Federal Reports

We audited the Newark Housing Authority’s Housing Choice Voucher Program. We selected the Authority for review because the U.S. Department of Housing and Urban Development (HUD) authorized more than $111 million in program funding for its Housing Choice Voucher Program in fiscal years 2016 and 2017 and based on our risk analysis of public housing agencies located in the State of New Jersey. The objective of the audit was to determine whether the Authority ensured that its program units met HUD’s housing quality standards and whether it abated housing assistance payments when required.We found that the Authority did not ensure that its program units met housing quality standards, and it did not accurately calculate housing assistance payment abatements. Of 29 program units inspected, 25 did not meet HUD’s housing quality standards, and 23 of those units materially failed to meet HUD’s standards. Further, the Authority incorrectly calculated the abatement amount for 4 of the 20 abated units reviewed. These conditions occurred because the Authority’s inspectors did not apply their housing quality standards training to thoroughly inspect units and it did not have adequate controls over the calculation of abatements. As a result, the Authority disbursed $110,943 in housing assistance payments for units that materially failed to meet HUD’s housing quality standards and paid its contractor $708 in fees to inspect these units. Additionally, it disbursed $4,459 for housing assistance payments that should have been abated. Unless the Authority improves its inspection program and controls over the calculation of abatements, it will continue to pay housing assistance for units that materially fail to meet housing quality standards. Further, its program participants will continue to be subjected to unsafe living conditions.We recommend that HUD require the Authority to (1) certify, along with the owners of the 25 units cited in the finding, that the applicable housing quality standards violations have been corrected; (2) reimburse its program $111,651 for the 23 units that materially failed to meet housing quality standards; (3) improve controls over its inspection program; (4) reimburse its program $4,459 for housing assistance payments that were not properly abated; and (5) improve controls over the calculation of abatements.

TFC Consulting, Inc. (TFC), an independent licensed Certified Public Accounting firm, wascontracted by the Department of Agriculture (USDA), Office of Inspector General (OIG) toconduct an agreed-upon procedures engagement at Illinois and provide the Food and NutritionService (FNS) with recommendations to enhance program efficiency and effectiveness.

TFC Consulting, Inc. (TFC), an independent licensed Certified Public Accounting firm, was contracted by the Department of Agriculture (USDA), Office of Inspector General (OIG) to conduct an agreed-upon procedures engagement (AUP) to assess aspects of five selected States’ compliance with the Supplemental Nutrition Assistance Program (SNAP) regulations. TFC was also responsible for providing the Food and Nutrition Service (FNS) with recommendations to enhance program efficiency and effectiveness.

OIG reviewed how USDA awards contracts to small and disadvantagedbusinesses to ensure only eligible businesses receive contracts.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for civil projects and coal combustion residual program management work at TVA's steam electric power plants. Our examination objective was to determine if the company's cost proposal was fairly stated for a planned <br> $50 million contract.In our opinion, the company's cost proposal was overstated. Specifically, we found the company proposed:Unit rates for a Bull Run Fossil Plant (BRF) project included overstated (1) equipment costs, (2) material costs, (3) indirect costs, and (4) labor costs. In addition, the BRF proposal contained various calculation errors that understated some of the company's costs.</li> Costs for a Cumberland Fossil Plant (CUF) project included (1) overstated subcontractor costs, (2) a fee rate that exceeded the maximum allowable fee rate in TVA's request for proposal, and (3) understated labor costs.</li>Costs for a Paradise Fossil Plant (PAF) project included (1) overstated noncraft labor costs; (2) overstated labor burden markup rates (payroll taxes, insurance, and fringe benefits); and (3) excessive fee.</li>Rate attachments (1) included incorrect craft labor rates, (2) did not include some of the craft labor classifications the company used in the BRF proposal, (3) included noncraft wage ranges that did not reflect the company's current wage ranges, and (4) did not include an information technology markup rate that the company included in its proposals for the PAF and CUF projects.</li>We estimated TVA could avoid about $17.63 million on the planned $50 million contract by negotiating appropriate reductions to (1) unit rates in the BRF proposal; <br> (2) subcontractor, fee, and labor costs in the CUF proposal; and (3) labor costs, labor burden markup rates, and fee in the PAF proposal. In addition, we suggest TVA negotiate revisions to the company's contract rate attachments to correct errors and more accurately reflect the company's actual wage ranges.(Summary Only)