Issue Date
September 30, 2009
Audit Report Number
2009-AT-1015
TO: Olga I. Sáez, Director, Public and Indian Housing, San Juan Field Office, 4NPH
//signed//
FROM: James D. McKay, Regional Inspector General for Audit, Atlanta Region, 4AGA
SUBJECT: The Puerto Rico Public Housing Administration, San Juan, Puerto Rico,
Mismanaged Its Capital Fund Financing Program and Inappropriately
Obligated $32 Million in Recovery Act Funds
HIGHLIGHTS
What We Audited and Why
We audited the Puerto Rico Public Housing Administration’s (authority) Capital
Fund Financing Program (Financing Program) as part of the Office of Inspector
General’s (OIG) strategic plan goals to improve the U.S. Department of Housing
and Urban Development’s (HUD) fiscal accountability. We selected the authority
based on the size of its Financing Program. Our audit objectives were to
determine whether the authority obligated and expended the 2003 Financing
Program funds in accordance with HUD requirements, the authority’s financial
management system complied with program requirements, the authority
completed the proposed modernization activities under its 2003 Financing
Program, and the authority had the capacity to administer additional funds under
the American Recovery and Reinvestment Act (Recovery Act) of 2009.
What We Found
The authority did not manage the 2003 Financing Program in an economical,
efficient, and effective manner. It did not complete all of the proposed
rehabilitation activities and did not expend all of the borrowed private capital. As
a result, it did not meet its rehabilitation goals. In addition, the authority
disbursed more than $57.4 million in capital funds to pay for interest charges on
unused borrowed capital that did not provide the intended benefits to the public
housing program or its residents.
The authority also could not account for more than $18.7 million in program income
and did not use $50.3 million in program income to defray program costs. In
addition, it did not maintain accurate and current accounting records and provided
HUD inaccurate information on its Financing Program activities. As a result, its
internal controls were not sufficient to safeguard assets or ensure that funds were
used in accordance with applicable requirements, and HUD lacked assurance
regarding program accomplishments.
The authority inappropriately obligated $32.12 million in Recovery Act funds to
supplant expenditures from other nonfederal funds in violation of its annual
contributions contract with HUD. This deficiency occurred because the authority
substituted the obligations related to nonfederal funds with Recovery Act funds.
As a result, the authority will use Recovery Act funds to pay for expenditures that
were the responsibility of nonfederal sources.
What We Recommend
We recommend that the Director of the San Juan Office of Public Housing require
the authority to reimburse more than $57.4 million in unallocable and ineligible
Financing Program expenses, account for more than $18.7 million in unrecorded
program income, and develop and implement an action plan to use $50.3 million
in program income to defray program costs. We also recommend that the authority
establish better controls to ensure that the Financing Program has (1) a financial
management system that complies with HUD requirements and (2) procedures to
ensure that program goals are achieved in a timely and efficient manner and avoid
unreasonable/unnecessary expenses. In addition, we recommend that the Director
require the authority to properly account for its 2003 Financing Program receipts
and disbursements.
The Director should also require the authority to deobligate more than $31 million in
Recovery Act funds that were contracted before the authorized obligation start date
and implement adequate procedures and controls to ensure that Recovery Act
funds are used effectively, efficiently, and in accordance with applicable
requirements.
For each recommendation without a management decision, please respond and
provide status reports in accordance with HUD Handbook 2000.06, REV-3.
Please furnish us copies of any correspondence or directives issued because of the
audit.
2
Auditee’s Response
We discussed the findings with authority and HUD officials during the audit. We
provided a copy of the draft report to the authority on August 21, 2009, for its
comments and discussed the report with authority officials at the exit conference
on September 10, 2009. The authority provided written comments on September
15, 2009, and generally disagreed with our findings.
The authority’s response, along with our evaluation of that response, can be found
in appendix B of this report. Attachments to the authority’s comments were not
included in the report but are available for review upon request.
3
TABLE OF CONTENTS
Background and Objectives 5
Results of Audit
Finding 1: The Authority Mismanaged Its Financing Program 7
Finding 2: The Authority’s Financial Management System Did Not Fully 12
Comply with HUD Requirements
Finding 3: The Authority’s Recovery Act Funds Will Inappropriately Supplant 17
Expenditures from Other Sources
Scope and Methodology 21
Internal Controls 23
Appendixes
A. Schedule of Questioned Costs and Funds to Be Put to Better Use 25
B. Auditee Comments and OIG’s Evaluation 26
C. Schedule of Rehabilitated Units 45
4
BACKGROUND AND OBJECTIVES
The Puerto Rico Public Housing Administration (authority) is a governmental entity created by
Commonwealth Law No. 66, dated August 17, 1989. The authority provides a full range of services
related to the rehabilitation, operation, and maintenance of its public housing projects. It is the
second largest public housing agency in the nation, with more than 56,000 dwelling units
scattered throughout Puerto Rico. The authority’s records are maintained at 606 Barbosa
Avenue, San Juan, Puerto Rico.
The Capital Fund Financing Program (Financing Program) allows a housing agency to borrow
private capital (through bonds or conventional bank loans) to make improvements to its housing
developments. The U.S. Department of Housing and Urban Development (HUD) allows a
housing agency to pledge a portion of its future annual capital funds to make debt service
payments for the amount borrowed under the Financing Program. Housing agencies pursuing
any type of Financing Program activities must follow all statutory and regulatory requirements
related to the Public Housing Capital Fund program in regard to the development and
implementation of their Financing Program proposal.
In December 2003, HUD approved the authority’s Financing Program proposal to issue 2003
bonds with total proceeds of $693 million for the rehabilitation of more than 8,000 units in 44
public housing projects. The authority’s deadline for obligating the 2003 bonds was December
2005, and the deadline for expending 100 percent of the bonds was December 2007.1
In October 2007, the authority informed HUD that it did not anticipate being able to fully expend
the 2003 bond proceeds within the prescribed timeframe and requested an extension to the
obligation deadline. The authority attributed the delay to the complexity and the multiple facets
of the 2003 bond transaction. HUD approved a one-year extension on December 7, 2007, that
extended the obligation deadline to December 2006 and the expenditure deadline to December
2008.
In June 2008, the authority submitted a proposal to HUD to use unexpended 2003 bond proceeds
to pay off part of the existing debt, issue new bonds of approximately $380 million, and provide
for a $235 million tax credit investment. HUD approved the proposal in June 2008. In August
2008, the unexpended 2003 bond proceeds were placed in escrow to redeem the bonds as they
reached maturity.
