oversight

Very Small and Small Housing Agencies Reviewed Had Common Violations of Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2015-09-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                   U.S. DEPARTMENT OF
                                   HOUSING AND URBAN DEVELOPMENT
                                            OFFICE OF INSPECTOR GENERAL




                                                        September 16, 2015
                                                                                                  MEMORANDUM NO:
                                                                                                       2015-FW-0802

Memorandum
TO:             Milan Ozdinec
                Deputy Assistant Secretary, Office of Public Housing and Voucher Programs, PE

                Unabyrd Wadhams
                Deputy Assistant Secretary, Office of Field Operations, PQ


FROM:           Gerald Kirkland
                Regional Inspector General for Audit, 6AGA

SUBJECT:        Very Small and Small Housing Agencies Reviewed Had Common Violations of
                Requirements


                                               INTRODUCTION

In accordance with our regional audit plan, we performed a number of reviews of very small and
small housing agencies located in the U.S. Department of Housing and Urban Development’s
(HUD) Region 6 jurisdiction. 1 We worked with HUD’s Office of Public and Indian Housing
(PIH) and Departmental Enforcement Center and the Office of the Inspector General’s (OIG)
Office of Investigation to identify housing agencies with areas of concern. 2 In addition, we
reviewed the results of other OIG audits, reviews, and investigations of very small and small
housing agencies throughout the United States. The objective of this review was to summarize
the results of the prior audits, reviews, and investigations of very small and small housing
agencies to identify common areas of concern or systemic deficiencies.

HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation in this memorandum without a
management decision, please respond and provide status reports in accordance with the HUD
Handbook. Please furnish us copies of any correspondence or directives issued because of the
audit.

1
    Texas, Oklahoma, New Mexico, Arkansas, and Louisiana.
2
    We initiated 13 of the reviews included in this memorandum based on concerns identified by HUD.



                                                   Office of Audit (Region 6)
                                    819 Taylor Street, Suite 13A09, Fort Worth, TX 76102
                                          Phone (817) 978-9309, Fax (817) 978-9316
                              Visit the Office of Inspector General Web site at www.hudoig.gov.
                                   METHODOLOGY AND SCOPE

The scope of our work generally included audit reports and memorandums, and investigative
results on public housing program operations of very small and small housing agencies between
January 1, 2012, and December 31, 2014. We expanded our scope to April 10, 2015, to include
three additional reviews performed in Region 6. We conducted the review at our Fort Worth, TX
office from November 2014 through July 2015. To accomplish our objective, we

    •   Reviewed and analyzed 15 OIG audit reports and 11 memorandums issued during the
        review period and compiled the results, 3
    •   Reviewed and analyzed HUD’s PIH Information Center data to obtain the number of
        housing authorities by size and funding,
    •   Interviewed HUD staff,
    •   Reviewed and analyzed PIH regulations and guidance,
    •   Reviewed, compared, and analyzed proposed legislation relating to small and very small
        housing agencies,
    •   Obtained summaries of 15 nationwide investigative results for very small and small
        housing agencies, and
    •   Analyzed HUD’s audit tracking systems to determine the status of recommendations
        included in the 15 audit reports and 11 memorandums.

                                             BACKGROUND

The United States Housing Act of 1937 established the public housing program to provide decent
and safe rental housing for eligible low-income families, the elderly, and persons with
disabilities. HUD provides operating subsidies to public housing agencies for the operation and
management of its public housing programs. In addition, HUD provides capital funds for
development, financing, modernization, and management improvements for its public housing
units. Public housing agencies are required to administer their programs in accordance with
Federal and State regulations and their annual contributions contract with HUD. The annual
contributions contract details the housing agency’s responsibilities and requirements for
administering its public housing units. The housing agency’s board of commissioners is
expected to provide leadership, support, and oversight of the executive director, and establish
and approve policies that comply with Federal program regulations as well as State and local
laws. The executive director is responsible for ensuring that the agency’s day-to-day operations
comply with HUD requirements.

There are approximately 1.2 million households living in public housing units managed by more
than 3,000 public housing agencies. HUD classifies housing agencies by the number of public
housing units they manage. Table 1 shows the number of housing agencies by classification and
other related information. 4

3
    Of the 26 housing agencies reviewed, 19 were classified as small and 7 were classified as very small.
4
    Based on HUD’s Public and Indian Housing Information Center fiscal year 2014 data as of July 9, 2015
    (excludes American Recovery and Reinvestment Act funding).




                                                       2
    Table 1: Fiscal year 2014 low-rent program authorized funding
                               Number of                                               Capital funds and
        Classification      housing agencies    Number of units                       operating subsidies
     Very small                           758              1 – 49                         $      72,852,239
     Small                              1,521            50 – 249                               660,129,116
     Medium low                           430           250 – 499                               626,105,429
     Medium high                          220         500 – 1,249                               779,915,998
     Large                                123       1,250 – 9,999                            1,958,302,989
     Extra large                            6            10,000+                             2,078,325,106
     Undetermined 5                        34                                                    24,200,849
             Total                      3,058                                               $6,199,831,726

Although about 75 percent of the housing agencies were classified as very small and small, they
only received about 12 percent of the HUD funding. 6 Conversely, HUD paid about 88 percent
of the funding to about 25 percent of the housing agencies nationwide. This imbalance created
oversight burdens and costs for both the Federal Government and housing agencies that were
disproportionate to the number of families the housing agencies served.

In 2011, HUD initiated the Public Housing Authority Recovery and Sustainability (PHARS)
program to improve housing agencies’ program administration. The PHARS program is a place-
based approach for recovering troubled and substandard housing agencies. HUD tailored
PHARS to the needs of the housing agencies and focused on the systemic financial management
and governance issues most significant to housing agencies’ performance. During the PHARS
process, HUD realized that housing agencies’ executives and boards of commissioners needed
training. Therefore, HUD developed an online training for housing agency officials. 7 The
training is a no-cost, online, self-paced learning curriculum.

Making the issues facing HUD and the very small and small housing agencies worse is that State
law governs the formation and governance of the agencies, resulting in differences in laws and
requirements. Therefore, a universal solution may not achieve the intended results for all
housing agencies.




