Federal Reports

We audited Vineville Christian Towers’ (project) Rental Assistance Demonstration Program (RAD) conversion in accordance with our annual audit plan. Our audit objective was to determine whether the project’s RAD conversion to the Section 8 Project-Based Voucher Program was completed in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements; specifically, whether Christian Church Homes of North California (owner) ensured that the project’s RAD conversion was accurate and supported. The owner did not ensure that the project’s RAD conversion was accurate and supported. Specifically, the owner did not ensure that (1) the converting units were for qualified tenants who received tenant protection assistance before the submission of the RAD application and had not vacated the units and (2) the RAD conversion was supported with tenant protection assistance based on an adequate housing conversion action. This condition occurred because the owner was not familiar with the requirements related to the RAD conversion and tenant protection assistance. As a result, it (1) improperly executed the Section 8 Project-Based Voucher Program housing assistance payments contract for 90 units at the project, (2) improperly received more than $485,000 in housing assistance, and (3) may have provided improper certifications to HUD on program compliance.We recommend that the Director of HUD’s Atlanta, GA, Office of Public and Indian Housing require the owner to (1) cancel the project’s contract resulting from the RAD conversion, (2) reimburse its administering public housing agency more than $485,000 from nonproject funds, and (3) develop and implement procedures and adequately train its staff to help ensure compliance with program requirements. We also recommend that HUD’s Associate General Counsel for Program Enforcement and Departmental Enforcement Center take and pursue appropriate enforcement and administrative actions against the owner.

What We Looked AtLaptop computers are an essential and widespread information technology asset at the Department of Transportation (DOT). From fiscal years 2013 to 2017, DOT purchased 5,448 laptops (costing approximately $8.6 million) using the Department’s Working Capital Fund (WCF). Federal regulations and DOT policy require that the Department ensure the appropriate and effective receipt, inspection, acceptance, and accounting for any property once it is delivered. Given the Department’s significant investment in laptop computers and the importance of strong management and oversight, we initiated this audit. Our audit objectives were to: (1) determine whether DOT is following the Office of Management and Budget’s (OMB) requirements for purchases of laptop computers; (2) assess whether DOT's policies and procedures for receipt, inspection, and acceptance of laptops are sufficient; and (3) assess whether internal controls are in place to account for the laptops in DOT’s inventory management system after acceptance. What We FoundWhile most of DOT’s Operating Administrations complied with OMB requirements for the purchase of laptop computers, we identified weaknesses in DOT’s laptop management procedures following their purchase. In particular, DOT’s current policy defining its process for managing Government equipment is outdated and does not fully address the Department’s operating environment. DOT also lacks sufficient internal controls to account for WCF-purchased laptops after acceptance, including tracking laptops once they are transferred to Operating Administrations or individual users. Based on our findings, we estimated that DOT could not account for 34.3 percent of the 5,448 laptops in the universe, representing $2.9 million in funds that could have been put to better use, as detailed in our report. Our RecommendationsWe made eight recommendations to improve the Department’s acquisition and oversight of WCF-funded laptops. OST concurred with recommendations 1, 2, 3, 4, 5, 6, and 7 and partially concurred with recommendation 8. For the partial concurrence, OST agreed to take the recommended action but did not agree with our finding that $2.9 million in funds could be put to better use.