On February 17, 2009, President Obama signed into law the American Recovery and
Reinvestment Act of 2009 (Recovery Act). The Recovery Act provided additional Public
Housing Capital Fund program funds to public housing agencies across the country to create and
preserve jobs and to help stabilize the economies of state and local governments. The Recovery
Act imposes strict obligation and expenditure deadlines that housing agencies must meet to avoid
strict recapture provisions. On March 18, 2009, HUD granted more than $174.5 million in
1
Regulations at 24 CFR (Code of Federal Regulations) 905.120 provide that at least 90 percent of the funds must be
obligated before the end of the second year and fully expended before the end of the fourth year after the funds
become available.
5
capital funds authorized under the Recovery Act. As of July 2009, the authority was responsible
for managing more than $1.3 billion in funding for modernization of its public housing projects.
Our audit objectives were to determine whether the authority obligated and expended the 2003
Financing Program funds in a timely manner as prescribed by regulations, the authority’s financial
management system complied with HUD requirements, the authority completed all of the
proposed rehabilitation efforts, and the authority had the capacity to administer funds received
under the Recovery Act.
6
RESULTS OF AUDIT
Finding 1: The Authority Mismanaged Its Financing Program
The authority did not manage the 2003 Financing Program in an economical, efficient, and
effective manner. It did not complete all of the proposed rehabilitation activities and did not
expend all of the borrowed private capital. These deficiencies occurred because the authority’s
management did not implement adequate controls to effectively plan and coordinate the
execution of its Financing Program activities. As a result, the authority did not meet its
rehabilitation goals. In addition, it disbursed more than $57.4 million in capital funds to pay for
interest charges on unused borrowed capital that did not provide the intended benefits to the
public housing program or its residents.
Incomplete Modernization
Efforts
In December 2003, HUD approved the authority’s Financing Program proposal to
issue more than $693 million in bonds for the rehabilitation of more than 8,000
units at 44 public housing projects. The authority’s deadline for obligating the
2003 bonds was December 2005, and the deadline for completing the
rehabilitation work and expending 100 percent of the bond proceeds was
December 2007. In October 2007, the authority informed HUD that it did not
anticipate being able to fully expend the 2003 bond proceeds as required by
section 9(j)(5) of the United States Housing Act of 1937 and requested a one-year
extension of the obligation deadline for reasons allowed under section 9(j)(2).
The authority’s reasons included multiple demanding issues in managing its large
portfolio, complex and multiple facets involving a number of parties, and
relocation of more than 350 families. On December 7, 2007, HUD granted a one-
year extension to the obligation/expenditure date based upon the authority’s
request and a review of relevant information. Thus, the obligation deadline was
extended to December 2006, and the expenditure deadline was extended to
December 2008.
The authority had previously informed HUD that it obligated 100 percent of the
funds in November 2005 and thus had met the obligation deadline. Therefore, the
October 2007 extension request was not justified. Further, we asked the authority
to identify the number of units that were completely rehabilitated between the
date of the HUD approval letter and the revised expenditure deadline of
December 2008. The authority stated that the information was not readily
available, and it would need to review project files month by month to extract the
information. Thus, the authority lacked information to demonstrate whether the
extension resulted in a significant increase in rehabilitated units.
7
On March 12, 2009, the authority provided us with a summary schedule showing
the status of the rehabilitation work associated with the 2003 bonds. The schedule
showed that of the 44 proposed projects, 16 had been completed, 18 were in
process, and 10 had not been funded. Of the 8,256 units that the authority had
planned to rehabilitate with the 2003 bonds, only 3,606 had been completed.
Thus, the authority did not complete the rehabilitation work in about 56 percent of
the proposed dwelling units (see appendix C). Therefore, it did not fulfill its
rehabilitation objectives, and tenants were deprived of the intended benefits of the
Financing Program.
Inadequate Planning and
Coordination
Regulations at 24 CFR (Code of Federal Regulations) 968.125 provide that
housing agencies shall undertake the modernization activities in a timely,
efficient, and economical manner.
Authority management did not implement adequate controls and failed to provide
timely and efficient administration of its 2003 Financing Program activities,
resulting in delays in the rehabilitation of the public housing units. For example,
at the Jardines de San Fernando housing project, the authority notified the
contractor to commence the rehabilitation work, although the construction permits
had expired and required environmental studies had not been performed. Because
the authority had to correct these violations, the rehabilitation work at the housing
project was postponed.
Rehabilitation efforts at Jardines de San Fernando were not completed.
The rehabilitation contract for Jardines de San Fernando was awarded on May 3,
2005, with a completion date of July 10, 2008, which was beyond the December
8
2007 expenditure deadline date. According to the authority, about 41 percent of
the rehabilitation work had been completed as of March 2009. Our site visit on
April 23, 2009, confirmed that the rehabilitation efforts were still in progress.
The new target completion date for the rehabilitation work is September 2010.
The Jardines de Montellanos housing project also had delays in its rehabilitation
efforts. Although the contract was awarded on November 28, 2006, the authority
did not notify the contractor to commence the rehabilitation work until October
22, 2008. The authority informed us that the notice to proceed was not provided
in a timely manner, because the authority’s project design contract had expired,
and the authority had to rebid the services before the rehabilitation work started.
The contractor’s offices at Jardines de Montellanos were closed.
On April 23, 2009, we visited Jardines de Montellanos and found that the
rehabilitation had not commenced. According to the authority, the contractor’s
offices at the site had been closed for more than a year, and the contractor refused
to commence the rehabilitation, alleging an increase in construction costs. The
contractor claimed that it could not complete the work at the quoted price and
attributed the cost increase to the authority’s untimely notification to proceed with
the work. The authority was negotiating with the contractor for a new timetable
to begin the rehabilitation efforts.
Other housing projects were experiencing delays in their rehabilitation efforts.
According to the summary schedule prepared by the authority, the rehabilitation
work at four construction sites was between 314 and 622 days behind schedule.
9
Construction Days behind
Housing project start date schedule Authority’s comments
Project lacks required endorsements from
Catañito Gardens Feb. 8, 2006 314
state agencies.
Poor management by general contractor
Arístides Chavier Aug. 1, 2005 379
and subcontractor.
Contractor lacks adequate administrative
Los Mirtos Dec. 15, 2004 619
and planning strategies.