5
      Undetermined are housing agencies that had zero low-rent units in HUD’s PIH Information Center system; thus,
      we could not determine their size designation. However, they had a dollar amount greater than zero for either
      the Public Housing Capital Fund or Operating Fund.
6
      There are 2,279 (758 + 1,521) very small and small housing agencies. They received
      $732,981,355 (72,852,239 + $660,129,116), or about 12 percent, of the almost $6.2 billion in funding.
7
      The training was rolled-out in July 2015.




                                                         3
Staffing was also an issue making it difficult for these housing agencies to administer HUD
programs. In many instances, their executive directors were responsible for many key aspects of
the agency’s operations, including financial, procurement, physical condition, and administration
of tenant rents, because they had limited staff. This lack of segregation of duties also could
significantly increase the risk of fraud, waste, and abuse and would require the executive
directors to stay up to date on regulatory and program changes to ensure that their agencies
complied.

                                         RESULTS OF REVIEW

Very Small and Small Housing Agencies Reviewed Had Common Violations of
Requirements
Of the 26 housing agencies reviewed, 24 had common violations of HUD and other
requirements. Specifically, the housing agencies (1) did not have adequate financial controls (18
housing agencies), (2) did not follow procurement regulations or maintain documentation to
support their procurement functions (15 housing agencies), and (3) did not properly administer
tenant rents (7 housing agencies). In addition, their executive directors and boards of
commissioners violated requirements (11 housing agencies) (see appendix C). These conditions
occurred because housing agencies’ management and boards either chose to ignore requirements
or lacked sufficient knowledge to administer their HUD programs properly. HUD stated that it
did not have adequate resources to properly monitor or maintain sufficient contact with the
housing agencies to provide them with necessary guidance and feedback. As a result, the 26
reports and memorandums reviewed identified questioned costs and funds to be put to better use
of more than $18 million. 8 Further, results obtained from 10 Office of Investigation cases
nationwide showed criminal activities by executive directors and others. Examples of offenses
included theft including unapproved pay raises, misuse of credit cards, and payment for
unauthorized overtime; payments to fictitious landlords; and payments to individuals and
companies for work that was not done or for false invoices. HUD has implemented online
training and changed program requirements to improve management knowledge and housing
agency capacity.

Housing Agencies Did Not Have Adequate Financial Controls
Of the 26 housing agencies reviewed, 18 lacked adequate financial controls. Fourteen of the
housing agencies did not have adequate financial controls to ensure that they maintained
adequate books and records. Four of the 14 also did not have adequate controls to prevent
financial conflicts of interest. 9 Due to the lack of adequate financial controls, the housing
agencies incurred questioned costs of more than $14 million. Since these housing agencies had
limited resources, undue strain was placed on the agencies and their already limited budgets and
resources. In addition, Office of Investigation proceedings against housing agency officials that
misused funds resulted in several convictions.

8
    The $18 million includes more than $14 million due to lack of adequate financial controls and more than $4
    million due to noncompliance with procurement requirements and guidance. For two housing agencies, the
    books and records were in such disarray that the housing agencies could not determine the source of funds.
    Thus, the $18 million may have included non-public-housing funds.
9
    The remaining four housing agencies had other financial control weaknesses.




                                                        4
Housing Agencies Lacked Adequate Books and Records
Fourteen of the 26 housing agencies did not implement controls necessary to ensure that they
maintained adequate books and records to support their operations or expenditures. In some
instances, housing agencies did not have an organized system of records. In addition, they could
not support the business purpose of their expenses. The following examples show how the
housing agencies did not maintain adequate books and records.

   •   The Rotan Housing Authority, Rotan, TX, Did Not Administer Its Public Housing and
       Recovery Act Programs in Accordance With Regulations and Other Requirements, Audit
       Memorandum 2015-FW-1802 – The Authority’s executive director did not maintain
       documentation to support its financial operations. The Authority maintained its records
       in a haphazard manner that did not facilitate the preparation of statements and reports or
       permit a timely and effective audit. Further, the Authority did not maintain a complete or
       accurate general ledger, failed to properly withhold and deposit payroll taxes, and failed
       to fund its employee retirement accounts. Although the Authority’s board knew of some
       of these issues, it did not take proper, timely, or sufficient action to correct them. As a
       result, the Authority lacked auditable financial information, incurred an unpaid payroll
       tax liability of more than $116,000, and created a retirement liability of $25,797.

   •   The Jefferson Parish Housing Authority, Marrero, LA, Violated Federal Requirements,
       Audit Report 2012-AO-1002 – The Authority did not always ensure that its expenditures
       were eligible and supported. Specifically, it could not support disbursements from its
       operating fund made for security services, a grant coordinator, and credit card purchases.
       In addition, the Authority paid for ineligible credit card purchases from its operating
       fund. These conditions occurred because the Authority did not have an adequate
       accounting policy or internal controls to ensure that its disbursements were adequately
       supported and used for eligible activities. Also, the Authority’s board and executive
       director did not maintain adequate internal controls to ensure that Authority funds were
       spent in accordance with HUD and other requirements. As a result, the Authority
       incurred $276,966 in unsupported and $4,090 in ineligible costs and could not provide
       reasonable assurance that HUD funds were used effectively and efficiently or to fully
       benefit program participants.

   •   The Malakoff Housing Authority, Malakoff, TX, Did Not Have Sufficient Controls Over
       Its Public Housing Programs, Including Its Recovery Act Funds, Audit Memorandum
       2013-FW-1805 –The Authority lacked financial controls to ensure that it made
       transactions in compliance with Federal regulations and guidance. Testing found
       significant deficiencies in the Authority’s controls over its bank accounts, fixed assets
       and staff compensation. This occurred because the executive director ignored Federal
       regulations and guidance. Due to the egregiousness of these issues, the Authority could
       not show that it spent its funds on only eligible, supported, and necessary items or that the
       funds it expended furthered its mission. Instead, the Authority spent $76,357 on
       unsupported costs.




                                                5
Financial Conflicts of Interest Occurred at Housing Agencies
Contrary to requirements, 10 agencies’ management and boards did not implement controls
necessary to ensure that they avoided financial conflicts of interest. In clear violation of their
annual contributions contracts with HUD, 11 4 of the 26 housing agencies contracted with or had
other business dealings with entities or individuals with which there was a conflict of interest.
Housing agencies’ annual contributions contracts specifically prohibited housing agencies from
entering into any contract, subcontract, or arrangement in connection with a project under
contract with an individual or company with which they had a conflict of interest. In some
instances, the annual contributions contract had not been signed by the current executive
director. Therefore, there was no legal document to reflect the current executive director’s
agreement to administer the housing agency’s program in accordance with regulations and the
contract. As a result, entities or individuals received inappropriate financial benefits. The
following shows how the four housing agencies violated their annual contributions contracts’
conflict-of-interest requirements.

