Issue Date
April 22, 1998
Audit Case Number
98-CH-209-1001
TO: Debra A. Torres, Director, Office of Public Housing, Illinois State Office
FROM: Dale L. Chouteau, District Inspector General for Audit, Midwest
SUBJECT: Peoria Housing Authority
Drug Elimination Program
Peoria, Illinois
We completed a review of the Peoria Housing Authority’s Drug Elimination Program. The
objectives of our review were determine if the Peoria Housing Authority: (1) implemented Public
Housing Drug Elimination Program awards for Fiscal Years 1994 through 1996 with satisfactory
outcomes/benefits; (2) submitted required performance and financial reports for Fiscal Years
1994 through 1996 to HUD which demonstrated satisfactory results from the Drug Elimination
Program; (3) implemented Public Housing Drug Elimination Program plans and drew down grant
funds according to its plans, budget, and timetable for Fiscal Years 1995 and 1996; and (4)
expended Public Housing Drug Elimination Program funds only for eligible activities in
accordance with the applicable Notice of Funding Availability for Fiscal Years 1995 and 1996.
We found that the Peoria Housing Authority implemented its Drug Elimination Program in
accordance with HUD’s requirements except for the purchase of computer equipment that was
not being used for the intended objectives of the Program.
Within 60 days, please give us, for each recommendation made in this report, a status report on:
(1) the corrective action taken; (2) the proposed corrective action and the date to be completed;
or (3) why you consider action unnecessary. Also, please furnish us copies of any correspondence
or directives issued because of this audit.
Should your staff have any questions, please have them contact me at (312) 353-7832.
Management Memorandum
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98-CH-209-1001 Page ii
Executive Summary
We completed an audit of the Peoria Housing Authority’s Drug Elimination Programs for Fiscal
Years 1994 through 1996. The objectives of the audit were to determine if the Peoria Housing
Authority: (1) implemented Public Housing Drug Elimination Program awards for Fiscal Years
1994 through 1996 with satisfactory outcomes /benefits; (2) submitted required performance and
financial reports for Fiscal Years 1994 through 1996 to HUD which demonstrated satisfactory
results from the Drug Elimination Program; (3) implemented Public Housing Drug Elimination
Program plans and drew down grant funds according to its plans, budget, and timetable for Fiscal
Years 1995 and 1996; and (4) expended Public Housing Drug Elimination Program funds only
for eligible activities in accordance with the applicable Notice of Funding Availability for Fiscal
Years 1995 and 1996.
We found that the Peoria Housing Authority implemented the Public Housing Drug Elimination
Program awards for Fiscal Years 1994 through 1996 with satisfactory outcomes/benefits;
submitted required performance and financial reports for Fiscal Years 1994 through 1996 to HUD
which demonstrated satisfactory results from the Drug Elimination Program; and implemented
Public Housing Drug Elimination Program plans and drew down grant funds according to its
plans, budget, and timetable for Fiscal Years 1995 and 1996. However, the Authority purchased
computer equipment with grant funds that was not being used for its intended purposes.
The Peoria Housing Authority used Drug Elimination
Computer equipment
Program grant funds for computer equipment that was not
purchased with grant
being used for its intended purposes. Six computers were
funds was not being used
not provided to the Peoria Police Department and three
for intended purposes
other computers have not been installed in computer labs
for resident training as required by the HUD approved 1995
and 1996 Drug Elimination Program grants. As a result, the
expenditure of grant funds did not meet the objectives of the
Drug Elimination Program.
We recommend that the Director, Office of Public Housing,
Illinois State Office, assure that the Peoria Housing
Authority: (1) develops a plan and obtains HUD approval
for the program-related utilization of the six lap top
computers purchased with Fiscal Year 1995 Drug
Elimination grant funds; (2) establishes a computer lab at
Harrison Homes and utilizes the three remaining desk top
computers purchased with Fiscal Year 1996 Drug
Elimination Program grant funds for the computer lab; and
(3) develops procedures to ensure that adequate planning
and coordination is performed prior to the purchase of
equipment or services with Drug Elimination Program grant
funds in order for purchases to have an immediate benefit.