Buildings have structural deficiencies.
El Coral Jan. 9, 2006 622
The authority did not take into consideration the Financing Program expenditure
requirements when it executed rehabilitation contracts for 12 housing projects.
When HUD approved the authority’s 2003 bonds, the deadline for expending 100
percent of the funds was December 2007.2 However, the authority awarded
contracts that were beyond the expenditure deadline. The contracts had end dates
that were between 205 and 921days after the expenditure deadline.
Contract Contract Number of days beyond
Housing project date end date expenditure deadline
Jardines de San Fernando May 3, 2005 July 10, 2008 205
La Lorenzana July 14, 2005 July 12, 2008 207
San Fernando Aug. 2, 2004 Nov. 4, 2008 322
Jardines de Campo Rico Oct. 27, 2005 Nov. 15, 2008 333
Las Violetas Dec. 13, 2005 Dec. 12, 2008 360
Villa Del Rio Dec. 13, 2005 Dec. 12, 2008 360
Jardines de Cupey Dec. 15, 2005 Dec. 14, 2009 727
Trina Padilla de Sanz Aug. 12, 2005 Feb. 5, 2010 780
Jardines de Montellanos Nov. 28, 2006 Mar. 12, 2010 815
Catañito Gardens Dec. 13, 2005 Mar. 17, 2010 820
Turabo Heights Oct. 6, 2005 Apr. 28, 2010 862
Arístides Chavier June 23, 2005 June 26, 2010 921
The above examples are not all-inclusive but show the authority’s ineffective
planning and poor coordination efforts regarding its Financing Program activities.
The authority’s management failed to ensure that Financing Program goals were
properly achieved in a timely and efficient manner.
Interest Paid for Unused Funds
The authority decided to pursue a mixed-financing modernization plan for its
public housing developments and submitted a proposal to HUD in June 2008. In
conjunction with the mixed-financing plan, the authority submitted a proposal to
use the unexpended 2003 bond proceeds to pay off part of the existing debt. HUD
approved the proposal in June 2008.
2
Regulations at 24 CFR 905.120 provide that at least 90 percent of the funds must be obligated before the end of the
second year and fully expended before the end of the fourth year after the funds become available.
10
In August 2008, more than $407 million in unexpended 2003 bond proceeds was
placed in escrow with the authority’s bond trustee to redeem the bonds as they
reached maturity. We estimate that of the $102 million in capital funds used to
pay for interest charges,3 more than $57.4 million was associated with the
unexpended 2003 bond proceeds. The authority used capital funds to make debt
service payments for borrowed funds that were not used. Regulations at 2 CFR
Part 225 provide that a cost is allocable to a particular cost objective if the goods
or services involved are chargeable or assignable to such cost objective in
accordance with relative benefits received. Therefore, the $57.4 million in
interest charges was not an allocable expense since the unexpended funds did not
benefit the authority’s public housing program or its residents.
Conclusion
Because the authority did not implement adequate controls, it failed to manage the
2003 Financing Program activities in an economical, efficient, and effective
manner. The authority did not complete all of the proposed rehabilitation
activities and was unable to expend all of the borrowed private capital in a timely
manner. It did not complete the rehabilitation efforts contained in the 2003
Financing Program proposal and used more than $57.4 million in capital funds to
pay for interest expenses on unused borrowed capital that did not benefit the
public housing developments or its residents. Management must address the
weaknesses identified in this report to assure HUD that it can administer the
Financing Program in an economical, efficient, and effective manner and achieve
program goals.
Recommendations
We recommend that the Director of the Office of Public Housing
1A. Require the authority to reimburse the Public Housing Capital Fund
program from nonfederal funds $57.4 million paid for the unallocable
interest expenses.
1B. Require the authority to implement an adequate action plan to ensure that
rehabilitation efforts and program goals are achieved in a timely,
economical, efficient, and effective manner.
3
The authority pledged a portion of its future annual capital funds to make debt service payments for the amount
borrowed under the Financing Program.
11
Finding 2: The Authority’s Financial Management System Did Not
Fully Comply with HUD Requirements
The authority’s financial management system did not account for more than $18.7 million in
program income, and it did not contain accurate and current accounting records. In addition, the
authority did not use $50.3 million in program income to defray program costs and provided HUD
with inaccurate information on its Financing Program activities. These deficiencies occurred
because the authority’s management did not implement effective controls to ensure that the financial
information on its Financing Program activities was complete and accurate. As a result, the
authority’s internal controls were not sufficient to safeguard assets and ensure their use in
accordance with applicable requirements, and HUD lacked assurance regarding program
accomplishments.
Unsupported Program Income
According to HUD officials, investment earnings on Financing Program funds are
considered program income, and the receipts and expenditures of such income
must be recorded as part of the financial transactions and subject to applicable
requirements governing the use of Financing Program funds. The authority’s
accounting records did not show the disposition of more than $18.7 million in
program income generated by the Financing Program.
The authority’s records reflected that between December 2003 and September
2008, the Financing Program should have received more than $69.3 million in
program income associated with interest earnings.4 The general ledger showed
that as of September 2008, the authority had disbursed $257,244 of the program
income. Therefore, $69 million of the program income remained unexpended.5
We examined the Financing Program bank statements to verify that the
unexpended funds remained deposited at the authority’s financial institutions. Of
the $69 million in unexpended program income, the bank statements reflected a
balance of only $50.3 million as of September 2008. The authority’s accounting
records did not reflect the disposition of the remaining $18.7 million. An
accounting official informed us that bank reconciliations were not performed on
the investment accounts of the Financing Program.
The authority’s fiscal controls were not sufficient to permit the proper tracing of
program income at a level that would ensure that funds had not been used in
violation of the applicable statutes. Although the authority informed HUD that
more than $66 million in program income was available for future public housing
4
The amount was determined from a summary schedule prepared by the authority’s consultant and bank statements.
5
In December 2008, the authority informed HUD that more than $66 million in unexpended program income was
available for future public housing development activities and that the funds remained with the 2003 bond trustee.
12
development activities, bank statements reflected a significantly smaller amount
of available funds, $50.3 million. At the time of our review, the authority was not
aware of the unrecorded program income and did not provide support showing the
location of the funds. It could not ensure that program income was adequately
accounted for, safeguarded, and used for authorized and eligible purposes. The
$18.7 million in unrecorded program income is unsupported pending an
explanation and appropriate supporting documents showing the disposition and
eligibility of the funds.
