Federal Reports

We audited the Charlottesville Redevelopment and Housing Authority’s use of public housing operating and capital funds because (1) we received a hotline complaint alleging that the Authority mismanaged its procurement activities and improperly awarded an internet services contract for more than $200,000 without receiving competitive bids and (2) we had never audited the Authority. Our audit objective was to determine whether the Authority procured products and services using U.S. Department of Housing and Urban Development (HUD) operating and capital funds in accordance with applicable procurement requirements.Although the allegation that the Authority improperly awarded an internet services contract for more than $200,000 without receiving competitive bids had no merit, the allegation that the Authority mismanaged its procurement activities had merit. The Authority did not follow procurement requirements for acquiring products and services totaling $728,516 using operating and capital funds. It also did not execute appropriate written agreements for some services it received. These conditions occurred because the Authority (1) lacked controls to ensure that it complied with Federal, HUD, and State procurement requirements and its own procurement policy and (2) misinterpreted Federal procurement requirements. As a result, HUD lacked assurance that the Authority purchased products and services totaling $728,516 at fair and reasonable prices.We recommend that the Director of HUD’s Richmond Office of Public Housing require the Authority to (1) provide documentation to show that it purchased products and services totaling $728,516 at fair and reasonable prices or reimburse either its Public Housing Operating or Capital Fund from non-Federal funds for any amounts that it cannot support, (2) provide documentation to show that it had contracts for dumpster rentals and pest control services or reprocure these services, (3) obtain written agreements with the originating public bodies for its ongoing awards procured through intergovernmental agreements or reprocure these services, and (4) develop and implement controls to ensure that it complies with all applicable procurement requirements. We also recommend that the Director of HUD’s Richmond Office of Public Housing provide technical assistance to the Authority to ensure that it understands Federal procurement requirements, including the proper use of intergovernmental agreements.

We audited PK Management, LLC, based on (1) media coverage of problems associated with Essex Village, an apartment complex in Virginia that it managed, and (2) issues identified in our prior audit of PK Management in Birmingham, AL. Our audit objective was to determine whether PK Management assisted eligible tenants and maintained documentation to support the housing assistance payments it received for residents of the properties it managed in the Philadelphia region.PK Management did not always maintain documentation to show that it assisted eligible tenants and supported the housing assistance payments it received for residents in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. Specifically, it did not maintain eligibility documentation in 23 of the 60 tenant files reviewed. In addition, PK Management did not always maintain other required documentation to support compliance in 27 of the 60 tenant files. These conditions occurred because PK Management did not have adequate controls to ensure that it maintained documentation to show that tenants were eligible for assistance and that housing assistance payments were supported. As a result, HUD had no assurance that housing assistance payments totaling $497,762, which it made on behalf of the residents at properties managed by PK Management, were correct and accurate.We recommend that HUD require PK Management to (1) provide documentation to support housing assistance payments it received totaling $497,762 or reimburse HUD from nonproject funds for any amount that it cannot support and (2) implement controls to ensure that it maintains documentation in the tenant files to show that tenants were eligible for assistance and that the housing assistance payments were supported.