Page iii 98-CH-209-1001
Executive Summary
We provided our draft finding to the Peoria Housing
Authority’s Executive Director. We held an exit conference
with the Executive Director on April 6, 1998. The
Authority provided written comments to our finding and
recommendations. We included excerpts from the
comments in the finding; Appendix A contains the complete
text of the comments.
98-CH-209-1001 Page iv
Table of Contents
Management Memorandum i
Executive Summary iii
Introduction 1
Finding
Computer Equipment Purchased With Grant Funds
Was Not Used For Its Intended Purposes 5
Management Controls 11
Follow Up On Prior Audits 13
Appendices
A Audit Comments 15
B Distribution 17
Page v 98-CH-209-1001
Table of Contents
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98-CH-209-1001 Page vi
Introduction
Part 761 of 24 CFR contains the regulatory requirements for the Assisted Housing Drug
Elimination Program and the Public Housing Drug Elimination Program. The purposes of these
programs are to: (1) eliminate drug-related crime and problems associated with it in and around
the premises of Federally assisted low-rent housing, and public and Indian housing developments;
(2) encourage owners of Federally assisted low-income housing, public housing agencies, Indian
housing authorities, and resident management corporations to develop a plan that includes
initiatives of several years for addressing drug-related crime and problems associated with it in
and around the housing premises; and (3) make available Federal grants to help owners of
Federally assisted low-income housing, housing authorities, and resident management
corporations carry out their plans.
The Peoria Housing Authority was awarded Drug Elimination Grant funds of $486,540 for Fiscal
Year 1994; $479,970 for Fiscal Year 1995; and $480,500 for Fiscal Year 1996.
The Authority’s Drug Elimination Program is administered by its Director of Resident Services.
The Drug Elimination Program’s books and records are located at the Authority’s offices at 100
South Sheridan Road, Peoria, Illinois 61605. The Authority’s Executive Director is Roger John.
Our audit objectives were to determine if the Peoria
Audit Objectives Housing Authority: (1) implemented Public Housing Drug
Elimination Program awards for Fiscal Years 1994 through
1996 with satisfactory outcomes/benefits; (2) submitted
required performance and financial reports for Fiscal Years
1994 through 1996 to HUD which demonstrated
satisfactory results from the Drug Elimination Program; (3)
implemented Public Housing Drug Elimination Program
plans and drew down grant funds according to its plan,
budget, and timetable for Fiscal Years 1995 and 1996; and
(4) expended Public Housing Drug Elimination Program
funds only for eligible activities in accordance with the
applicable Notice of Funding Availability for Fiscal Years
1995 and 1996.
To obtain general information about the Authority’s Drug
Audit Scope and Elimination Program, we interviewed appropriate HUD and
Methodology Authority staff. We also reviewed HUD’s grant files.
To identify the activities included in the Authority’s Drug
Elimination Program, and to determine if the PHA properly
identified, analyzed, and reported its drug-related crime to
HUD, we reviewed the Authority’s Drug Elimination
Applications/Plans for Fiscal Years 1994 through 1996.
Page 1 98-CH-209-1001
Introduction
For Fiscal Years 1994 through 1996; we identified each
specific activity for which the PHA received funding, who
would perform the activity, whom the activity was planned
to reach, how many people the activity was designed to
reach, and the timetable for each activity. We compared the
planned Drug Elimination Program activities with actual
accomplishments.
We assessed the extent of the Authority’s drug related
crime problem by reviewing information about various types
of crimes, their prevalence, and the percentage of crimes
that occur at each development designated under the Drug
Elimination Program.
To determine whether crime statistics reported to HUD
were accurate and reliable, we interviewed appropriate law
enforcement officials of the City of Peoria, Illinois to
determine the processes used to gather and collect crime
statistics.
To determine if the Semi-Annual Performance and Financial
Status Reports were submitted to HUD, we reviewed
HUD’s Line of Credit and Control System-Voice Response
System Reporting Grant History for each grant reviewed.