Inaccurate Accounting Records
The authority’s annual contributions contract and 24 CFR Part 85 provide that
housing agencies must maintain financial records that are accurate and current and
that adequately identify the source and application of funds provided for assisted
activities.
The authority’s accounting records did not reflect current complete and accurate
financial information on Financing Program activities. For example, transactions
affecting the investment and revenue accounts had not been recorded since June 30,
2008. In addition, the accounting records did not include the transactions associated
with the repayment of the 2003 bonds that took place in August 2008. The
authority’s accounting official attributed the delay in recording financial transactions
to a lack of personnel and inadequate information from other authority officials. The
accounting records also contained several instances of incorrect ending balances as a
result of posting errors. For example, the interest income accounts contained more
than $10 million in erroneous transactions.
In addition, the authority’s accounting system did not reflect accurate information
when obligations occurred. The dates recorded in the system represented the date
the obligation was entered into the authority’s accounting system and not the date
when the contractual obligation occurred. The following table illustrates
examples of the discrepancies in the obligation dates.
Obligation date
Contract number according to the Contract date
accounting system
2005-1070 Aug. 16, 2005 June 23, 2005
2005-0334 Sept. 2, 2004 Aug. 2, 2004
2006-0371 Nov. 29, 2005 Oct. 6, 2005
2006-0119 Sept. 20, 2005 Aug. 12, 2005
2006-0362 Dec. 13, 2005 Oct. 27, 2005
The authority’s system did not permit the tracking of obligations by contract
dates. Therefore, it was not adequate to monitor compliance with HUD’s
obligation requirements.
13
Unused Program Income
HUD’s regulations at 24 CFR 85.25 state that grantees are encouraged to earn
income to defray program costs.
The authority did not have a plan for the use of its program income, allowing the
accumulation of a significant amount of cash in its investment accounts. As a
result, it did not use the funds to defray program costs or benefit low-income
housing projects and residents. Between December 2003 and September 2008,
the 2003 bonds proceeds generated more than $69.3 million in program income.
However, the authority’s general ledger only reflected expenditures of $257,244,
and the balance of its investment accounts remained consistently high during the
same period. The 2003 bonds earned on average $11.5 million in program
income per year.
Investment earnings and disbursements
The authority informed us that it did not have in place an action plan for the use
of the investment earnings generated from the 2003 bonds. As a result, the
balance of the program income continued to increase without benefiting the
public housing program. Authority management must improve its controls over
program income to ensure that the $50.3 million in unexpended funds is put to better
use in accordance with HUD requirements.6
6
The amount was determined from bank statements reflecting the accounts’ cash balance as of September 2008.
14
Inaccurate Progress Reports
HUD’s Financing Program guidelines provide that housing agencies must submit
performance and evaluation reports reflecting the use of Financing Program
proceeds. These reports are used to monitor program activities and ensure that the
obligation and expenditure of the funds comply with HUD requirements. The
authority’s performance and evaluation reports were not accurate.
The performance and evaluation reports submitted to HUD reflected inaccurate
information on the amount obligated. For example, the November 2005 report
reflected that 100 percent of the 2003 Financing Program proceeds were
obligated. However, the authority overstated the actual obligations by at least
$14.9 million. From the $14.9 million in overstated obligations, $13.3 million
was associated with unsupported budget estimates of expected expenditures
associated with future relocation activities to be undertaken by the authority’s
managing agents. These budget estimates were not consistent with the definition
of obligations as contained in 24 CFR 85.3. Accordingly, the authority did not
follow HUD requirements and should not have reported the relocation activities
as obligated funds. The remaining $1.6 million in overstated obligations was
related to duplicate transactions, obligations not associated with the 2003
Financing Program, or obligations reported in excess of the contracted amount.
The authority also provided HUD with inaccurate information on the expenditures
of its 2003 bond proceeds. The September 2008 performance and evaluation
report reflected expenditures of more than $330 million. However, the authority’s
accounting records showed that a much higher amount was expended, more than
$395 million. The performance and evaluation report for the period ending
September 30, 2008, did not agree with amounts reflected in the authority’s
general ledger.
General Performance
Account description ledger report Difference
Fees and costs $25,636,102 $22,483,369 $3,152,733
Site improvement 84,045,750 67,793,765 16,251,985
Dwelling structure 257,732,677 217,591,633 40,141,044
Nondwelling structure 14,490,778 12,020,158 2,470,620
Nondwelling equipment 43,536 0 43,536
Relocation cost 12,572,695 9,432,144 3,140,551
Development activities 1,319,928 873,378 446,550
Total $395,841,466 $330,194,447 $65,647,019
An authority official informed us that the amounts included in the September
2008 performance and evaluation report were not verified or reconciled with the
authority’s accounting records. The amounts were obtained from the authority’s
15
requisition reports.7 Therefore, HUD had no basis for reliance on the reported
information submitted by the authority.
Conclusion
The authority did not maintain a financial management system that adequately
identified the source and application of Financing Program funds. Its accounting
records were incomplete, since they did not reflect the complete and full history
of all financial transactions. The noncompliance occurred because the authority’s
management did not implement effective controls to ensure that the financial
information on its activities was complete and accurate. As a result, the authority
could not ensure that program income was adequately accounted for, safeguarded,
and used for authorized purposes and in accordance with HUD requirements. The
authority must improve its internal controls to properly safeguard assets and improve
the administration of its program income.
Recommendations
We recommend that the Director of the Office of Public Housing
2A. Require the authority to submit all supporting documentation showing the
eligibility and propriety of more than $18.7 million in unrecorded program
income or reimburse the Financing Program from nonfederal funds.
2B. Require the authority to develop and implement an action plan so that
$50.3 million in unexpended program income is put to better use. At a
minimum, the plan should include activities and target dates and ensure
that such funds are used for the benefit of the public housing program and
its residents.
2C. Take appropriate monitoring measures to ensure that the Financing
Program has in place a financial management system that complies with
HUD requirements. At a minimum, the system should ensure that fiscal
controls and accounting procedures are sufficient to permit the tracing of
funds at a level that ensures that such funds are not used in violation of the
restrictions and prohibitions of applicable statutes.
2D. Require the authority to ensure that receipts and disbursements are
properly accounted for and in compliance with HUD requirements and
that revised performance and evaluation reports are submitted to HUD.
7
The requisition reports are not the official accounting records. These are spreadsheets used by the authority to
track advance requests made to the 2003 bond trustee.
