter-Faith Community Outreach, S (Room 10222) Executive Officer for Administrative Operations and Management, S (Room 10220) Senior Advisor to the Secretary for Pine Ridge Project, W, (Room 10216) General Counsel, C (Room 10214) Director, Office of Federal Housing Enterprise Oversight, O (9th Floor Mailroom) Assistant Secretary for Housing/Federal Housing Commissioner, H (Room 9100) Office of Policy Development and Research, R (Room 8100) Inspector General, G (Room 8256) Assistant Secretary for Community Planning and Development, D (Room 7100) Assistant Deputy Secretary for Field Policy and Management, SDF (Room 7108) Government National Mortgage Association, T (Room 6100) Assistant Secretary for Fair Housing and Equal Opportunity, E (Room 5100) Chief Procurement Officer, N (Room 5184) Assistant Secretary for Public and Indian Housing, P (Room 4100) Chief Information Officer, Q (Room 3152) Director, Office of Departmental Equal Employment Opportunity, U (Room 5128) Director, Office of Departmental Operations and Coordination, I (Room 2124) Chief Financial Officer, F (Room 2202) Director, HUD Enforcement Center, 451 Portals Bldg, Suite 200, Washington, DC 20140 Director, Real Estate Assessment Center, X, 1280 Maryland Avenue, SW, Suite 800 Director, Office of Multifamily Assistance Restructuring, Y, 4000 Portals Building Director, Public Housing Division, 4APH Deputy Chief Financial Officer for Finance, FF (Room 2202) (2) Director, Office of Budget, FO (Room 3270) 4 Secretary's Representative, 4AS Audit Liaison Officer, 3AFI Audit Liaison Officer, Office of Public and Indian Housing, PF (Room P8202) Departmental Audit Liaison Officer, FM (Room 2206) Acquisitions Librarian, Library, AS (Room 8141) Counsel to the IG, GC (Room 8260) HUD OIG Webmanager-Electronic Format Via Notes Mail (Cliff Jones@hud.gov) Public Affairs Officer, G (Room 8256) Director, Housing and Community Development Issue Area, U.S. GAO, 441 G Street N.W., Room 2474, Washington DC 20548 ATTN: Judy England-Joseph The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, United States Senate, Washington DC 20510-6250 The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs, United States Senate, Washington DC 20510-6250 The Honorable Dan Burton, Chairman, Committee on Government Reform, United States House of Representatives, Washington DC 20515-6143 The Honorable Henry A. Waxman, Ranking Member, Committee on Government Reform, United States House of Representatives, Washington, DC 20515-4305 Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O'Neil House Office Building, Washington, DC 20515-6143 Steve Redburn, Chief, Housing Branch, Office of Management and Budget, 725 17th Street, NW, Room 9226, New Executive Office Bldg., Washington, DC 20503 Sharon Pinkerton, Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, Drug Policy and Human Resources, B373 Rayburn House Office Bldg., Washington, DC 20515 5
Misuse of HUD Funds, Fort Valley Housing Authority, Fort Valley, Georgia
Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-04-26.
Below is a raw (and likely hideous) rendition of the original report. (PDF)