Audit Report
District Inspector General for Audit
New England District
Report: 98-BO-209-1003 Issued: April 24,
1998
TO: Anthony Britto, Director, Office of Public Housing, Massachusetts State Office, 1PHA
FROM: William D. Hartnett, District Inspector General, Office of Audit, 1AGA
SUBJECT: City of Woonsocket Housing Authority
Public Housing Drug Elimination Program
Woonsocket, Rhode Island
We conducted an audit of the Woonsocket Housing Authority’s (PHA) Public Housing Drug
Elimination Program (PHDEP) for Fiscal Years 1994 through 1996. The purpose of our
review was to determine if the PHA administered and implemented its Drug Elimination
Programs in accordance with HUD requirements.
We determined that the PHA needs to improve administration of the Program and reimburse
the Program for $74,455 of ineligible costs.
Within 60 days, please provide us a status report on: (1) the corrective action taken; (2) the
proposed corrective action and the date to be completed; or (3) why action is not considered
necessary. Also, please furnish us copies of any correspondence or directives issued related to
this audit.
If you have any questions, please contact our office at (617) 565-5259.
98-BO- 209-1003
Executive Summary
We performed an audit of the Woonsocket Public Housing Authority’s (PHA)
management of its Public Housing Drug Elimination Program (PHDEP). The
PHA was awarded $1,050,000 in PHDEP funds for FYs 1994 through 1996. As
of December 31, 1997, the PHA has reported PHDEP expenditures of $808,698.
The purpose of our audit was to determine if the PHA effectively administered its
PHDEP, including monitoring and reporting to HUD outcomes/benefits resulting
from the grants, and properly accounting for grant expenditures.
Audit Results
We determined that the PHA needs to:
• Implement a system for evaluating, monitoring and reporting Program
outcomes under PHDEP.
• Report revisions of PHDEP plans to HUD for approval;
• Prepare performance reports in accordance with regulations;
• Ensure the eligibility of costs charged to the program; and
• Improve contract administration over service providers.
We believe that these conditions exist because the PHA delegated oversight on this
Program to a Consultant as the Drug Elimination Grant Coordinator and did not
adequately monitor his performance. As a result, HUD has no assurance that all
program objectives were being met and that PHDEP funds spent during FYs 1994
- 1996 were used in the most efficient and effective manner.
The PHA made revisions to its PHDEP program activities which were not
reported in writing to HUD. Further, the Semi-Annual Performance Reports
submitted to HUD were found to be substantially incomplete, and unreliable.
The PHA also did not ensure that service providers (vendors) under Drug
Elimination complied with provisions regarding reporting requirements and
measurable outcomes.
The PHA charged $74,455 of ineligible costs to the PHDEP to supplement the
Woonsocket Police Department (WPD) and non-PHDEP activities which are
ineligible. The PHA purchased an evidence collection van, computer equipment,
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and training gear for the WPD. The equipment is located at the WPD and being
used exclusively by the WPD for its city-wide police work. The PHA also
purchased computer equipment to supplement its PHA staff in performing non-
PHDEP duties.
Recommendations
We are recommending that the PHA submit a plan for HUD’s approval to identify
the uses of remaining grant funds, implement a system for monitoring and
reporting grant outcomes/benefits and report them in timely and accurate
Performance Reports to HUD, improve contract administration over service
providers, and improve its accounting over grant funds. We are also
recommending that the Field Office disallow $74,455 in costs and instruct the PHA
to reimburse the Program for all ineligible costs.
Findings And Recommendations Discussed
We discussed the findings with PHA officials during the course of the audit and at
an exit conference on March 5, 1998. On April 8, 1998, the PHA provided a
response to the findings and recommendations in the draft report. The PHA
generally agreed with the deficiencies cited in the report and described the actions
planned to implement each recommendation. We have included the PHA’s
pertinent comments in the Finding and Recommendations section of this report.
It should be noted that Recommendation 1A in the draft report intended for the
PHA to provide assurances of its capacity to carry out the Program in its plan to
HUD on the use of remaining funds. Instead the PHA seems to have made a
statement of assurance that it has the capacity to carry out the expenditures of the
remaining funds rather than carry out the Program. We, therefore, modified the
recommendation accordingly.