The Reporting Grant History shows the date when Financial
Status Reports were submitted to HUD. We compared the
due dates of the Semi-Annual Performance and Financial
Status Reports to the actual dates the reports were
submitted. We also determined whether the Public Housing
Authority submitted the required Final Performance and
Financial Status Reports within 90 days of the termination
date of the grant agreement.
To determine whether Public Housing Drug Elimination
Program disbursements were eligible and properly
supported, we reviewed source documentation for selected
disbursements including payment records, contracts, and
vendor invoices.
To determine if the Public Housing Drug Elimination
Program grant disbursements were properly recorded in the
Authority’s accounting records, we reviewed the
Authority’s audited financial statements, General Ledger
and Disbursements Schedules.
98-CH-209-1001 Page 2
Introduction
The audit covered Drug Elimination Grant activities for the
period October 1994 through February 1998. We extended
the period as necessary. We performed the audit at the
Authority during January and February 1998.
We conducted the audit in accordance with generally
accepted government auditing standards. We provided a
copy of our draft finding to the Authority’s Executive
Director.
Page 3 98-CH-209-1001
Introduction
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98-CH-209-1001 Page 4
Finding
Computer Equipment Purchased With Grant
Funds Was Not Used For Its Intended Purposes
The Peoria Housing Authority used Drug Elimination Program grant funds for computer equipment
that was not used for their intended purposes. HUD approved the purchase of six laptop computers
and related equipment to be used by police officers assigned to the Drug Elimination Program in order
to gather data and statistics for Drug Elimination Grant Progress Reports. HUD also approved the
purchase of nine desk top computers and related equipment to be used for resident training at three
family developments. The Housing Authority never provided the six laptop computers to the Peoria
Police Department and the Housing Authority has utilized only six of the nine desk top computers for
resident training. As a result, the expenditure of grant funds did not meet the objectives of the Drug
Elimination Program.
OMB Circular A-87, Attachment A, Paragraph C.1 states that
HUD and Authority to be allowable under Federal awards, a cost must be necessary
requirements and reasonable for proper and efficient performance and
administration of Federal awards.
Page PP-2 of the Authority's Procurement Policy states that the
Executive Director or his/her designee shall ensure that
procurement requirements are subject to an annual planning
process to assure efficient and economic purchasing.
The Peoria Housing Authority purchased six laptop computers,
Drug Elimination grant and nine desk top computers and related equipment for
funds were used to $28,548 using Drug Elimination Program grant funds from
purchase computers Fiscal Years 1995 and 1996. The computers were not used for
their intended purposes. HUD approved the purchase of the
six laptop computers and related equipment to be used by
police officers assigned to the Drug Elimination Program in
order to gather data and statistics for Drug Elimination
Progress Reports. HUD also approved the purchase of nine
desk top computers and related equipment to be used for
resident training at three family Developments. The Housing
Authority never provided the six laptop computers to the
Peoria Police Department and the Housing Authority has
utilized only six of the nine desk top computers for resident
training.
Page 5 98-CH-209-1001
Finding
The Authority purchased six laptop computers and related
Computers were not equipment for $14,400 on April 30, 1996 using Fiscal Year
provided to the Peoria 1995 Drug Elimination Program grant funds. HUD approved
Police Department the purchase of the computers. The computers were budgeted
as reimbursement of law enforcement expenses on line item
9110 of the grant agreement. The computers were to be used
by the Peoria Police Department’s Foot Patrol to gather data
and statistics for the Drug Elimination Grant Progress Reports.
However, due to a lack of coordination between the Authority
and the Peoria Police Department the project was never
initiated.
Four of the six computers were not being used regularly by the
Authority and were stored in the Authority’s computer
department. One of these four computers was still in its
original box and plastic wrap.