     •   The Malakoff Housing Authority, Malakoff, TX, Did Not Have Sufficient Controls Over
         Its Public Housing Programs, Including Its Recovery Act Funds, Audit Memorandum
         2013-FW-1805 – The Authority’s executive director violated the Authority’s annual
         contributions contract by contracting with or employing various family members and
         related parties. This violation resulted in $353,015 in ineligible expenses paid from HUD
         funds. Further, the Authority paid $117,450 of the $353,015 to a related party for a
         window replacement contract. In addition, the Authority failed to follow procurement
         requirements in soliciting the contract and failed to maintain documentation supporting
         payments to the contractor, such as invoices.

     •   The Housing Authority of the City of Sparta, GA, Did Not Maintain Adequate Controls
         Over Its Federal Funds, Audit Report 2012-AT-1006 – The Authority paid $54,453 to
         entities or individuals that had conflict-of-interest relationships with the Authority. The
         payments included $11,989 paid to a former board chairman and additional amounts paid
         to family members.

     •   The Housing Authority of the City of Lockney, Lockney, TX, Did Not Operate Its
         Public Housing Programs in Accordance With Requirements, Audit Memorandum
         2015-FW-1805 – The Authority’s board violated conflict-of-interest requirements by
         hiring the board chairperson’s unqualified daughter as the executive director. The
         Authority lacked a conflict-of-interest policy; however, the board chairperson knew that
         hiring her daughter violated HUD’s requirements. Other board members and a former
         executive director told the board chairperson that she should not hire a family member,
         but she ignored them. Although the other board members knew of the conflict of interest,
         they did not take action to stop the hiring and did not notify HUD. As a result, the
         Authority hired an individual who significantly mismanaged its operations. Once hired,
         she quickly exhausted the Authority’s low-rent public housing funds and cash reserves.


10
     Section 19(A)(1) and section 19(B)(1) of the annual contributions contract.
11
     Ibid.




                                                          6
   •   The Jefferson Parish Housing Authority, Marrero, LA, Violated Federal Requirements,
       Audit Report 2012-AO-1002 –The Authority paid a company owned by a member of the
       Louisiana House of Representatives, thereby creating a conflict-of-interest. The
       Authority’s annual contributions contract prohibited it from entering into a contract with
       a State or local legislator. The executive director knew the State legislator owned the
       company. Over the course of about 8 months, the Authority paid $91,218 to the
       company.

Very Small and Small Housing Agency Officials Were Convicted of or Pled Guilty to Crimes
The Office of Investigation conducted many investigations of housing agency officials who
misused funds, which resulted in several convictions (see appendix D). Following are examples
of this misuse of HUD funds.

   •   Church Point Housing Authority, Church Point, LA
       The executive director altered board meeting minutes to reflect a $7,500 board-approved
       raise for herself. She also wrote numerous checks to individuals and companies,
       sometimes without the board’s knowledge, for work that was not done and submitted
       false invoices to verify these expenses. In addition, she forged signatures on the back of
       checks, cashed them, and converted the money to her personal use. At times, another
       individual assisted her in the fraud. The executive director was convicted of theft of
       government funds, sentenced to 5 years’ probation (11 months electrically monitored),
       and ordered to pay a $100 special assessment and $195,779 in restitution to HUD. The
       other individual was convicted of theft of government funds, sentenced to 5 years’
       probation (8 months electronically monitored), and ordered to pay a $100 special
       assessment and $10,830 in restitution to HUD.

   •   Coeur d’Alene Tribal Housing Authority, Plummer, ID
       A former administrative assistant and her boyfriend purchased money orders totaling
       $4,175 with the Authority’s credit card, cashed the money orders, and used the funds for
       personal use. The administrative assistant was sentenced to a 7-month term of
       imprisonment, followed by a 3-year term of supervised release, and was ordered to pay
       restitution of $4,175 jointly and severally with her boyfriend. Her boyfriend was
       sentenced to time served and 3 years supervised release.

   •   Star City Housing Authority, Star City, AR
       The former executive director was sentenced to 12 months and 1 day imprisonment and
       ordered to pay restitution of $106,187. She previously pled guilty to one count of theft
       from a program receiving Federal funds. From February 18, 2010, to May 30, 2012, she
       embezzled funds from the Authority by misusing its credit card and writing checks to
       related parties for her personal benefit. In addition, the executive director’s ex-husband
       was sentenced to 6 months imprisonment and ordered to pay restitution of $82,225. He
       was previously found guilty on one count of aiding and abetting theft concerning a
       program receiving Federal funds. Of the $82,225 in restitution, $21,307 was his primary
       responsibility and $60,918 was considered as joint restitution with his ex-wife. He will
       remain on supervised release for 2 years after serving his prison sentence. From
       December 2010 to May 2012, the ex-husband assisted the former executive director in



                                                7
         embezzling funds from the Authority by cashing checks for work not performed and
         kicking funds back to her.

Housing Agencies Did Not Comply With Procurement Regulations and Guidance
Of the 26 housing agencies reviewed, 15 had reportable procurement deficiencies. Specifically,
the agencies failed to maintain contract or procurement documentation (9 housing agencies) or
did not conduct independent cost estimates (11 housing agencies) and did not ensure adequate
competition (5 housing agencies). 12 These conditions occurred because the executive directors,
boards of commissioners, or both either did not understand or ignored requirements. In addition,
the housing agencies either did not have policies and procedures or ignored them. As a result,
the housing agencies incurred questioned costs of more than $3.9 million.

Housing Agencies Did Not Maintain Contract or Procurement Documentation or Did Not
Conduct Independent Cost Estimates
Contrary to requirements, housing agencies did not maintain documentation, including contracts
and procurement file documentation, such as cost analyses and independent cost estimates.
Further, in many instances, agencies had no organized method of monitoring their procurements
or purchases. While most of the procurements fell below the small purchase threshold of
$100,000, regulations 13 and their annual contributions contracts required them to maintain
documentation supporting the procurement and obtain price or rate quotations from an adequate
number of sources to ensure that they paid reasonable amounts.