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Table of Contents
Management Memorandum ..................................................................i
Executive Summary.............................................................................ii
Table of Contents ...............................................................................iv
Introduction.........................................................................................1
Findings and Recommendations
1. PHA Needs To Improve Administration Of Its
Drug Elimination Program ...................................................3
2. PHA Charged Costs Of $74,455 To The Drug
Drug Elimination Program Which Appear To
Be Ineligible.......................................................................12
Internal Controls................................................................................15
Appendices
1. Auditee Comments .............................................................16
2. Distribution ........................................................................18
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Abbreviations:
CFR Code of Federal Regulations
FY Fiscal Year
FOP Fraternal Order of Police
NOFA Notice of Funding Availability
PHA Public Housing Authority
PHDEP Public Housing Drug Elimination Program
WPD Woonsocket Police Department
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Introduction
The Housing Authority of the City of Woonsocket, Rhode Island (PHA), is a
quasi-governmental public entity responsible for the ownership, oversight, and
management of 1,310 low income units in the City of Woonsocket. The PHA has
2 family developments, 4 elderly developments, and 51 scattered sites. A five
member Board of Commissioners, appointed by the Mayor of Woonsocket,
governs the PHA. The Chairman of the Board is Mary A. Longtin.
The goals of the Public Housing Drug Elimination Program (PHDEP) are to
eliminate drug-related crimes and problems associated with it and encourage
Housing Authorities and Resident Management Corporations to develop a plan to
address drugs and other related problems that includes prevention and intervention
initiatives that can be sustained over a period of several years.
The PHA implemented their first PHDEP in 1991. For Fiscal Years 94 through
96, the PHA has expended funds under a number of activities to include: (1)
Reimbursement of Law Enforcement; (2) Voluntary Tenant Patrols; (3) Physical
Improvements; (4) Drug Prevention; (5) Drug Intervention; and (6) Drug
Treatment. In 1995, the PHA hired a consultant to administer its Drug Elimination
program.
The PHA was awarded $1,050,000 in PHDEP funds for Fiscal Years (FY) 1994
through 1996. As of December 31, 1997, the PHA reported $808,698 in PHDEP
expenditures and has drawndown $752,603 from HUD.
Funds Funds Balance
FY PHDEP Grant Awarded Reported Costs Drawndown Available
1994 $ 300,000 $300,000 $300,000 -0-
1995 $ 375,000 $359,021 $340,912 $ 15,979
1996 $ 375,000 $149,677 $111,691 $225,323
Total $1,050.000 $808,698 $752,603 $241,302
Audit Objectives
The overall audit objective was to determine if the PHA administered and
implemented its Drug Elimination Programs in accordance with HUD
requirements. Specific audit objectives were to determine whether the PHA:
• Implemented a system for evaluating, monitoring and reporting program
outcomes/benefits.
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• Prepared and submitted timely and accurate semi-annual Performance Reports
to HUD.
• Established controls over its PHDEP planned expenditures, including
assurances that only eligible costs were charged to grants.
• Executed and monitored contracts with service providers, including the
Consultant Drug Coordinator.
Audit Scope and Methodology
We reviewed the PHA’s controls and procedures over its implementation of the
Program and administration of PHDEP grants awarded for FYs 1994 through
1996. We reviewed PHDEP grant applications, grant agreements, financial
records, and monitoring reviews by the Rhode Island State Office, Massachusetts
State Office and the PHA. Audit tests included comparison of Program objectives
to accomplishments and comparison of PHA financial records by the HUD
approved PHDEP grant budgets to determine if costs were in accordance with
agreements. We also tested eligibility and support for costs, the success of the
PHDEP, and service provider contracts under PHDEP.
We interviewed Massachusetts State Office, Office of Public Housing program
staff; Rhode Island State Office, Office of Public Housing staff; Housing
Managers at the two PHA family developments; PHA staff and its PHDEP
consultant and officers of the Woonsocket Police Department.