16
Finding 3: The Authority’s Recovery Act Funds Will Inappropriately
Supplant Expenditures from Other Sources
The authority inappropriately obligated $32.12 million in Recovery Act funds to supplant
expenditures from other nonfederal funds in violation of its annual contributions contract with
HUD. This deficiency occurred because the authority substituted the obligations related to
nonfederal funds with Recovery Act funds. As a result, the authority will use Recovery Act
funds to pay for expenditures that were the responsibility of nonfederal sources.
Inappropriate Obligations
The authority’s amendment to the annual contributions contract, section 7(j),
provides that housing agencies must use Recovery Act funds to supplement and not
supplant expenditures from other federal, state, or local sources or funds
independently generated by the grantee. HUD Notice PIH [Public and Indian
Housing] 2009-12(HA) authorized housing agencies to obligate Recovery Act funds
starting March 18, 2009 (obligation start date). HUD’s Recovery Act Web site
clarified that any obligation recorded against the Recovery Act funds must be for
new work not previously obligated and for activities that occur after the obligation
start date.
In April 2009, the authority submitted its annual statement for the Recovery Act
funds detailing the budget line items and the 39 projects that will benefit from the
$174 million in capital fund recovery grants. The annual statement reflected more
than $32.12 million obligated to five public housing developments as of March 31,
2009. We reviewed the obligations and related supporting documents to determine
whether the obligations met HUD requirements. The $32.12 million in obligations
was related to five rehabilitation contracts, totaling $46.18 million, awarded between
October and November 2008.
Nonfederal funds Recovery Act funds
Public housing Contract Obligation Obligated supplanting
project number date amount nonfederal funds
Narciso Varona 2009-541 Oct. 20, 2008 $9,879,114 $6,384,443
Manuel F. Rossy 2009-289 Oct. 22, 2008 10,316,000 6,493,889
Maximino Miranda 2009-595 Oct. 24, 2008 12,392,438 8,951,442
Ramirez de
Arellano 2009-574 Oct. 31, 2008 4,040,000 2,543,167
La Alhambra 2009-619 Nov. 21, 2008 9,555,000 7,749,327
Total $46,182,552 $32,122,268
The five contracts were previously obligated against other federal and local funds
and awarded before the authorized obligation start date of March 18, 2009. Of the
17
$46.18 million in contracts awarded in 2008, $32.12 million was obligated against a
line of credit with a governmental bank (local funds), and $14.06 million was
obligated against various grants of the Public Housing Capital Fund program. In
March 2009, the authority substituted the obligations related to the line of credit with
Recovery Act funds. Therefore, the authority inappropriately obligated $32.12
million in Recovery Act funds to supplant expenditures from other local sources and
for activities awarded before the authorized obligation start date. This substitution
of Recovery Act funds for nonfederal funds will result in the authority using
Recovery Act funds to pay for expenditures that were the responsibility of the
nonfederal funds. Of the $32.12 million in inappropriate obligations, the authority
disbursed more than $462,000 in June 2009. Therefore, the Recovery Act funds
disbursements were ineligible.
An authority official informed us that Recovery Act funds were obligated for
activities awarded before the obligation start date, because the authority believed that
it was appropriate, and it had obtained HUD approval for this type of transaction.
The authority did not provide support showing that HUD approved the use of
Recovery Act funds to supplant expenditures from other sources. Further, this
practice is in violation of the authority’s annual contributions contract with HUD
and inconsistent with requirements of the Recovery Act.
Authority management must improve its controls over its Recovery Act funds to
ensure that they are properly obligated and that $31.65 million in inappropriate
obligations is put to better use in accordance with HUD requirements.
Insufficient Capacity
The authority did not implement effective controls over its Financing Program
and the activities funded under the Recovery Act to ensure compliance with all
applicable regulations. As described in findings 1 and 2, the authority
mismanaged its Financing Program, and its financial management system did not
fully comply with HUD requirements. In addition, the authority obligated
Recovery Act funds for activities that occurred before the authorized obligation
start date in violation of its annual contributions contract with HUD.
The significant amount of funds under the authority’s management, the restrictive
program deadlines, and the authority’s inefficient use of its 2003 Financing
Program (see finding 1) raise concerns regarding the authority’s capacity to
administer the additional Recovery Act funds.
The authority currently administers more than $1.3 billion for rehabilitation of its
public housing projects. Between fiscal years 2005 and 2008, the authority
received more than $559.8 million in capital funds. In June 2008, it issued $386
million in bonds under the Financing Program and received an additional $235
18
million in tax credit investments. In March 2009, pursuant to the Recovery Act,
the authority received an additional $174 million in capital funds. The program
deadlines for these funds are near the deadlines for the Recovery Act funds. The
authority must complete the modernization/rehabilitation efforts and expend more
than $1.3 billion, according to various program requirements, by September 2012.
In addition, the authority must obligate more than $840 million in HUD funds,
about six times its normal level of funding, by the year 2010.
Obligation deadline year
Program 2008 2009 2010
Capital funds-2005* $143,153,018
Capital funds-2006* $137,959,152
Capital funds-2007* $140,842,826
Capital funds-2008 137,919,872
Financing Program-2008 386,785,824
Capital fund recovery grant 174,579,333
Total $143,153,018 $137,959,152 $840,127,855
* In June 2008, HUD granted the authority a one-year extension for
obligation/expenditure of the funds.
Conclusion
Because the authority did not implement adequate controls and lacked sufficient
capacity to administer additional funds allocated under the Recovery Act, it
inappropriately obligated more than $32.12 million in Recovery Act funds. The
lack of adequate oversight and capacity by the authority to ensure that HUD funds
were managed in an economical, efficient, and effective manner is a major concern
in light of the authority’s receiving additional capital funds under the Recovery
Act. Management must improve its internal controls to assure HUD that it can
administer the Recovery Act funds in an economical, efficient, and effective
manner and achieve program goals.
Recommendations
We recommend that the Director of the Office of Public Housing
3A. Require the authority to deobligate $31.65 million in Recovery Act funds
related to the five contracts awarded before the authorized obligation start
date and put the funds to better use.
3B. Require the authority to reimburse the capital fund program from nonfederal
funds $462,715 paid for ineligible Recovery Act expenditures.
19
3C. Require the authority to implement adequate procedures and controls to
ensure that Recovery Act funds are used effectively and efficiently and in
accordance with applicable requirements.