Housing Agencies Did Not Ensure Adequate Competition
In violation of regulatory requirements, 14 housing agencies did not conduct their procurements in
a manner that provided full and open competition. Competition in contracting is essential to
ensure that agencies spend limited HUD funding in a cost-effective manner.

Below are examples of audit memorandums and reports that identified agencies’ failure to follow
procurement requirements.

     •   The Malakoff Housing Authority, Malakoff, TX, Did Not Have Sufficient Controls Over
         Its Public Housing Programs, Including Its Recovery Act Funds, Audit Memorandum
         2013-FW-1805 – The Authority had no organized method of monitoring its procurements
         or purchases. It lacked a contract register, contract files, contracts, or documentation
         reflecting the significant history of its procurements. Further, it did not maintain invoices
         to support its purchases or payments. In addition, for a $117,450 procurement of
         replacement windows, the Authority not only awarded the project to a relative of an
         Authority employee, it also did not maintain documentation, such as a contract or
         invoices.




12
     Some housing agencies had a number of deficiencies
13
     24 CFR 85.36(b)(9)
14
     24 CFR 85.36(c)




                                                          8
   •   The Kenner Housing Authority, Kenner, LA, Did Not Administer Its Public Housing and
       Recovery Act Programs in Accordance With Regulations and Guidance, Audit
       Memorandum 2014-FW-1805 – The Authority did not always (1) maintain procurement
       documentation, such as the rationale for the method of procurement, selection of contract
       type, and contractor selection or rejection; (2) perform independent cost estimates and
       cost analyses; (3) ensure that its contract costs were reasonable and necessary; or (4)
       ensure that all payments made to its contractors were eligible and supported.
       Specifically, a review of procurement files for eight contractors, with disbursements
       totaling $930,364, determined that the Authority did not maintain adequate procurement
       documentation for six. In addition, a review of 31 payments to 4 contractors determined
       that for 10 payments to 3 contractors, the Authority did not always ensure that costs were
       eligible and supported. As a result, the Authority incurred $887,679 in questioned costs.

   •   The Colfax Housing Authority, Colfax, LA, Did Not Properly Administer Its Programs,
       Including Its 2009 American Recovery and Reinvestment Act Grant, Audit Memorandum
       2014-FW-1801 – A review of 14 procurement files showed that the Authority did not
       have documentation, such as contracts, procurement file documentation, cost analyses,
       and independent cost estimates, to support disbursements to 13 contractors. For the
       disbursements to these 13 contractors, the Authority did not maintain documentation in
       its procurement files to support $671,211.

Housing Agencies Did Not Properly Administer Tenant Rents
For 5 of the 26 housing agencies reviewed, we identified deficiencies with the administration of
tenant rents. The deficiencies included miscalculations, inadequate documentation, and poor rent
collection processes. Generally, this occurred because the housing agencies did not have
adequate procedures. As a result, they lost revenue; failed to take action on delinquent tenants,
which allowed them to accrue large outstanding balances; and could not show that they properly
charged, collected, or deposited all rents. Further, they could not reconcile rental collections or
show that rental collections or outstanding balances were accurate or supported. In addition,
since the necessary controls to prevent improper activity did not exist, theft of rent receipts could
have gone undetected.

Housing Agencies Did Not Accurately or Consistently Calculate, Document, or Collect Tenant
Rents
Housing agencies improperly calculated tenant rent, failed to maintain documentation on their
rent function, and failed to collect and improperly wrote off rent. Tenant rent is a source of
income for housing agencies. Therefore, considering the loss of Federal funding and lack of
resources faced by these entities, it is essential that they properly administer their tenant rents.
Following are examples of the deficiencies:

   •   The Rotan Housing Authority, Rotan, TX, Did Not Administer Its Public Housing and
       Recovery Act Programs in Accordance With Regulations and Other Requirements, Audit
       Memorandum 2015-FW-1802 – The Authority failed to effectively manage or administer
       its tenant rents. It did not (1) take action to properly collect rent from tenants, (2)
       maintain accurate or complete rent registers, and (3) maintain accurate rent receipt books.
       It also improperly wrote off an employee’s outstanding rent balance. This condition



                                                  9
       occurred because the executive director and staff either ignored existing policy or did not
       follow basic rental and accounting practices. As a result, the Authority lost revenue;
       failed to take action on delinquent tenants, which allowed them to accrue large
       outstanding balances; and could not show that it properly charged, collected, or deposited
       all rents. Further, it could not reconcile its rental collections or show that its rental
       collections or outstanding balances were accurate or supported.

   •   The Malakoff Housing Authority, Malakoff, TX, Did Not Have Sufficient Controls Over
       Its Public Housing Programs, Including Its Recovery Act Funds, Audit Memorandum
       2013-FW-1805 – The Authority’s executive director did not accurately or consistently
       calculate, document, or collect tenant rents. Review of a sample of six tenants in the
       Authority’s rent records reflected numerous irregularities, inaccuracies, and
       miscalculations. Additional testing showed that the rent registers and receipts contained
       similar issues. The Authority’s rent documentation reflected inconsistent application of
       late fees, incorrect rent due balances carried forward, incomplete and inaccurate receipts,
       and large tenant account write-offs. This condition occurred because the executive
       director failed to properly perform rent collection activities. As a result, the Authority
       lost revenue; failed to take action on delinquent tenants; and could not show that it
       properly charged, collected, or deposited all rent due.

   •   The Management of the Housing Authority of the City of Beeville, Beeville, TX, Did Not
       Exercise Adequate Oversight and Allowed Ineligible and Unsupported Costs, Audit
       Memorandum 2014-FW-1804 – The Authority did not properly oversee its rental income
       as it did not reconcile its rent receipts, rent registers, and bank deposits monthly. It
       lacked basic segregation of duties as the staff responsible for maintaining the rent register
       and bank deposit sometimes collected the rent. Further, it accepted cash without
       adequate controls, did not deposit a few receipts, and provided incomplete or illegible
       rent receipts to the tenants. The Authority’s staff also did not ensure that the amount
       recorded on the rent receipts provided to the tenant matched amounts in its rent register
       and in a few cases, did not record the tenant’s rent payment in the rent register. Further,
       staff improperly charged tenants late fees. In addition, the Authority’s staff did not know
       how to account for payments made on old outstanding accounts. The executive director
       had known for years that the staff had not reconciled rental income; however, she did not
       establish or inform the board of the need for a policy. As a result, the Authority’s tenant
       accounts receivable balances were inaccurate, and it overcharged a few tenants. Further,
       since the necessary controls to prevent improper activity did not exist, theft of rent
       receipts could have gone undetected.