We performed our audit from April 1997 through February 1998. The audit
covers the period January 1, 1994 through December 31, 1997. The audit period
was extended as necessary.
We conducted our audit in accordance with generally accepted government
auditing standards.
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Findings
Finding 1
PHA Needs To Improve Administration Of Its
Drug Elimination Program
The PHA needs to improve its administration of the Public Housing Drug
Elimination Program (PHDEP), specifically, the PHA did not:
• Establish an effective system for evaluating, monitoring and reporting
outcomes/benefits received from Program activities.
• Properly report initiated, expended and deleted programs in its Drug
Elimination Plan activities to HUD.
• Effectively monitor the contracted services of its Program Coordinator and
Service Providers.
We believe that these conditions exist because the PHA delegated oversight on this
Program to a Consultant as the Drug Elimination Grant Coordinator (Consultant)
and did not adequately monitor his performance. As a result, HUD has no
assurance that all program objectives were being met and that PHDEP funds spent
during FYs 1994 -1996 were used in the most efficient and effective manner.
Program Monitoring and Reporting Requirements
24 CFR, part 761.35 states, in part, that Grantees ( in this case the PHA) are
responsible for managing the day-to-day operations of grant and subgrant
supported activities. Grantees must monitor grant and subgrant supported
activities to assure compliance with applicable Federal requirements and that
performance goals are being achieved. Grantee monitoring must cover each
program, function or activity of the grant.
24 CFR, Part 761.35(a)(1) states, in part, that grantees are required, in accordance
with 24 CFR, Part 85.40(b)(1)(2) and 85.50(b) to provide the local HUD office
with a Semi-Annual Performance report, as of June 30 and December 31 of each
year, that evaluates the grantees performance against its plan. These reports shall
include (but are not limited to) the following in summary form:
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(i) Any change or lack of change in crime statistics or other indicators drawn
from the applicant’s plan assessment and an explanation of any difference;
(ii) Successful completion of any of the strategy components identified in the
applicant’s plan;
(iii) A discussion of any problems encountered in implementing the plan and
how they were addressed;
(iv) An evaluation of whether the rate of progress meets expectation;
(v) A discussion of the grantee’s efforts in encouraging resident participation;
and
(vi) A description of any other programs that may have been initiated,
expanded, or deleted as a result of the plan, with an identification of the
resources and the number of people involved in the programs and their
relation to the plan.
Finally, part 76.1.35(b) requires a final cumulative performance report to be
submitted to the local HUD office within 90 days after termination of the grant
agreement that evaluates the grantee’s performance against its plan, including (but
not limited to) the above information. As of December 31, 1997, the only report
required to be submitted was for the FY 94 PHDEP grant agreement, which was
submitted in November 1997. Our review showed that it did not address the
information HUD required by Items (i) and (iv) through (vi) above. As a result,
even after the grant has expired, the PHA has not properly evaluated its
performance against the plan for that year to HUD.
Program Outcomes/Benefits Not Reported To HUD
Semi-Annual Performance Reports contain two components, namely the Outcome
Monitoring Report, which reports crime statistics in the community and PHA
developments, and resident participation/performance indicators, and the Progress
Report Narrative, which reports the information in (i) through (vi) above, related
to outcomes/benefits. We found that the PHA submitted all four Outcome
Monitoring Reports for FY 1995 and 1996; but only one of the four Progress
Report Narratives, which was for the period ending June 30, 1995. We also found
that the one Narrative Report did not contain a comparison of actual
outcomes/benefits to the objectives established for the six month period, in order
that HUD could evaluate whether the grant was being implemented in accordance
with program objectives or if desired outcomes were being realized.
Unsupported/Unreliable Crime Data In FY 95 & 96 Monitoring Reports
Our review of the four Outcome Monitoring Reports for FY 95 and 96 showed
that the crime statistics and other data reported to HUD were, for the most part,
unsupported and unreliable. In fact, 39 percent of the crime statistics reported
were either left blank or reported as “Unavailable or Unknown,” and
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“Approximate.” Also, some of the crime statistics reported, in whole numbers,
are questionable. For example, from the first six months to the second in 1995,
total Calls For Service in the community rose from 460 to 24,940, dropped to
17,665 for the first six months of 1996, and rose again to 27,149 in the second six
months. According to the PHDEP Consultant, the PHA used crime estimates
instead of actual data reported by the Woonsocket Police Department.