The Authority's Director of Resident Services said the other
two computers were being used regularly by himself and
another Resident Services employee at home for after hours
work related to the Drug Elimination Program. The Director
said he used a laptop computer to prepare Drug Elimination
memoranda, reports, and to gather statistics for the Drug
Elimination Program. The other Department employee used a
laptop computer to prepare memoranda to various
departments, the Authority’s three family developments, and
community groups regarding computer labs to be established at
the family developments. He said the laptop computers were
being used at home to avoid overtime in the office. Both
employees had desk top computers at the Authority and
therefore had little need for a laptop computer during normal
working hours.
On August 27, 1997, the Authority purchased nine desk top
Computer labs were not computers and related equipment for $14,148 using Fiscal
established for resident
Year 1996 Drug Elimination Program grant funds. HUD
training
approved the purchase of these computers. These computers
were budgeted as Drug Prevention expenditures on line 9160
of the grant agreement. The computers and related equipment
were received on September 5, 1997. The computers were to
be used for resident training in computer labs to be established
at the Authority's three family developments.
As of March 13, 1998, two of the nine computers and related
equipment were in storage at the Authority's Central
98-CH-209-1001 Page 6
Finding
Warehouse. Six of the new computers were installed at
computer labs set up at Taft Homes and Warner Homes. The
other computer was being used in the Authority's Resident
Services Department to replace a computer which had
malfunctioned. These two computers were of the same size
and configuration. The original computer is now repaired and
the Director of Resident Services said the repaired computer
will be used at the remaining computer lab to be established at
the Authority's family developments.
The Director of Resident Services said the Authority had not
yet established the computer labs at all three family
developments because of the lack of secure space at the
developments to safeguard the computers. The Authority set
up a computer lab at Taft Homes on February 28, 1998,
utilizing three of the nine desk top computers purchased with
Drug Elimination Program grant funds. The Authority also
established a computer lab at Warner Homes on March 13,
1998 and plans to establish a computer lab at Harrison Homes
by May 31, 1998. The Authority should have found secure
places to establish the computer labs prior to purchasing the
computers.
Excerpts from the Authority’s response to our draft finding
Auditee Comments follow. Appendix A contains the complete text of the
comments.
Four of the six laptops [purchased for use by the Peoria
Police Department] were not being used on a regular basis.
Three were used periodically by our MIS Department for
staff training. Two laptops were being used continuously by
Resident Services personnel to prepare Drug Elimination
Program correspondence.
The Director of Resident Services will construct an effective
plan for four of the laptop computers. The plan will
determine whether the Police Department has a need for
utilization of the laptops, whether the agency will seek
approval from HUD to transfer the laptops to the Housing
Authority's conventional equipment, or whether the laptops
should be utilized in the computer centers for additional
resident training. This plan should be completed no later
than May 30, 1998. Two of the six laptops will remain with
the Resident Services Department for continued usage of
Page 7 98-CH-209-1001
Finding
the Drug Elimination Grant program administration. This
will also be outlined in detail in the developed plan.
The computer lab in the Warner Homes was set up on
March 13, 1998. The lab for Harrison Homes is scheduled
to be operational by May 31, 1998. Each computer lab will
contain three computers to total out the remaining six.
These will be the computers purchased through Drug
Elimination grant funds along with accessories.
The recommendation to develop procedures that ensures
adequate planning and coordination of services and
equipment will be included in the Resident Services
Standard Operating Procedures Manual. We will also take
into consideration the approved procurement policy. The
Resident Services SOP will be completed by August 31,
1998.
The actions the Authority is planning or has taken should
OIG Evaluation of correct most of the conditions cited in the finding. However,
Auditee Comments the Authority should also obtain HUD’s approval for the two
laptop computers that it plans to maintain in the Resident
Services Department since that purpose was not previously
approved by HUD for the 1995 Drug Elimination Program
grant.
Recommendations We recommend that the Director, Office of Public Housing,
Illinois State Office, assure that the Peoria Housing Authority:
1A.Develops a plan and obtains HUD approval for the
program-related utilization of the six laptop
computers purchased with Fiscal Year 1995 Drug
Elimination Program grant funds.