Boards of Commissioners and Executive Directors Violated Requirements
Of the 26 housing agencies reviewed, 11 identified deficiencies in which their boards of
commissioners, executive directors, or both violated requirements. Specifically, (1) boards of
commissioners did not provide oversight or ensure that adequate controls were in place (nine
housing agencies); (2) executive directors that were the board secretaries failed to maintain
minutes reflecting the board’s actions (six housing agencies); (3) the housing agencies paid
board members in violation of regulations (two housing agencies); and (4) the chairman of the
board for one agency was the mother-in-law of the executive director. These 11 housing




                                                10
agencies received more than $11 million in HUD operating subsidy and capital funding during
the review periods. However, without adequate management and oversight, these funds were at
increased risk of mismanagement, waste, and abuse.

Boards of Commissioners Did Not Provide Adequate Oversight
Despite being the governing bodies of the housing agencies, in many instances, the boards
provided no oversight and did not ensure that the housing agencies had adequate controls.
Housing agencies exercise public and essential government functions with Federal funding that
is subject to Federal regulations. Therefore, boards must understand and carry out their
responsibilities to ensure that agencies use their programs and funds as required. Often very
small and small housing agencies do not have enough staff to provide adequate segregation of
duties. Thus, it is imperative that their boards provide proper oversight and ensure they
implement adequate controls.

The following examples reflect instances in which boards did not provide adequate oversight or
ensure that the housing agencies had adequate controls.

     •   The Colfax Housing Authority, Colfax, LA, Did Not Properly Administer Its Programs,
         Including Its 2009 American Recovery and Reinvestment Act Grant, Audit Memorandum
         2014-FW-1801 – The Authority did not have proper oversight and adequate internal
         controls. Specifically, while the Authority had a disbursements policy, the policy did not
         establish a level of review or approval before disbursements were made to vendors and
         contractors, and instead of following the disbursements policy, Authority staff performed
         the processes based upon a general knowledge of office procedures. Further, the
         Authority did not properly maintain its written policies and procedures as it could not
         locate its February 2005 to June 2013 admissions and occupancy policy, which governed
         its low-rent program. As a result, it (1) incurred questioned costs totaling more than $1
         million, (2) did not properly award contracts, and (3) lacked integrity in its daily
         operations.

     •   The South Landry Housing Authority, Grand Coteau , LA, Did Not Always Comply With
         Federal Procurement and Financial Requirements, Including a Procurement Using
         Recovery Act Funds, Audit Memorandum 2014-FW-1806 – The Authority did not have
         (1) adequate oversight by its board and former executive director or (2) finalized and
         approved written policies and procedures to govern its procurement activities, credit card
         use, inventory, time and attendance tracking, and board proceedings. However, the board
         had not received training and was unaware of its roles and responsibilities. Also, while
         the Authority had written bylaws to govern its board, those bylaws were more than 50
         years old 15 and included procedures that conflicted with program requirements. For
         instance, the bylaws stated that regular board meetings may be held without notice;
         however, the Authority was required to provide notice.



15
     The bylaws did not show an effective date; however, approved board resolutions included within the bylaws
     were dated 1960.




                                                       11
       In addition, the Authority did not have controls in place to ensure that its day-to-day
       operations complied with HUD requirements. Specifically, although the Authority had
       22 written policies, the board had approved only its procurement policy, which was dated
       June 2009. The remaining 21 policies were either incomplete or still in draft form,
       lacked effective dates of implementation, and were not provided to staff. As a result, the
       Authority incurred questioned costs totaling more than $1 million and could not provide
       assurance that it was operated effectively, spent HUD funds in accordance with
       requirements, and protected those funds from waste and abuse.

   •   The City of Brackettville Housing Authority, Brackettville, TX, Failed To Properly
       Operate Its Low-Rent Program But Generally Oversaw Its Capital Fund Grants
       Properly, Audit Memorandum 2013-FW-1803 – The Authority’s board of commissioners
       and executive director did not operate the Authority in accordance with HUD’s program
       requirements. This condition occurred because neither the board nor the executive
       director took adequate steps to oversee the Authority’s operations. In addition, the
       executive director abused her authority and failed to follow established Authority
       policies. As a result, the Authority had excessive past-due tenant accounts receivable
       totaling $42,531 and paid questioned costs and funds to be put to better use totaling
       $31,813.

Boards of Commissioners Did Not Maintain Board Minutes or the Minutes Were Inaccurate
Of the 26 housing agencies reviewed, 6 of the reports or memorandums identified instances in
which the boards did not maintain board minutes or did not maintain accurate minutes of their
meetings. Without accurate meeting minutes, the boards had no evidence supporting actions
taken to ensure that the agencies administered their programs effectively, efficiently, or in
accordance with regulations or requirements.

The following are examples reflecting instances in which housing agencies failed to maintain
minutes or failed to maintain accurate minutes.

   •   The Rotan Housing Authority, Rotan, TX, Did Not Administer Its Public Housing and
       Recovery Act Programs in Accordance With Regulations and Other Requirements, Audit
       Memorandum 2015-FW-1802 – The Authority’s available meeting minutes showed that
       the executive director and its board violated Texas State law. State law required the
       Authority to prepare and keep board minutes or record each open meeting of the body.
       The board minutes must state the subject of each deliberation and indicate each vote,
       order, decision, or other action taken. The Authority’s documentation included the board
       minutes from only 11 meetings for the 45 months from May 2009 through January 2013.
       In addition, none of the resolutions were numbered to allow them to be tracked or kept in
       order. Further, the board signed the minutes for only one meeting. The remaining 10
       board meeting minutes were unsigned; therefore, the Authority lacked assurance that the
       minutes reflected what occurred at the meetings. As secretary for the board, the
       executive director failed to maintain board meeting minutes; however, the board also had
       a responsibility to review and ensure that the Authority maintained the necessary records.
       As a result, the Authority may have taken invalid and unsupported actions.