Unsupported/Unreliable Participation/Performance Data In FYs 95 and 96
Monitoring Reports
The PHA also used estimates instead of actual data in the PHDEP
Participation/Performance Indicators section of the Report for FYs 95 and 96.
This section reports the number of residents involved in up to 14 PHDEP
activities. Our review of the data reported for the two years showed that 83
percent is identified as “approximate.” The Consultant advised that he did not
collect actual data on resident involvement and had no documentation or basis for
the figures included in the report. Unless the PHA ensures that
Participation/Performance Indicators are accurate and can be supported, neither
HUD nor the PHA can properly measure program results.
Initiated, Expanded, and Deleted programs Not Reported To HUD
In accordance with the above cited reporting requirement from 24 CFR 761.35,
the PHA should have submitted Semi-Annual Progress Reports to include a
discussion of programs that may have been initiated, expanded, or deleted as a
result of the plan.
In addition, Article II of the Drug Elimination Grant Agreements states that the
grantee shall not make or cause to be made any changes to the services without the
express written consent by HUD, the granting of which consent shall be in the sole
discretion of HUD.
In comparing the PHDEP plans to the actual charges made by Program activity, by
Fiscal Year, we found $86,251 charged in FYs 94 and 95 for PHDEP activities
that were not in the HUD approved plans for those years and $55,000 for HUD
approved activities for which the funds were not spent by the end of the grant
terms, as of December 31, 1997. Since the PHA has never complied with the
reporting requirements addressed above, HUD was not informed about this
$141,251 in plan changes, which represents approximately 21 percent of the costs
charged to the grants for those two years. We did not find the same situation for
the FY 96 grant, as of December 31, 1997.
PHDEP Amt.
Grant Budgeted Amt. Charged
Activity Year PHDEP To PHDEP Explanation
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PHDEP Amt.
Grant Budgeted Amt. Charged
Activity Year PHDEP To PHDEP Explanation
Investigator Salary 1994 -0- $ 5,000 Not reported in Grant Application
Summer Work 1995 -0- $21,000 Not Reported in Grant Application
Project Director 1995 -0- $42,251 Not reported in Grant Application
Campus of
Learner’s Program
Youth Assistants 1995 -0- $ 7.000 Not reported in Grant Application
Transportation 1995 -0- $11,000 Not Reported in Grant Application
Drug Assessment 1994 $20,000 -0- Activity never funded
Counselor
Parent 1994 $10,000 -0- Activity never funded
Intervention
Computer 1994 $ 5,000 -0- Activity never funded
Consultant
Cross 1995 $20,000 -0- Activity never funded
Resident/Police
Training
Incorrect Charging To Program Activities
We also found instances of charges made to incorrect PHDEP activities (budget
line items) and, in one instance, a charge which should have been made to the
PHA’s Comprehensive Grant Program. The significance of these incorrect charges
is that costs to the proper PHDEP activities are understated and the others are
overstated.
Account Activity
Should Have Been
Grant Actual Grant Account Charged by Charged by Line
Year Amount Program Activity Line Item Item
1996 $90,000 Investigative Services 9130-Employment of 9110-Reimbursement
Investigators of Law Enforcement
1995 $25,000 Various-Adult 9140-Voluntary Tenant Various
Education, Group Patrols 9160-Drug
Counseling, etc. Prevention
9170-Drug
Intervention
1995 $19,850 Public Drug 9190-Other Programs 9110-Reimbursement
Investigation of Law Enforcement
1995 $10,000 Resident Training 9140-Voluntary Tenant Comprehensive
Patrols Grant Program
1994 $14,128 Tutoring/Monitoring 9170-Youth Activities 9160-
Tutoring/Monitoring
1994 $ 6,200 Support for In-house 9190-Other Programs 9110-Reimbursement
two officers of Law Enforcement
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In addition, the PHA charged $7,400 in police salaries (Operation Safe Home) to
the wrong PHDEP activity in the wrong PHDEP grant year. The PHA charged
1996 PHDEP grant year police salaries to the 1994 PHDEP grant under “Drug
Treatment.” This was done because funding was still available.