1B. Establishes a computer lab at Harrison Homes and
utilizes the three remaining desk top computers
purchased with Fiscal Year 1996 Drug Elimination
Program grant funds for the computer lab.
1C. Develops procedures to ensure that adequate planning
and coordination is performed prior to the purchase of
equipment or services with Drug Elimination Program
98-CH-209-1001 Page 8
Finding
grant funds in order for purchases to have an
immediate benefit.
Page 9 98-CH-209-1001
Finding
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98-CH-209-1001 Page 10
Management Controls
In planning and performing our audit, we considered the management controls relating to the
management of the Peoria Housing Authority’s Drug Elimination Program in order to determine
our auditing procedures and not to provide assurance on management controls. Management
controls consist of the plan of organization, methods, and procedures adopted by management to
ensure that its goals are met. Management controls include the processes for planning,
organizing, directing, and controlling program operations. They include the systems for
measuring, reporting, and monitoring program performance adopted by management.
We determined the following management controls were
Relevant Management
relevant to our audit objectives:
Controls
· Program Operations - The policies and procedures that
management has implemented to reasonably ensure that
a program meets its objectives.
· Validity and Reliability of Data - The policies and
procedures that management has implemented to
reasonably ensure that valid and reliable data are
obtained, maintained, and fairly disclosed in reports.
· Compliance with Laws and Regulations - The policies and
procedures that management has implemented to
reasonably ensure that resource use is consistent with
laws and regulations.
· Safeguarding Resources - The policies and procedures
that management has implemented to reasonably ensure
that resources are safeguarded against waste, loss and
misuse.
We assessed all the relevant controls identified above.
It is a significant weakness if management controls do not
provide reasonable assurance that the process for planning,
organizing, directing, and controlling program operations will
meet an organizations objectives.
Page 11 98-CH-209-1001
Internal Controls
Based on our review, we believe the following items are
Significant Weaknesses significant weaknesses:
Program Objectives The Authority used $28,548 of Drug
Elimination Program grant funds for computer equipment that
was not used for their intended purposes. The Authority did
not ensure that proper planning and coordination was
performed prior to purchasing the computer equipment (see
Finding).
98-CH-209-1001 Page 12
Follow Up On Prior Audits
We issued a prior audit report on the Peoria Housing Authority on September 7, 1995 (Audit
Report No. 95-CH-202-1011). This report was a comprehensive review of the Authority’s public
housing program activities. The report contained 5 findings. None of the findings related to this
report.
Page 13 98-CH-209-1001
Follow Up On Prior Audits
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98-CH-209-1001 Page 14
Appendix A
Auditee Comments
March 30, 1998
Mr. Richard Urbanowski, Senior Auditor
Department of Housing and Urban Development
Office of Inspector General
77 W. Jackson Blvd., Suite 2646
Chicago, IL 60604-3507
Re: Office of Inspector General Finding
Audit of Drug Elimination Grant Programs
Dear Mr. Urbanowski,
In response to your finding that the Peoria Housing Authority never provided the six laptop
computers to the Peoria Police Department and utilized only three of the nine desktop computers
for resident training: We are in agreement.
The six laptop computers were purchased as stated but they were not distributed to the Peoria
Police Department's Foot Patrol as planned.
Four of the six laptops were not being used on a regular basis. Three were used periodically by
our MIS Department for staff training. Two laptops were being used continuously by Resident
Services personnel to prepare Drug Elimination Program correspondence.
On August 27, 1997, this Housing Authority did purchase nine desktop computers and related
equipment for $14,148.00 using Fiscal Year 1996 Drug Elimination Program grant funds as stated
in the audit review. The subject computers were received on September 5, 1997 for resident
training in computer labs to be established at this Housing Authority's three family developments.
Lack of secure space was a major hold up in establishing the computer labs. As of February 28,
1998, three computers were set up and the Taft Homes computer lab was established. The fourth
computer is located in the Resident Services department and is utilized by department personnel.
This computer is used to produce and store all Drug Elimination data, correspondence, budget
figures, notifications and reports.
