Public Housing:

Problems Continue To Plague the Cuyahoga Metropolitan Housing Authority

RCED-88-122: Published: Apr 20, 1988. Publicly Released: Jun 14, 1988.

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In response to a congressional request, GAO reviewed the Cuyahoga Metropolitan Housing Authority's (CMHA) operations, focusing on: (1) previously identified CMHA problems; (2) its controls over the expenditure of federal housing funds; and (3) problems in its administration of the Department of Housing and Urban Development's (HUD) Section 8 Moderate Rehabilitation Program.

GAO analyzed eight reports issued since 1982 on CMHA operations, and found that CMHA: (1) had significant long-standing management problems in finance and accounting, purchasing and inventory control, and maintenance and custodial services; (2) failed to maintain adequate internal controls over expenditures of federal funds; (3) did not comply with HUD program regulations regarding contract payments; (4) awarded 12 consultant or architectural/engineering contracts valued at $742,881 without HUD approval; (5) did not follow its own procedures in 34 payments totalling $267,000; and (6) made eight payments totalling $45,542 without invoices. GAO also found that, under the Section 8 Moderate Rehabilitation Program, CMHA: (1) overpaid landlords an estimated $245,000 due to erroneous calculations by its staff; (2) failed to discover landlords' misrepresentations of purchase and repair costs; and (3) cancelled three housing contracts, improperly paying $15,144 in rent subsidies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: CMHA developed a revised corrective action plan. HUD also approved a CMHA request for consulting services to provide a comprehensive financial procedures manual and an evaluation of the staffing needs of the finance department. HUD has analyzed CMHA actions on 31 findings concerning its Section 8 Moderate Rehabilitation Program. HUD/IG will continue followup.

    Recommendation: The Secretary of Housing and Urban Development should require that CMHA develop a plan, with specific time frames, to implement an effective system of internal controls and to correct the management problems that have been found in virtually all areas of its operations, including its administration of the Section 8 Moderate Rehabilitation Program. In developing this plan, CMHA should use recent audits and reviews issued on CMHA operations to help identify significant problem areas and actions needed to overcome the problems identified in these reports.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Implemented

    Comments: An audit advisory committee has been convened for the purpose of ensuring that identified problem areas are appropriately addressed within specific time frames. HUD will continue to monitor CMHA in accordance with revised HUD policy.

    Recommendation: The Secretary of Housing and Urban Development should review the plan that CMHA develops to ensure that it appropriately addresses the identified problems, and monitor CMHA progress in implementing its plan.

    Agency Affected: Department of Housing and Urban Development

 

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