Ineffective Execution and Monitoring of Program Coordinator Contract
The PHA contracted with a consultant to function as the Drug Elimination
Program Coordinator (Consultant), to whom the PHA delegated oversight of this
Program, at a cost of $102,647 over 33 months. Even though the awarding of this
contract was based on a competitively advertised bid process, we found
weaknesses in the execution and monitoring of the contract by the PHA, which
we believe contributed to the lack of proper administration and reporting of
Program outcomes/benefits to HUD and the charging of ineligible costs identified
in Finding 2.
Even though the original contract term was from April 1995 to November 1996,
we found that the Consultant was still functioning at the PHA and was paid
$18,913, through May 1997, without a contract. The PHA did execute an
extension to the contract as a result of our review in June 1997 but terminated his
services as of December 31, 1997, for a total of 33 months. The contract also
stipulated that the Consultant was an independent entity and not an employee of
the PHA, and provided that he be paid $20 per hour with an additional $5 per hour
for benefits.
According to the contract, the Consultant was to serve as the Coordinator only on
a Part Time basis for a minimum of 16 and a maximum of 20 hours per week,
except as authorized by the PHA. We reviewed the weekly invoices submitted to
the PHA by the Consultant during the term of the contract and found that:
1. The Consultant charged the PHA and was paid for an average of 25 hours
per week without prior approval of extra hours being made by the
Executive Director.
2. The PHA did not approve the Consultant’s invoices for payment for up to
two to four weeks after the date of the invoice, which could make it
difficult to recall what he accomplished for the payments. The Executive
Director stated that he found it difficult to monitor the Consultant’s
performance.
3. Drug Elimination Grant funds were paid to the Consultant for grant
writing, which was a function in his contract, but is contrary to CFR
761.15, which states in part that, “Funding is not permitted for costs
incurred before the effective date of the grant agreement, including, but not
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limited to, consultant fees for survey related to the application or actual
writing of the application”.
4. Forty-eight percent of the hours were charged by the Consultant while off-
site but were repeatedly supported, in many instances, with vague
descriptions, such as; “Updating records; organizing materials” and
“Gathering and organizing materials for meetings.” The remaining 52
percent of the hours we reviewed on these time cards only showed the total
hours charged on-site, at the PHA, without a description of the work
performed. Even though the Executive Director stated that he was
confident he received value for the Consultant’s work, overall, he found it
difficult to monitor his performance.
We reviewed PHA records and performed interviews of key PHA
personnel to determine the extent to which the Consultant performed the
11 Essential Functions defined in his contract with the PHA and found that
he did not perform the following seven functions:
1. Negotiate final details on service provider contracts including
reporting requirements and measurable outcomes.
We selected six of the nine service providers that received the largest
amount of PHDEP funds, accounting for $278,472 or 27 percent of the
total funding for FYs 1994 through 1996, and found that, even though the
contracts with these providers specified requirements for periodic
measuring and reporting outcomes to the PHA, the following five did not
provide the information required.
a. Youth Activities Coordinator
b. Youth Summer Work Programs
c. Group Counseling Program with ROAD Counseling
d. RIRAL-Adult Education
e. University of R.I. Comprehensive Needs Assessment
A review of PHA records indicated that the Consultant did not monitor
these contracts effectively to measure the outcomes being received and to
ensure that they were reported to the PHA. In fact, the Executive Director
and PHA board had to terminate the services of the Youth Activities
Coordinator and did not renew the contract for ROAD Counseling, both
for nonperformance and not meeting the requirements for measuring and
reporting outcomes.
2. Assist Resident Services Coordinators with crime watch/tenant patrol
activity.
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3. Assist Resident Services Coordinators with efforts to empower
Resident Councils and to encourage maximum feasible participation
in drug elimination efforts.