RECOMMENDATIONS:
1A. Develops a plan and obtains HUD approval for the program-related utilization of the six
laptop computers purchased with Fiscal Year 1995 Drug Elimination Program grant
funds.
The Director of Resident Services will construct an effective plan for four of the laptop
computers. The plan will determine whether the Police Department has a need for utilization of
Page 15 98-CH-209-1001
Auditee Comments
the laptops, whether the agency will seek approval from HUD to transfer the laptops to the
Housing Authority's conventional equipment, or whether the laptops should be utilized in the
computer centers for additional resident training, This plan should be completed no later than May
30, 1998. Two of the six laptops will remain with the Resident Services department for continued
usage of the Drug Elimination Grant program administration. This will also be outlined in detail
in the developed plan.
IB. Establishes computer labs at the Authority's two remaining family developments and
utilizes the six remaining desk top computers purchased with Fiscal Year 1996 Drug
Elimination Program grant funds for the computer labs.
The computer lab in the Warner Homes was set up on March 13, 1998. The lab for Harrison
Homes is scheduled to be operational by May 31, 1998. Each computer lab will contain three
computers to total out the remaining six. These will be the computers purchased through Drug
Elimination grant funds along with accessories.
1C. Develops procedures to ensure that adequate planning and coordination is performed prior
to the purchase of equipment or services with Drug Elimination Program grant funds in
order for purchases to have an immediate benefit.
The recommendation to develop procedures that ensures adequate planning and coordination of
services and equipment will be included in the Resident Services Standard Operating Procedures
Manual. We will also take into consideration the approved procurement policy. The Resident
Services SOP will be completed by August 31, 1998.
Any questions or comments can be directed to Ivan Williams at (309) 677-7328.
Sincerely,
Roger John, Executive Director
98-CH-209-1001 Page 16
Appendix B
Distribution
Acting Secretary's Representative, Midwest
Director of Public Housing, Illinois State Office (2)
Director of Field Accounting, Midwest
Deputy Secretary, SD (Room 10100)
Assistant Secretary for Congressional and Intergovernmental Relations, J (Room 10120)
Deputy Assistant Secretary for Public Affairs, W (Room 10220)
Chief of Staff, S (Room 10000)
Counselor to the Secretary, S (Room 10234)
Senior Advisor to the Secretary for Communications and Policy, S (Room 10222)
Field Comptroller, Midwest
Assistant General Counsel, Midwest
Assistant to the Deputy Secretary for Field Management, SDF (Room 7106)
Director of Administrative Service Center, New York State Office
Assistant Secretary for Public and Indian Housing, P (Room 4100)
Comptroller/Audit Liaison Officer for Public and Indian Housing, PF (Room 5156) (3)
Assistant to the Secretary for Labor Relations, (Acting), SL (Room 7118)
Acquisitions Librarian, Library, AS (Room 8141)
Chief Financial Officer, F (Room 10164) (2)
Deputy Chief Financial Officer for Finance, FF (Room 10164) (2)
General Counsel, C (Room 10214)
Associate General Counsel, Office of Assisted Housing and Community Development,
CD (Room 8162)
Director, Housing and Community Development Issue Area, U.S. GAO, 441 G Street N.W.,
Room 2474, Washington DC 20548
The Honorable John Glenn, Ranking Member, Committee on Governmental Affairs,
United States Senate, Washington DC 20515-4305
The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs,
United States Senate, Washington DC 20515-4305
Mr. Pete Sessions, Government Reform and Oversight Committee, Congress of the United States,
House of Representatives, Washington, DC 20510-6250
Ms. Cindy Sprunger, Subcommittee on General Oversight and Investigations, Room 212,
O'Neil Office Building, Washington DC 20515
Executive Director, Peoria Housing Authority
Page 17 98-CH-209-1001
Peoria HA, Peoria, IL
Published by the Department of Housing and Urban Development, Office of Inspector General on 1998-04-22.
Below is a raw (and likely hideous) rendition of the original report. (PDF)