Shrewsbury Housing Authority

This is a Massachusetts State Auditor report on the Shrewsbury Housing Authority, covering selected activities and use of federal stimulus money.

“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 Authority for the period January 1, 2008 through June 30, 2010.”

The audit checked whether the housing authority had proper controls and followed laws and rules for housing operations, spending, payroll, contracts, reserves, and federal stimulus funds.

“The objectives of our audit were to review and analyze management controls and practices over the following areas and functions listed for the purpose of determining their adequacy and review compliance with laws, rules, and regulations: 1) tenant selection; 2) preparing and reoccupation of vacant units; 3) rent determinations; 4) collectability of accounts receivables; 5) site inspections; 6) payroll, travel, and fringe benefits; 7) disbursements; 8) inventory controls over property and equipment; 9) contract procurement; 10) cash management and investment practices; 11) Department of Housing and Community Development (DHCD) – approved budgets versus actual expenditures; 12) level of need for operating subsidies and operating reserves; and 13) the administration of development funds to determine, among other items, the existence of excess funds.”

The report matters because public housing agencies manage homes, public money, and federal grants, and failures in wage compliance, records, or reserves can affect accountability and financial stability.

“As a result, the Authority may not have the financial resources necessary to fund emergency situations or non-routine expenditures as they arise.”

If you live in or rely on public housing, this audit points to whether the local authority is managing money carefully enough to maintain housing and handle emergencies.

“The Authority oversees 272 public housing units, 136 state elderly units, 17 family units, 15 special needs housing units, 100 federal elderly units, and 173 subsidized program vouchers.”

The biggest findings were that the authority did not prove required wage compliance on some federally funded work, did not adequately document a management fee, had negative reserves, and withheld Medicare taxes incorrectly from one employee.

“The Executive Director stated that he did not require that prevailing wages be paid nor did he have any documentation from the contractors indicating they paid prevailing wages to their employees.”

Auditors recommended that the authority talk with HUD about the grant issues, improve future compliance and documentation, monitor budgets and reserves, and correct the Medicare tax issue.

“The Authority should discuss the issue of failing to comply with the DBA and MPWL with the source of funding for the project, the Department of Housing and Urban Development (HUD), to determine what action should be taken.”

The audit found serious control problems, but not a total breakdown: outside the listed findings, auditors said the authority generally had adequate controls and followed applicable rules in the tested areas.

“Without the proper monitoring of the budget by the Board of Directors and the Executive Director, the Authority may not be able to address emergency situations arising in the future.”

ARRA means federal stimulus money; prevailing wage means contractors on certain public projects must pay workers required wage rates; operating reserves are backup funds for cash flow, emergencies, and non-routine expenses.

“The purpose of the operating reserve is threefold.”