We were informed by one of the two Resident Services Coordinators that
the Consultant did not assist her with these programs. In fact, the Crime
Watch and Voluntary Tenant Patrols program was never implemented even
though it was budgeted for $70,000 in FY 1995.
4. Identify needs for substance abuse prevention and treatment services
in collaboration with resident councils, PHA staff and service
providers.
According to the Executive Director, the Steering Committee meetings on
substance abuse were the most useful vehicle the Consultant had to
collaborate with the resident councils, PHA staff. In addition, it was the
responsibility of the Consultant to facilitate an ongoing Drug Elimination
Steering Committee, according to his contract with the PHA. However,
although we found written agendas prepared by the Consultant for
scheduled monthly meetings, we could only find meeting minutes for five
meetings held during the 33 month tenure of the Consultant. The
Executive Director informed us that, since they had trouble getting
adequate participation at the meetings, they were changed to quarterly.
5. Ensure service and documentation compliance with contracts, PHA,
State and Federal Regulations.
The deficiencies noted in function 1 above, the lack of measuring and
reporting of outcomes, and unreported changes in program activities, etc.
to HUD which are identified in this finding, and the ineligible costs charged
in Finding Number 2 of this report, provide adequate evidence for
nonperformance of this function.
6. Compile monthly statistics, prepare semi-annual report to Steering
Committee and Board of Commissioners.
We could not find any documentation in the PHA files to show that the
Consultant compiled monthly statistics or prepared semi-annual reports to
either of these two groups. The Executive Director admitted that this was
a major shortcoming of the Authority and that he will strive to educate his
staff on the importance of compiling information that will assist the PHA in
evaluating its programs under PHDEP.
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7. Prepare and monitor program budget.
Even though the Consultant prepared the annual PHDEP budget, we
determined that the Consultant did not effectively monitor the budget for
the PHA or HUD. This is illustrated by the Ineligible Costs charged in
Finding Number 2 of this report and the Initiated, Expanded, and Deleted
Programs as well as the Incorrect Charges to budget line items described in
this finding which were not reported to HUD..
In summary, the lack of measuring, evaluating, and reporting Program results by
the PHA, and the lack of adequate monitoring of the Consultant makes it difficult
for HUD to determine whether sufficient outcomes/benefits were received from
the award of $1,050,000 in PHDEP funds to this PHA. As a result, the HUD Field
Office needs to assess the capacity of this PHA to perform under future grants.
Finally, since the PHA did not receive PHDEP funding for FY 1997, we reviewed
HUD’s rating sheets and accompanying explanations on the PHAs application and
found that funding was denied for the same reasons we have addressed in this
finding. Specifically, they described the lack of adequate crime statistics, and lack
of outcomes/benefits being identified.
In its April 8 response to Recommendation 1A in the draft report, the PHA
assured HUD that it had the capacity to carry out expenditures of the remaining
funds rather than assurances it had the capacity to carry out the Program in its plan
to HUD. We, therefore, modified the recommendation accordingly.
Recommendations
We recommend that you require the PHA to:
1A. Submit a plan which will identify the uses for remaining PHDEP funds and
will provide assurances that the PHA has the capacity to carry out the
Program.
1B. Implement a system for evaluating monitoring and reporting grant
outcomes/benefits.
1C. Establish controls to ensure that all Performance Reports are accurate,
timely, and in accordance with HUD regulations.
1D. Improve its contract administration over grant service providers to ensure
proper execution and effective monitoring.
1E. Improve its accounting of program funds to ensure costs are charged to the
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proper activity account.
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Finding 2
PHA Charged Costs Of $74,455 To The Drug
Elimination Program Which Appear To Be
Ineligible
The Woonsocket Housing Authority (PHA) charged $74,455 to the Public
Housing Drug Elimination Program (PHDEP) to supplement the Woonsocket
Police Department (WPD) and other non-PHDEP activities. As of December 31,
1997, $68,332 was charged for an evidence van, protective vests and computer
equipment for the WPD, and $6,123 was charged for computer equipment being
used by non-PHDEP staff for daily PHA functions.