3D. Take appropriate monitoring measures to ensure that the authority complies
with all applicable requirements of the Recovery Act.
20
SCOPE AND METHODOLOGY
To accomplish our objectives, we did the following:
Reviewed applicable laws, regulations, and other HUD program requirements.
Obtained an understanding of the authority’s management controls and procedures as
they related to our objectives.
Analyzed the authority’s obligations and disbursements regarding the Financing Program.
Interviewed HUD and authority management and staff.
Reviewed the authority’s files and records, including progress and evaluation reports,
general ledgers, and bank statements.
Traced amounts included in progress reports to general ledgers and source documents.
Reviewed the authority’s latest independent public accountant report.
Selected a sample of 10 projects and reviewed the amounts the authority reported as
obligated.8 These 10 projects represented $250 million of more than $606 million of the
total reported obligations for the period ending November 30, 2005. We reviewed the
obligations and related supporting documents to determine whether obligations met
Financing Program requirements.
Performed site inspections at three public housing projects to verify the progress of the
rehabilitation efforts. We inspected Pedro Rosario Nieves, Jardines de San Fernando,
and Jardines de Montellanos public housing projects based on the authority’s progress
report that showed delays in the rehabilitation efforts.
The authority’s records reflected that between December 2003 and September 2008, the
Financing Program received more than $69.3 million in program income and that $257,244 of
the proceeds had been expended. We examined the authority’s records to verify the availability
of the unexpended program income. According to the bank statements, $50.3 million in program
income had not been spent and the authority could not account for $18.7 million. The authority’s
internal controls were not sufficient to safeguard its program income and ensure that funds had been
used for eligible purposes. Once the proper controls and action plans are developed and
implemented, the authority could put the $50.3 million in unused program income to better use and
ensure that HUD requirements are met.
8
We selected a nonstatistical sample and did not use these projects for projecting our sample results.
21
The authority reported to HUD that it had obligated $32.12 million in Recovery Act funds to five
public housing developments as of March 31, 2009. We reviewed the obligations and related
supporting documents to determine whether the obligations met HUD requirements.
We conducted our fieldwork from August 2008 through July 2009 at the authority’s offices in
San Juan, Puerto Rico. Our audit period was December 1, 2003, through July 31, 2008, but we
expanded our audit period as needed to accomplish our objectives.
We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
22
INTERNAL CONTROLS
Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following controls are achieved:
Program operations,
Relevance and reliability of information,
Compliance with applicable laws and regulations, and
Safeguarding of assets and resources.
Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.
Relevant Internal Controls
We determined that the following internal controls were relevant to our audit
objectives:
Compliance with laws and regulations - Policies and procedures that
management has implemented to reasonably ensure that resource use is
consistent with laws and regulations.
Safeguarding of assets and resources - Policies and procedures that
management has implemented to reasonably ensure that resources are
safeguarded against waste, loss, and misuse.
We assessed the relevant controls identified above.
A significant weakness exists if management controls do not provide reasonable
assurance that the process for planning, organizing, directing, and controlling
program operations will meet the organization’s objectives.
Significant Weaknesses
Based on our review, we believe that the following items are significant weaknesses:
The authority’s management did not implement adequate controls to
effectively plan and coordinate the execution of its Financing Program
activities (see finding 1).
23
The authority’s management did not implement effective controls to safeguard
assets and ensure that the financial information on its Financing Program
activities was complete and accurate (see finding 2).
The authority’s management did not implement adequate controls and lacked
sufficient capacity to administer additional funds allocated under the
Recovery Act (see finding 3).
24
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
AND FUNDS TO BE PUT TO BETTER USE
Recommendation Funds to be put
number Ineligible 1/ Unsupported 2/ to better use 3/
1A $57,464,212
2A $18,701,107
2B $50,354,867
3A 31,659,553
3B $462,715
Total $57,926,927 $18,701,107 $82,014,420
1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
that the auditor believes are not allowable by law; contract; or federal, state, or local
policies or regulations.
2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
or activity when we cannot determine eligibility at the time of the audit. Unsupported
costs require a decision by HUD program officials. This decision, in addition to
obtaining supporting documentation, might involve a legal interpretation or clarification
of departmental policies and procedures.
3/ Recommendations that funds be put to better use are estimates of amounts that could be
used more efficiently if an Office of Inspector General (OIG) recommendation is
implemented. These amounts include reductions in outlays, deobligation of funds,
withdrawal of interest, costs not incurred by implementing recommended improvements,
avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
that are specifically identified. In this instance, if the authority implements
recommendation 2B, it will ensure that the unused program income is put to better use for
the benefit of the public housing program and its residents and that HUD requirements
are met. By implementing recommendation 3A, funds inappropriately obligated by the
authority will be available for a more appropriate use consistent with the Recovery Act.
25
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
Comment 1
26
Ref to OIG Evaluation Auditee Comments
Comment 2
Comment 3
Comment 3
27
Ref to OIG Evaluation Auditee Comments
Comment 4
Comment 4
Comment 4
28
Ref to OIG Evaluation Auditee Comments
Comment 5
Comment 5
Comment 5
29
Ref to OIG Evaluation Auditee Comments
Comment 4
Comment 6
30
Ref to OIG Evaluation Auditee Comments
Comment 6
Comment 7
31
Ref to OIG Evaluation Auditee Comments
Comment 7
Comment 8
32
Ref to OIG Evaluation Auditee Comments
Comment 8
Comment 9
Comment 10
33
Ref to OIG Evaluation Auditee Comments
Comment 11
34
Ref to OIG Evaluation Auditee Comments
Comment 12
35
Ref to OIG Evaluation Auditee Comments
Comment 12
Comment 13
36
Ref to OIG Evaluation Auditee Comments
Comment 14
37
Ref to OIG Evaluation Auditee Comments
Comment 15
38
Ref to OIG Evaluation Auditee Comments
Comment 16
39
OIG Evaluation of Auditee Comments
Comment 1 The authority stated that it provided additional information that should put OIG
into a position to remove or modify the proposed findings.
