SPRINGFIELD – An audit performed by the Office of Inspector General (OIG) of the Department of Housing and Urban Development of the Springfield Housing Authority (SHA) brought forth issues about $37,941 in ineligible costs, $916,132 in unsupported costs, and $408,968 in unspent funds.

When asked to comment on the conclusions of the audit, which were released on March 12, SHA management in an unsigned statement to Reminder Publishing said, “As we continue to work with the OIG and Boston Field Office on this audit, SHA was very pleased with the results of the audit. It is our belief that with the continuing efforts to improve our agency and the guidance we received not only in the findings but the dialog throughout the audit, SHA will remain a trusted partner on a Federal, State and local level.”  

The audit reported, “We audited the Springfield Housing Authority’s Public Housing Operating Fund and Capital Fund programs because the Authority ranked fifth highest on our risk assessment of Massachusetts public housing agencies and is the third largest in the State. In addition, we had not audited the Authority in more than 10 years. The objective of the audit was to determine whether the Authority complied with procurement and contract administration requirements for its Public Housing Operating Fund and Capital Fund programs. What we found is Authority officials did not always comply with Federal procurement requirements for its Public Housing Operating Fund and Capital Fund programs.

“Authority officials did not always comply with Federal procurement requirements and their own procurement policy. Specifically, they did not always adequately perform and document procurement, and contract terms were not always consistent with other procurement documents. In addition, Authority officials did not always comply with contract administration requirements. Specifically, they did not always ensure that (1) contract amounts were not exceeded, (2) change orders were approved in a timely manner, and (3) completion documents were submitted as required. These conditions occurred because Authority officials did not always follow their procurement policies and were not always aware of Federal procurement requirements due to a lack of training. Further, the Authority had inadequate controls to ensure that it adequately documented the history of the procurements and did not exceed contract amounts. As a result, the Authority incurred $37,941 in ineligible costs, $916,132 in unsupported costs, and $408,968 in unspent funds that may need to be reallocated.

“We recommend that the Director of the U.S. Department of Housing and Urban Development’s Boston Office of Public Housing require Authority officials to (1) repay from non-Federal funds the $37,941 in ineligible costs, (2) support that $916,132 spent on contracts was fair and reasonable or repay the funds, (3) support that $408,968 in funds not yet spent on contracts was fair and reasonable or reallocate the funds, (4) establish and implement adequate record-keeping procedures to comply with Federal procurement requirements, and (5) establish and implement adequate controls so the Authority does not exceed the contract amount without appropriate contract amendments and approvals.”

The written response from the SHA continued, “As the third largest Housing Authority in the State of Massachusetts, SHA was chosen for a routine Audit from the Office of Inspector General (OIG) underneath the Department of Housing and Urban Development. SHA has not received an audit in over 10 years and given the number of residents the SHA supports annually we appreciated the opportunity to work the OIG’s office and ensure our compliance within the many facets of our programs. With an annual budget of over 35 million dollars, SHA poses a high level of risk within the State’s budget and audits like these allow taxpayers assurances that procured funds are being allocated properly.

“The audit process began in May of 2019 and SHA worked closely with both the OIG’s office as well as the Housing and Urban Development, Boston Field Office to provide information around contract administration requirements for its Public Housing Operating Fund and Capital Fund programs. As audits can be a challenging undertaking all parties exhibited a great level of trust and transparency throughout the process, which allowed the OIG’s office to provide recommendations and areas of improvement to SHA.

“OIG’s audit resulted in two findings for the agency to respond to. The first finding dealt with our Capital Fund program and the need to provide further documentation to show the compliance of Federal requirements on contract procurement and administration. SHA acknowledges that procurement of this funding is essential to its operation and recognized the need for on-going training to ensure a better level of compliance with the evolving processes. Training for these programs has already taken place and will continue to as changes occur.

“Finding number two, was centered around existing contracts within the agencies Operating Fund. Vendors are expected to perform work under the specific terms of the contract, it is the agencies role to address any change orders or deviations from the agreed upon contract. Vendors often perform additional services to assist the agency in other capacities, the agency needs to have improved tracking for when those services are billed and ensure that they are separated from the original scope of work that they were contracted for. SHA has improved its internal purchasing protocols, which will allow for better management when vendors are providing multiple layers of work.

“SHA had been working on agency wide upgrades prior to the audit from the OIG. Modernization of our internal software programs has been a large component of these upgrades. As we work to enhance our software capabilities and our purchasing protocols, we are confident that we are meeting the concerns of the findings addressed by the OIG.”