We believe that these costs are ineligible and resulted from either a lack of
knowledge or oversight by the PHA on the eligibility and ineligibility of PHDEP
costs, provided for in the Code of Federal Regulations (CFR) and the applicable
NOFAs. As a result, these funds were not available to more fully benefit tenants at
the PHA.
Ineligible Charges For the WPD
24CFR761.15, in addressing the use of grant funds, refers to the NOFAs in
providing specific information concerning eligible and ineligible activities.
Subparagraph (b)(2)(ii), concerning the reimbursement of local law enforcement
agencies for additional security and protective services, states that communications
and security equipment to improve the collection analysis and use of information
about drug-related criminal activities in a public housing community may be
eligible items if used exclusively in connection with the establishment of a law
enforcement substation on the funded premises or scattered site developments. In
addition, the PHDEP NOFAs for FYs94 through 96 clearly prohibit the use of
PHDEP funds for the purchase or lease of military or law enforcement clothing or
equipment, such as vehicles, protective vests, and other supporting equipment. In
addition, the NOFAs allow the reimbursement of local law enforcement agencies
for computers only if they are used exclusively for the housing authority
development’s crime prevention and comprehensive security efforts.
In its HUD approved FY 96 PHDEP application, the PHA included its plan and
budget to lease an evidence collection van, in cooperation with the WPD, for drug
and other criminal investigations and collecting evidence. The associated cost
budgeted was $40,000, with the stated expectation that the WPD would contribute
approximately $20,000. HUD should not have approved the application with this
ineligible item included in it. When we asked HUD Field Office staff why this was
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approved, they told us it was an oversight on the part of HUD’s Processing Center
and should not have been approved.
In February 1997, the PHA entered into an 18-month lease agreement with an auto
dealership for a Ford van, which was later converted by another contractor for
evidence collection. As of December 31, 1997, the PHA has spent a total of
$43,100 on the van, consisting of $10,481 in lease payments for 11 months at
$950 and $32,619 for conversion of the van for evidence collection. It should be
noted that there has been no contribution made or offered by the WPD, to date.
Based on our interviews and review of documentation at both the PHA and the
WPD, we found that, not only was this van not used exclusively for or at the PHA
developments, but we could not determine any outcome or benefit being derived
by the developments in the use of PHDEP funds for this purpose. We did
determine that the van is permanently located at the WPD for use throughout the
City of Woonsocket.
In addition, after the lease period, there is a $2,000 buyout option which,
according to the PHA’s Security Administrator, will be executed by the WPD.
Therefore, after the PHA pays almost $50,000 for this van, the WPD will own it
for $2,000. This does not seem to be a good investment of PHDEP funds,
according to the intent of the grant regulations.
The PHA also used FY 95 PHDEP funds of $1,242 to purchase protective vests
for the WPD. The Protective Vests are located exclusively at the Woonsocket
Police Station and are being used exclusively for physical training at the
Woonsocket Police Department and are not used at the PHA developments.
The PHA used FYs 94 and 95 PHDEP funds to purchase $17,371 worth of
computer equipment for the WPD. The six Pentium computers, a Pentium File
Server, a 486 computer, and a printer are located at the WPD and are used
exclusively at the WPD to support the development of city-wide reporting
systems.
24CFR 761.15(b)(2)(ii) and the 1996 NOFA also state that funds for
reimbursement of local law enforcement agencies may not be drawn until the
grantee has executed a contract for the additional law enforcement services. The
PHA did not execute contracts with the WPD for additional services expected,
notwithstanding the fact that the costs were ineligible.
Ineligible Charges for PHA Computers
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24CFR761.3(c) provides that the PHA should establish controls to assure that an
activity or program that is funded by other HUD programs shall not also be funded
by the Drug Elimination Program. In addition, the PHDEP NOFAs for FYs 94
through 96 prohibit PHDEP funds from being used to supplant existing positions
or programs.
Since the PHA had no inventory controls over computer equipment, we traced the
location and use of computers which were purchased using FYs 94 and 95 PHDEP
funds. We found that the PHA used $6,123 in PHDEP funds to purchase
computer equipment which were being used for other HUD programs, not
otherwise funded by the PHDEP, such as the Comptroller and the Director of
Operations and Development.
