Fall River Housing Authority

This is a state performance audit of the Fall River Housing Authority covering July 1, 2010 through June 30, 2012.

“In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, the Office of the State Auditor has conducted an audit of certain activities of the Fall River Housing Authority for the period July 1, 2010 through June 30, 2012.”

Auditors checked whether the housing authority had good controls over purchasing and whether it followed state housing procurement rules.

“The objectives of our audit were to review and analyze the Authority’s internal controls over its procurement of goods and services, including those for the modernization/renovation of its housing units, and to determine whether its procurement activities were efficient and in compliance with the Department of Housing and Community Development’s (DHCD’s) procurement guidelines and laws, rules, and regulations applicable to state-aided housing programs.”

The report matters because some employees had conflicts involving contractors, even though auditors did not find those problems to be widespread.

“The ethical violations involved relationships between Authority employees and contractors awarded procurements and were breaches of the Authority’s Procurement Policy, its Code of Ethics, and (since some of the procurements were paid from federal funds) 24 Code of Federal Regulations (CFR) 85.36(b)(3).”

The overall audit conclusion was clean for the areas reviewed: the authority’s purchasing controls were adequate and its procurements followed applicable rules.

“Based on our audit, we have concluded that, for the period July 1, 2010 through June 30, 2012, the Authority maintained adequate internal controls in the areas reviewed and conducted its procurements in an efficient manner in compliance with DHCD guidelines and laws, rules, and regulations applicable to state-aided housing programs.”

After the conflict-of-interest issues, the authority disciplined employees, barred contractors, added ethics and procurement controls, and sent HUD a corrective action plan.

“The Authority sent the CAP (which was basically a restatement of the corrective actions noted above) to HUD.”

The audit covered a large amount of spending, and the report says the ethics problems appeared isolated rather than systemic.

“During our audit period (July 1, 2010 through June 30, 2012), the Authority disbursed over $4.7 million for non-payroll expenses and over $13.5 million for modernization costs in its state projects.”

“Procurement” means buying goods and services. “Internal controls” means rules and checks meant to prevent mistakes, favoritism, or misuse of money. “DHCD” was the state agency overseeing housing programs and state-funded housing authorities.

“DHCD is the agency that has oversight of the Massachusetts housing and community-development programs and of state-funded housing authorities.”