The additional information provides insight as to why management was unable to
respond to changing events but did not justify the authority’s inability to fulfill
requirements under the Financing Program and the Recovery Act. The authority
represented to HUD and bond investors that in return for the funds provided, it
would provide specific products and services. Specifically, the authority
committed to spending $693 million from its 2003 bond proceeds for the
rehabilitation of more than 8,000 units in 44 public housing projects within four
years. It modernized only about 3,600 units and placed more than $407 million in
unexpended 2003 bond proceeds in escrow with the authority’s bond trustee to
redeem the bonds as they reached maturity. It did not complete the rehabilitation
efforts contained in the 2003 Financing Program proposal and used more than
$57.4 million in capital funds to pay for interest expenses on unused borrowed
capital that did not benefit the public housing developments or its residents. The
authority did not provide additional information to account for more than $18.7
million in program income or justify why its accounting system did not contain
accurate and current accounting records. Although Recovery Act funds provided
additional Public Housing Capital Fund program funds to create and preserve jobs
and to help stabilize the economies of state and local governments, the authority
plans to use $32 million of Recovery Act funds to pay the salaries of already
employed individuals financed with other funding sources. Accordingly, we did
not remove or modify the report findings, conclusions, and recommendations.
Comment 2 The authority asserted that the findings were inaccurate, unsupported, and
inconsistent with audit standards.
The findings are supported by source documents the authority provided during the
review. The authority did not provide us with any documentation showing that
the findings were inaccurate, unsupported, and inconsistent with audit standards.
Comment 3 The authority stated that OIG did not provide an explanation and documentation
to fully understand the basis for the conclusions. It also requested to meet with
OIG to discuss the 2008 financing and revise the findings.
We discussed the findings with authority officials during the audit (March 2009,
May 2009, and July 2009). We discussed the findings and the report with
authority officials at the exit conference on September 10, 2009. During the exit
conference, authority officials requested some specific documentation pertaining
to the audit findings. On September 10, 2009, we sent the authority the requested
information.
40
The audit report did not question the 2008 financing, and the authority did not
provide additional documentation that warrants a revision to the findings.
Comment 4 The authority discussed the 2008 financing transactions and asserted that the
associated costs were reasonable.
As indicated above, the audit report did not question the 2008 financing or the
reasonableness of the associated costs.
Comment 5 The authority commented that capital funds can be used to make interest
payments on debt and said the costs were reasonable and benefited public housing
residents. The authority cited the statutory provision in 42 USC §1437g(d)(1) and
regulations at 2 CFR Part 225 which permits the use of capital fund assistance to
finance public housing projects.
While capital funds can be used to pay for the financing of public housing
rehabilitation costs, such financing costs are not allocable if the expected benefit
is not received. In August 2008, more than $407 million in unexpended 2003
bond proceeds was placed in escrow to redeem the 2003 bonds. Regulations at 2
CFR Part 225, Appendix A, Part C, Number 3, state that a cost is allocable when
the goods or services received are assignable to a cost objective “in accordance
with relative benefits received.” Because such funds were not used to rehabilitate
public housing , the relative benefit of paying interest on such unused funds was
not received. We contend that the interest paid for the unused funds is
unallowable.
Comment 6 The authority asserted that it complied with all legal requirements for obligation
and expenditure of Financing Program funds.
We agree that the authority did obligate the 2003 bond proceeds within two years
as required by HUD. However, the authority did not expend more than $407
million in 2003 bond proceeds within the prescribed time.
Section 9(j) of the Act required the authority to obligate its Capital Funds within
24 months of the date on which the funds became available. Section 9(j)(5)
required the authority to expend its funds within four years of the date on which
the funds became available. The statute and HUD’s regulations allow for an
extension of the expenditure deadline only when the obligation deadline has been
extended. When the authority submitted its request for extension of the obligation
deadline in October 2007, the authority had previously submitted to HUD the
November 2005 Annual Statement/Performance and Evaluation report showing
that it had already obligated the funds. We therefore maintain our position that
the extension request was not justified.
Comment 7 The authority stated that there was no requirement to renovate 8,256 units and that
guidelines in 24 CFR Part 968.125 are not applicable to the Capital Fund
program.
41
The authority’s letter to HUD dated November 12, 2003, and HUD’s approval
letter of December 3, 2003, represented that the 2003 bonds would be used for the
rehabilitation of more than 8,000 units in about 40 public housing projects. Our
report shows that the authority fell far short of meeting its goal. The authority's
assertion that 24 CFR Part 968 is not applicable to the Capital Fund program is
incorrect. Guidance in HUD Public and Indian Housing notices for the
processing of Capital Fund grants have repeatedly stated that housing authorities
agree to comply with Part 968 regulations when signing annual contribution
contract (ACC) amendments to receive capital funds.
Comment 8 The authority stated that it complied with applicable requirements in carrying out
modernization projects and that examples in the report are the result of prudent
practices.
The examples provided in the report illustrate that the authority did not undertake
modernization activities in a timely, efficient, and economical manner. The
authority records showed that of the 44 proposed projects, only 16 had been
completed, 18 were in process, and 10 had not been funded. In addition, some
projects were between 314 and 622 days behind schedule. We contend that poor
planning and poor coordination contributed to the authority’s delays in
completing its rehabilitation activities.
Comment 9 The authority stated that there is no requirement that Financing program and
project end dates should coincide and that the projects may use other sources of
funds. The authority cited project Aristides Chavier as an example of projects
using other sources of funds.
Our analysis was based on the contract dates and amounts that were originally
obligated for these contracts to the Financing Program including project Aristides
Chavier. The authority did not take into consideration the Financing Program
expenditure requirement when it executed rehabilitation contracts for 12 housing
projects. The contracts had end dates that were between 205 and 921 days after
the expenditure deadline. Since the four-year expenditure deadline expired in
December 2007, it was improper for the contract end dates to extend beyond that
date for contracts to be charged to the 2003 Financing Program.
Comment 10 The authority stated that we ignored records produced by the bond trustee
showing that all program income was clearly accounted for and being used for
program purposes.
In December 2008, the authority reported to HUD that more than $66 million in
unexpended program income was available for future public housing development
activities and that the funds remained with the trustee. We used bank statements
from the bond trustee to determine the total amount of interest income through
September 30, 2008. At the time of our review, the trustee’s and the authority’s
42
records did not reflect the disposition of more than $18.7 million in interest
income. We clarified the report to indicate that the authority’s records did not
reflect the disposition of $18.7 million in interest income. Guidelines in 24 CFR
85.20(b) require grantees to maintain accounting records that are accurate,
current, and adequately identify the source and application of funds. In addition,
Section 15 of the authority’s annual contributions contract with HUD requires that
the authority must maintain complete and accurate records to permit an effective
audit. The authority did not provide additional documentation to show the
disposition and eligibility of the $18.7 million in interest income.