We recommend that you:
2A. Disallow the $74,455 in costs charged and instruct the PHA to
reimburse the Program for all ineligible costs.
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98-BO- 209-1003
Internal Controls
In planning and performing our audit, we considered the internal controls of the
Housing Authority of the City of Woonsocket, RI (PHA), specifically for it’s
Public Housing Drug Elimination Program (PHDEP), in order to determine our
audit procedures and not to provide assurance on internal controls.
Internal Controls consist of a plan of organization and methods and procedures
adopted by management to ensure that resource use is consistent with laws,
regulations, and policies; that resources are safeguarded against waste, loss, and
misuse; and that reliable data is obtained, maintained, and fairly disclosed in
reports.
Internal Controls Assessed
We determined that the following internal controls were relevant to our audit
objectives;
• Financial Controls Over Program Funds.
• Management Controls Over Eligibility of Program Expenditures.
• Management Controls Over Program Performance.
• Controls Over Procurement and Contracting.
We assessed all relevant controls areas identified above.
Assessment Results
A significant weakness exists if internal controls do not give reasonable assurance
that resource use is consistent with laws, regulations, and policies; that resources
are safeguarded against waste, loss, and misuse; and that reliable data is obtained,
maintained, and fairly disclosed in reports.
Significant Internal Control Weaknesses Exists In All Areas
Our review identified weakness over the PHA’s ability to administer the PHDEP.
These include weaknesses relative to eligibility of program expenditures, program
performance, and procurement and contracting . The weaknesses are described in
the Findings section of this report.
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98-BO- 209-1003
Appendices
Appendix 1
Auditee Comments
16
98-BO- 209-1003
17
98-BO- 209-1003
Appendix 2
Distribution
Assistant Secretary for Public and Indian Housing, P, (Room 4100), (10)
Deputy Assistant for Public and Assisted Housing Programs, PH, (Room 4204)
Deputy Assistant Secretary for Public Housing Investment, PT, (Room 4138), (2)
Director, Office of Capital Improvements, PTC, (Room 4130), (2)
Director, Office of Budget, ARB (Room 4130). (2)
Director, Office of Budget, ARB (Room 3270)
Director, Housing Finance Analysis Division, REF, (Room 8212)
Director, Office of Public Housing, 1APH
Director, Office of Management and Planning, AMM, Washington Office
Center, Suite 310, 401 Third Street, SW, Washington, DC 20024
Chief Financial Officer, F, (Room 10166)
Acquisitions Librarian, AS, (Room 8141)
Director, Policy Development Division, RPP, (Room 8110)
Special Assistant, Office of Public Affairs, WR, (Room 10236)
Departmental Audit Liaison Officer, FOI, (Room 10176)
Audit Liaison Officer, Assistant to the Deputy Secretary for Field Managmeent,
SDF, (Room 7112)
Assistant Director in Charge, US GAO, 820 1st St. NE Union Plaza, Bldg. 2,
Suite 150, Washington, DC 20002
Inspector General, G, (Room 8256)
Robert Kenison, CD, (Room 8162)
HUD OIG Webmaster
Michael Zegera, Public Affairs Officer, G, (Room 8256)
Secretary Representative, 1AS
Public Affairs Officer, New England, 1AS
Field Comptroller, Illinois State Office, 5AF
Ms Cindy Sprunger, Sub Committee on General Oversight & Investigations, Room
212, O’Neill House Office Bldg., Washington, DC 20515
Mr. Pete Sessions, Government Reform and Oversight Committee, Congress of
the United States, House of Representatives, Washington, DC 20515-4305
The Honorable Fred Thompson, Chairman, Committee on governmental Affairs,
United States Senate, Washington, DC 20510-6250
The Honorable John Glenn, Ranking Member, Committee on Governmental
Affairs, United States Senate, Washington, DC 20510-6250
18
City of Woonsocket HA, Woonsocket, RI
Published by the Department of Housing and Urban Development, Office of Inspector General on 1998-04-24.
Below is a raw (and likely hideous) rendition of the original report. (PDF)