HUD’s Office of Inspector General (OIG) audited the Housing Authority of the City of Annapolis’ Resident Opportunities and Self-Sufficiency (ROSS) program due to a hotline complaint. The complaint alleged that the PHA used ROSS grant funds to pay a resident who didn’t work on a grant. The audit found that the PHA didn’t always administer its ROSS program in accordance with applicable HUD requirements, and the allegation in the complaint had merit.

Specifically, the PHA didn’t maintain documentation to support program accomplishment data reported to HUD for two grants with drawdowns totaling $292,611 and salary and fringe benefit costs totaling $109,248 paid to its service coordinator for one grant. It also incurred $6,850 in ineligible costs for training that HUD hadn’t approved in advance as required for two grants and $3,400 in ineligible costs for payments to a public housing resident who didn’t perform duties related to a grant. In addition, the PHA couldn’t support in-kind service contributions from community partners totaling $243,750 as required. These conditions occurred because the PHA wasn’t aware of requirements and lacked controls over its tenant councils and service coordinators administering the program. As a result, the PHA couldn’t show that disbursements totaling $401,859 complied with program requirements, and it incurred ineligible expenses totaling $10,250.

Auditors recommended that HUD require the PHA to provide documentation to support program accomplishments related to disbursements totaling $292,611 and salary and fringe benefit costs totaling $109,248 or repay HUD from non-federal funds for any amounts that it can’t support. OIG also recommended that HUD require the PHA to repay $6,850 from non-federal funds for the ineligible training costs and $3,400 for the ineligible payments to a public housing resident. OIG further recommended that HUD require the PHA to develop and implement policies, procedures, and controls to ensure that: (1) it complies with program and financial reporting requirements; (2) tenant councils and service coordinators administering the grants comply with applicable requirements; and (3) in-kind contribution amounts are verified.

• HUD Audit 2016-PH-1006, August 2016