Comment 11 The authority asserted that it spent program income in accordance with the
financing plan approved by HUD.
The HUD approval letter for the 2003 Financing Program states that interest
income will be available for modernization of the authority’s public housing
properties. However, we did not find a plan for the use of program income as part
of our review of the 2003 Financing Program documents. The five-year plan
amendment in relation to the 2003 Financing Program indicated: “Interest income
generated from the investment of the Bond Proceeds will be used to offset
financing costs and any unused interest income will be used for the modernization
of properties included in the five (5) year plan.” The authority, however, did not
use the interest income to offset financing costs and allowed the accumulation of
interest income without benefiting the public housing program. We contend that
the authority needs to develop a specific plan to ensure that such funds are used
for the benefit of the public housing program and its residents.
Comment 12 The authority asserted that the structure of contracts questioned is similar to
architectural and engineering type contracts in which specific tasks may be issued
against the main contract during the contract period.
The similarity appears to be because notices to proceed had not been issued
against such contracts. We disagree with this interpretation. These were not
architectural and engineering type contracts. These were construction contracts
awarded in 2008 for which other sources of funds (capital funds and local line of
credit) were identified in the contracts registered with the state controller’s office.
Our interpretation is consistent with the definition of obligations in 24 CFR Part
85.3, because the contracts were awarded and would require payment in a current
or future period. The tasks to be performed under these contracts were
predetermined before the contracts were awarded. This condition is different
from architectural and engineering type contracts in which new tasks can be
added or changed as the contract period progresses. At the time of our review,
two contractors had submitted invoices that the authority paid with Recovery Act
funds for services performed prior to the issuance of the notice to proceed and
before the authorized obligation start date of March 18, 2009. Therefore, the
43
authority did incur obligations prior to the obligation start date and before the
notices to proceed were issued.
Comment 13 The authority claimed that it determined that the line of credit was no longer an
available option to cover the contract costs and that without the ARRA funds, the
projects would have been unable to proceed.
The authority did not provide evidence to support the statement during the course
of the audit or as part of the comments. The authority did not provide us with
additional documentation showing that the Government Development Bank of
Puerto Rico cancelled the line of credit and that the contracts were cancelled prior
to the obligation start date of March 18, 2009.
Comment 14 The authority contended that HUD approved the inclusion of the questioned
contracts for Recovery Act funding.
HUD’s letter dated June 2, 2009, advised the authority that Recovery Act funds
should be used to supplement expenditures, not to supplant expenditures from
other federal, state, or local resources. We contend that the authority did not meet
the intent of the Recovery Act requirements by supplanting activities that were to
be funded from other sources.
Comment 15 The authority stated that it has adequate controls to monitor the use of Recovery
Act funds and requested that we remove the finding because our finding lacks
legal support.
The Recovery Act requires that recovery funds shall supplement and not supplant
expenditures from other sources. By supplanting previously obligated funds,
without support for the assertion that the line of credit was no longer available,
the authority violated Recovery Act requirements. In addition, funds that were
supposed to provide new and added stimulus to the economy were instead used to
pay for old work that was already programmed.
Comment 16 The authority concluded that OIG misunderstood and inaccurately portrayed the
actions of the authority and requested that we redraft the report. It also requested
to meet with OIG to discuss and review additional documentation associated with
the 2008 financing.
We discussed the findings with authority officials during the audit and at the exit
conference and requested the authority to provide any additional documentation to
justify their actions. The authority provided comments with attachments on
September 15, 2009.
We reviewed the additional information provided to us. We determined that the
explanations and additional documentation did not justify the authority’s inability
to fulfill requirements under the Financing Program and the Recovery Act. The
44
authority did not provide documentation showing that our findings were
inaccurate and unsupported. We concluded from the information provided that
the authority did not comply with contract requirements as well as HUD rules and
the applicable statutes controlling the program. Therefore, we did not modify or
remove the report findings, conclusions, and recommendations, and we
determined another meeting was not necessary.
As mentioned above, the report did not question the transactions associated with
the authority’s 2008 financing.
45
Appendix C
SCHEDULE OF REHABILITATED UNITS
Housing project name Units proposed for rehabilitation Units rehabilitated* Rehabilitation work status
Villa Monserrate 104 0 **
Santiago Iglesia 132 0 **
Felipe Sanches Osorio 186 0 **
EI Manantial 200 0 **
Jardines de Oriente 200 0 **
Los Peña 200 0 **
Las Amapolas 204 0 **
Las Dalias 240 0 **
Nurciso Verona 260 0 **
Puerta de Tierra 484 0 **
El Coral 100 0 In process
Villas del Río 100 0 In process
Jardines de Montellanos 250 0 In process
Jardines de San Fernando 70 13 In process
Lagos de Blasina 240 32 In process
La Esmeralda 84 36 In process
Pedro Rosario Nieves 210 42 In process
Práxedes Santiago 124 44 In process
Catañito Gardens 124 44 In process
Los Mirtos 304 46 In process
Vista Alegre 74 49 In process
Turabo Heights 254 102 In process
Trina Padilla de Sanz 268 137 In process
Jardines de Cupey 308 154 In process
Ext. Sábalos Gardens 300 183 In process
Arístides Chavier 480 204 In process
San Fernando 334 206 In process
Rafael López Nussa 404 296 In process
Ext. Santa Catalina 24 24 Completed
Jardines de Judely 32 32 Completed
Yuquiyú II 70 70 Completed
Alturas de Country Club 72 72 Completed
Las Violetas 88 88 Completed
Marini Farm 100 100 Completed
La Lorenzana 100 100 Completed
Santiago Veve Calzada 100 100 Completed
Roberto Clemente 126 126 Completed
Ponce de León 132 132 Completed
Colinas de Magnolias 148 148 Completed
Andrés Méndez Liceaga 150 150 Completed
Jardines de Cataño 180 180 Completed
Jardines de Campo Rico 196 196 Completed
San Antonio Carioca 200 200 Completed
La Ceiba 300 300 Completed
Total 8,256 3,606
* Units rehabilitated as of March 2009 according to the authority’s progress report.
** Although the authority proposed using 2003 Financing Program proceeds for the rehabilitation efforts, no funds were
disbursed for these housing projects.
46
The Puerto Rico Public Housing Administration, Mismanaged Its Capital Fund Financing Program and Inappropriately Obligated $32 Million in Recovery Act Funds
Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-09-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)