                                               12
     •   The Colfax Housing Authority, Colfax, LA, Did Not Properly Administer Its Programs,
         Including Its 2009 American Recovery and Reinvestment Act Grant, Audit Memorandum
         2014-FW-1801 – The Authority did not maintain true and accurate records of its board
         proceedings and board resolutions. Louisiana State regulations require all public bodies
         to keep written minutes of all open meetings as public records. However, a review of the
         board minutes and board resolutions revealed many inaccuracies and misrepresentations.
         Specifically, the Authority documented records for meetings that did not occur and
         decisions that board members did not vote on. Without accurate board meeting minutes,
         the Authority could not ensure that its actions had proper board approval or that the board
         provided adequate oversight.

Housing Agencies Paid Board Members in Violation of Requirements
Contrary to requirements, two housing agencies paid board members compensation for services.
The Jefferson Parish Housing Authority16 made monthly payments totaling $99,006 to board
members, plus $7,800 for board members to perform home inspections for the Authority’s
Section 901 home program. The Housing Authority of the City of Sparta, GA, 17 paid a board
chairman $11,989 in ineligible payments. The annual contributions contract specifically
prohibited agencies from paying compensation for the services of board members.

A Housing Agency Appointed a Related Party to the Board
In violation of Federal regulations, the conflict of interest provisions of its annual contributions
contract, and State law, the Malakoff Housing Authority appointed the executive director’s
mother-in-law to the Authority’s board of commissioners. She was later elected board chairman.
This action represented a significant breach of public trust. Since the responsibility to sign and
authorize Authority expenditures rested with the executive director and the chairman or vice
chairman, this action increased the risk that HUD funds would be misappropriated, wasted, or
misused as the individual responsible for reviewing and approving checks issued by the
Authority had a conflict of interest.

HUD Has Implemented Training and Taken Other Actions to Improve Management
Knowledge and Housing Agency Capacity

HUD has implemented online training, and changed program requirements to improve
management knowledge and housing agency capacity. In addition, legislation has been proposed
that may allow very small and small housing agencies to join in consortia or consolidate into a
larger agency, which may improve their operations.

HUD Implemented Online Training
In July 2015, HUD’s Office of Public and Indian Housing launched an online training course,
Lead the Way, that is designed to help housing agencies’ boards and staff fulfill their
responsibilities in providing effective governance and oversight. The training is designed

16
     The Jefferson Parish Housing Authority, Marrero, LA, Violated Federal Regulations, Audit Report
     2012-AO-1002, issued July 30, 2012
17
     The Housing Authority of the City of Sparta, GA, Did Not Maintain Adequate Controls Over Its Federal Funds,
     Audit Report 2012-AT-1006, issued January 24, 2012




                                                       13
primarily for board members, but executive staff can use the tool to hone their skills and improve
housing agency operations.
The training covers:

   •   Fundamentals of Oversight presents the history and context of public housing.
   •   Roles and Responsibilities addresses housing agency board and staff functions.
   •   Public Housing Basics outlines key components of public housing.

The training is intended to help enhance skills in six key aspects of housing agency governance
and financial management: asset management, Housing Choice Voucher program, budgeting,
ethics, assessing your housing agency, and knowing your housing agency.
HUD Changed Program Requirements and Legislation Was Proposed
Recent HUD program changes and proposed legislation may allow very small and small housing
agencies to join in consortia or consolidate into a larger agency. These options may improve
economies of scale, address internal control issues identified in our reviews, and improve HUD’s
ability to monitor the housing agencies.

HUD should consider additional cost effective controls to further its attempts to improve the
performance of these very small and small housing authorities. For example, HUD should
require housing agencies to provide an acknowledgement signed by executive directors and
board chairpersons each time they are hired or appointed. The acknowledgement should detail
the executive director’s and chairperson’s awareness and understanding of their responsibilities
and their acceptance that failure to comply with requirements could result in administrative or
other actions.

HUD Resolved the Majority of the Recommendations
HUD has resolved the majority of the recommendations in the 15 audit reports and 11
memorandums included in Appendix B. The resolution of these recommendations has resulted
in the repayment of Federal funds, referral of individuals for administrative sanctions, removal or
replacement of executive directors and board of commissioner members, consolidation of
housing authorities, implementation of policies and procedures, and technical assistance and
training for housing agency management and staff.

                                        CONCLUSION

We identified several common violations of HUD and other requirements in 24 of 26 very small
and small housing agencies reviewed. Specifically, the housing agencies reviewed (1) did not
have adequate financial controls, (2) did not follow procurement regulations or maintain
documentation to support their procurement functions, and (3) did not properly administer tenant
rents. In addition, executive directors and the boards of commissioners violated requirements.
These conditions occurred because agencies’ management either chose to ignore requirements or
lacked sufficient knowledge to properly administer their HUD programs. HUD stated that it did
not have adequate resources to properly monitor or maintain sufficient contact with the housing
agencies to provide them with necessary guidance and feedback. As a result, 24 of 26 housing
agencies had questioned costs and funds to be put to better use of more than $18 million. The




                                                14
implementation of the training, program changes, and proposed legislation should improve the
knowledge of housing agency management and improve the capacity of very small and small
housing agencies.

                                   RECOMMENDATIONS


We recommend that the Deputy Assistant Secretary, Office of Public Housing and Voucher
Programs,

1A.    Issue guidance to housing agency boards and executive directors, reminding them of their
       duties and responsibilities regarding the administration of their HUD funds and programs
       and the potential impacts of failing to comply with requirements.

1B.    Issue guidance to local officials regarding their duties when appointing and removing
       board members.

1C.    Require that housing agencies provide HUD with a signed acknowledgement by
       executive directors and board chairpersons when they are hired or appointed. The
       acknowledgement should detail their awareness and understanding of their
       responsibilities, and their acceptance that failure to comply with requirements could
       result in administrative or other actions.

We recommend that the Deputy Assistant Secretary, Office of Field Operations,

1D.    Continue refining the HUD online training as planned to include adding the risk
       management and program integrity module and to ensure the training provides the needed
       education to housing agency officials.




                                               15
Appendix A

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




Comment 1



Comment 2




                         16
Comment 2




Comment 3




Comment 4




Comment 5



Comment 1
Comment 4




            17
                         OIG Evaluation of Auditee Comments

Comment 1   HUD requested that OIG acknowledge that a number of the recommendations in
            the reports and memorandums discussed in this memorandum have been closed.
            HUD also requested that OIG acknowledge that HUD field offices worked
            collaborative with the OIG and referred a number of the housing agencies to OIG
            for review.

            We acknowledge and appreciate HUD’s cooperation during the reviews and its
            efforts to address the more than 200 recommendations in the reports and
            memorandums included in this memorandum. We revised the memorandum
            accordingly.

