Examination of Allegations Concerning the Chicago Housing Authority

RCED-83-144: Published: Apr 28, 1983. Publicly Released: Apr 28, 1983.

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In response to a congressional request, GAO examined three allegations concerning the Chicago Housing Authority's: (1) limiting competition in insurance contracting; (2) paying unnecessary or excessive amounts for garbage removal; and (3) not receiving full value for modernization expenditures.

GAO found that the authority limited the number of bidders when it obtained insurance bids. Further, until February 1983, the authority did not develop insurance specifications needed to encourage more price competition which may have resulted in its paying higher insurance rates than necessary. GAO found that the authority obtains available city garbage services and is improving its garbage contract management. However, the authority may not have always secured the low bidder for scavenger service due to inaccurate volume estimates. The authority had also not attempted to recoup potential overpayments to scavengers resulting from erroneous volume counts. Finally, GAO found that the authority has received over $138 million in modernization funds since 1968, of which it has spent $95 million. GAO could not readily verify that the modernization improvements were made because the authority's recordkeeping made it difficult to trace the receipt and use of goods and services. The modernization improvements were for items which were dispersed throughout the authority's projects and, in some cases, the improvements had already been vandalized.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Housing and Urban Development should monitor the Chicago Housing Authority's efforts to overcome the garbage volume count problem and ensure that the authority develops an acceptable method for recouping any identified overpayments.

    Agency Affected: Department of Housing and Urban Development

 

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