Comment 2   HUD stated that it has taken significant steps to improve oversight of and training
            to small and very small housing agencies. It stated that it is committed to
            expanding its ongoing work to ensure that the boards and executive directors of
            small and very small housing agencies have increased access to training.

            We acknowledge and appreciate HUD’s commitment. HUD’s efforts in
            developing and in July 2015 releasing the “Lead the Way/PHA Governance and
            Financial Management: A Training for PHA Board Members and Executive
            Staff” provides a good resource to housing agency boards and management.

Comment 3   HUD commented that it has engaged local appointing officials in the housing
            agency recovery process and required their signatures and participation as part of
            the recovery agreement with HUD.

            We recognize HUD’s efforts to reach out to local appointing officials to ensure
            the officials are aware of the importance of their role in appointing and holding
            board members accountable for the performance of the housing agencies.

Comment 4   HUD stated that it is actively taking steps to encourage the formation of
            consortiums and is in the process of developing a proposed rule that would
            streamline the requirements. As such, it requested that OIG remove the
            recommendation made in the draft memorandum that HUD continue to explore
            options such as consortiums and consolidations.

            We deleted the recommendation.

Comment 5   HUD commented that requiring the execution of a new annual contributions
            contract every time an executive director is hired, as recommended in the draft
            memorandum, would be labor intensive. HUD is exploring other viable
            alternatives to accomplish the intended goal of ensuring that executive directors
            and other officials are aware of their responsibilities.

            We modified the recommendation.




                                             18
Appendix B

 QUESTIONED COSTS AND FUNDS TO BE PUT TO BETTER
  USE IDENTIFIED IN REPORTS AND MEMORANDUMS

 Report or                                                         Unsupported-   Funds to be
memorandum                                         Ineligible      unreasonable   put to better
  number                Housing agency               costs             costs           use
               Gallia Metropolitan Housing
2012-CH-1001   Authority                           $     11,397
               Housing Authority of the City of
2012-FW-1010   Mineral Wells                             14,145
               Housing Authority of the City of
2012-AT-1006   Sparta                                   127,134      $ 397,782
               Jefferson Parish Housing
2012-AO-1002   Authority                                202,114         453,793
2012-KC-1004   Manhattan Housing Authority                               10,349
2012-AT-1007   Shelby County Housing Authority          315,372         213,694     $ 450,955
2012-FW-1009   Gonzales Housing Authority                 7,600
2012-DE-1002   Trinidad Housing Authority                               355,701
2012-DE-1004   Aurora Housing Authority                  22,018         206,377
               Adams County Housing
2013-DE-1004   Authority
2013-FW-1803   Brackettville Housing Authority           17,149          12,357          2,307
2014-FW-1801   Colfax Housing Authority                   2,733       1,031,961
2013-FW-1802   Idabel Housing Authority                                 180,379
2013-FW-1005   Grants Housing Authority
               Jefferson County Housing
2013-DE-1005   Authority                               1,126,974                     5,496,367
2013-FW-1805   Malakoff Housing Authority               353,015         224,352
               Housing Authority of the City of
2014-FW-1802   Nixon                                      6,480         109,861
               Truth or Consequences Housing
2014-FW-1002   Authority
               Housing Authority of the City of
2014-FW-1804   Beeville                                  14,254          44,232
2014-FW-1806   South Landry Housing Authority             3,840       1,030,900
2014-KC-0005   Wellston Housing Authority                                              301,938
2014-KC-1004   Nevada Housing Authority                                                 33,547
2014-FW-1805   Kenner Housing Authority                     849       2,805,806
2015-FW-1802   Rotan Housing Authority                                   89,397        382,217
               Housing Authority of the City of
2015-FW-1801   Taylor                                    41,257         322,256      2,032,266
               Housing Authority of the City of
2015-FW-1805   Lockney                                   20,328          17,178         46,950
Totals                                             $2,286,659        $7,506,375     $8,746,547




                                                  19
Appendix C

                        SCHEDULE OF DEFICIENCIES
                                                                                   Board and
                                                                                    executive
 Report or                                  Inadequate    Violation of               director
memorandum                                   financial   procurement     Tenant      violated
  number             Housing agency           controls   requirements     rents   requirements
               Gallia Metropolitan
2012-CH-1001   Housing Authority                X             X
               Housing Authority of the
2012-FW-1010   City of Mineral Wells                          X
               Housing Authority of the
2012-AT-1006   City of Sparta                   X             X                        X
               Jefferson Parish Housing
2012-AO-1002   Authority                        X             X                        X
               Manhattan Housing
2012-KC-1004   Authority                                      X
               Shelby County Housing
2012-AT-1007   Authority                        X             X
2012-FW-1009   Gonzales Housing Authority                     X
2012-DE-1002   Trinidad Housing Authority                     X
2012-DE-1004   Aurora Housing Authority                       X
               Adams County Housing
2013-DE-1004   Authority
               Brackettville Housing
2013-FW-1803   Authority                        X                          X           X
2014-FW-1801   Colfax Housing Authority         X             X            X           X
2013-FW-1802   Idabel Housing Authority         X
2013-FW-1005   Grants Housing Authority         X             X                        X
               Jefferson County Housing
2013-DE-1005   Authority                        X
2013-FW-1805   Malakoff Housing Authority       X             X            X           X
               Housing Authority of the
2014-FW-1802   City of Nixon                    X                                      X
               Truth or Consequences
2014-FW-1002   Housing Authority                X
               Housing Authority of the
2014-FW-1804   City of Beeville                 X                          X           X
               South Landry Housing
2014-FW-1806   Authority                        X             X                        X
2014-KC-0005   Wellston Housing Authority
2014-KC-1004   Nevada Housing Authority
2014-FW-1805   Kenner Housing Authority         X             X
2015-FW-1802   Rotan Housing Authority          X             X            X           X
               Housing Authority of the
2015-FW-1801   City of Taylor                   X
               Housing Authority of the
2015-FW-1805   City of Lockney                  X                                      X




                                               20
Appendix D

                      EXAMPLES OF INVESTIGATIONS

                                Investigative results
      Housing agency                                    Summary
Somersworth Housing        The Authority’s finance director stole $927,832 over a period of
Authority                  about 7 years. The Authority’s auditor discovered the fraud in
Somersworth, NH            2009. On May 14, 2013, the board terminated the executive
                           director’s employment due to lack of management oversight
                           during the period in which the fraud was committed.
Sellersburg Housing        From 2008 through 2012, the executive director wrote 47
Authority                  checks totaling $48,092 to nonexistent landlords and kept the
Sellersburg, IN            money. In addition, the executive director forged the board
                           members’ signatures on the checks. The fraud was discovered
                           when the executive director’s son received a letter from the
                           Internal Revenue Service about unreported income from a rental
                           property. The son contacted the State’s HUD office. The State
                           then contacted the Authority’s board of directors, which brought
                           the matter to the police.
Church Point Housing       The executive director altered board meeting minutes to reflect
Authority                  a $7,500 board-approved raise for herself. She also wrote many
Church Point, LA           checks to individuals and companies, sometimes without the
                           board’s knowledge, for work that was not done and submitted
                           false invoices to verify these expenses. In addition, she forged
                           signatures on the back of checks then cashed them and
                           converted the money to her personal use. At times, another
                           individual assisted her in the fraud. The executive director was
                           convicted of theft of government funds, sentenced to 5 years’
                           probation (11 months electrically monitored), and ordered to
                           pay a $100 special assessment and $195,779 in restitution to
                           HUD. The other individual was convicted of theft of
                           government funds, sentenced to 5 years’ probation (8 months
                           electronically monitored), and ordered to pay a $100 special
                           assessment and $10,830 in restitution to HUD.




                                         21
Gallup Housing Authority   The executive director awarded a contract to remove and
Gallup, NM                 replace sidewalks at an Authority development in 2010. An
                           employee at the construction company submitted invoices to the
                           Authority for work performed by the company for which the
                           company received payment. The executive director paid the
                           invoices and then obtained reimbursement from HUD’s Capital
                           Fund program. The executive director and construction
                           company employee then formed a company together that
                           submitted a fraudulent invoice to the executive director, who
                           approved the invoice for payment from HUD funds, and both
                           men collected a share of the proceeds. The construction
                           company employee fraudulently received more than $75,000
                           through this scheme. In addition, the executive director
                           embezzled more than $15,000 in HUD funds by misusing an
                           Authority debit card. On July 8, 2014, both men entered guilty
                           pleas to conspiracy to commit false claims against the United
                           States and false claims against the United States. The executive
                           director also pled guilty to theft from a program receiving
                           Federal funds and admitted embezzling Authority funds by
                           making personal purchases exceeding $5,000 per year, using a
                           debit card linked to an Authority bank account.
Jacksonville Housing       The former executive director was sentenced to 5 years’
Authority                  probation and 6 months home confinement and ordered to pay
Jacksonville, TX           $100 in fees and $37,475 in restitution to HUD for her guilty
                           plea to theft of government funds. From September 26, 2007,
                           to April 16, 2008, she devised and executed a scheme to steal
                           $37,475 from program funds. She admitted to using credit
                           cards, fuel, a computer, and rental cars for personal use. She
                           also increased her salary without authorization.
Mart Housing Authority     The former executive director was sentenced to 3 years’
Mart, TX                   probation and ordered to pay $100 in fees, a $3,000 fine, and
                           $33,096 in restitution to HUD for theft concerning a program
                           receiving Federal funds. From January 2006 to June 2010, she
                           approved advances and double billing of work hours by
                           certifying her assistant’s time sheets. Her assistant obtained
                           approximately $33,095 in income that she was not entitled to
                           receive. The former assistant to the executive director was
                           sentenced on April 17, 2013, to 6 months confinement and
                           ordered to pay a $100 assessment and $33,096 in restitution to
                           HUD for her earlier guilty plea to theft concerning program
                           receiving Federal funds and aiding and abetting. From January
                           2006 to June 2010, she received unauthorized check advances
                           and double billed her work hours with the assistance of the
                           former executive director.




                                         22
Star City Housing Authority   The former executive director was sentenced to 12 months and 1
Star City, AR                 day imprisonment and ordered to pay restitution of
                              $106,187. She previously pled guilty to one count of theft from
                              a program receiving Federal funds. From February 18, 2010, to
                              May 30, 2012, she embezzled funds from the Authority by
                              misusing the Authority’s credit card and writing checks to
                              related parties for her personal benefit. In addition, the
                              executive director’s ex-husband was sentenced to 6 months
                              imprisonment and ordered to pay restitution of $82,225. He
                              was previously found guilty on one count of aiding and abetting
                              theft of a program receiving Federal funds. Of the $82,225,
                              $21,307 was his primary responsibility, and $60,918 was
                              considered as joint restitution with his ex-wife. He will remain
                              on supervised release for 2 years after serving his prison
                              sentence. From December 2010 to May 2012, the ex-husband
                              assisted the former executive director in embezzling funds from
                              the Authority by cashing checks for work not preformed and
                              kicking funds back to her.
Coeur d’ Alene Tribal         A former administrative assistant and her boyfriend purchased
Housing Authority             money orders totaling $4,175 with the Authority’s credit card,
Plummer, ID                   cashed the money orders, and then used the funds for personal
                              use. The administrative assistant was sentenced to a 7-month
                              term of imprisonment, followed by a 3-year term of supervised
                              release, and was ordered to pay restitution of $4,175 jointly and
                              severally with her boyfriend. Her boyfriend was sentenced to
                              time served and 3 years supervised release.
Eastern Shoshone Housing      The executive director used Indian Housing Block Grant funds
Authority                     to pay herself for unauthorized overtime between 2008 and
Fort Washakie, WY             2010. She failed to report the overtime payroll activity to the
                              Authority’s board for review as required. In March 2013, she
                              was indicted and charged with conversion of moneys from an
                              Indian tribal organization. In December 2013, she was
                              sentenced to 36 months’ probation and ordered to pay $45,545
                              in restitution.
Linn Housing Authority        Between December 2009 and December 2012, the former
Linn, KS                      executive director purchased personal items and services using
                              the Authority credit card totaling about $7,653. These charges
                              were for various items, including but not limited to clothing,
                              shoes, dietary supplements, sporting goods, golf supplies,
                              travel, sporting tickets, concert tickets, personal vehicle
                              property tax and tag fees, dining, and haircuts and manicures.
                              The executive director made payments to the credit card
                              company from the Authority’s bank account. She was
                              sentenced to 1 year probation and ordered to pay $7,652 in
                              restitution to HUD.




                                            23