Winchendon Housing Authority's Use Of American Recovery And Reinvestment Act Funds

This is a Massachusetts State Auditor report reviewing how the Winchendon Housing Authority handled federal stimulus money from July 1, 2009 through June 30, 2010.

“In accordance with Chapter 11, Section 12, of the General Laws, we have conducted an audit of certain activities of the WHA for the period July 1, 2009 to June 30, 2010.”

Auditors checked whether the housing authority properly received, spent, tracked, and reported its federal stimulus funds and followed the rules tied to that money.

“The objectives of our audit were to conduct a review of certain federal stimulus funds received and expended by the WHA and to review the management control system for measuring, reporting, and monitoring the effectiveness of its programs and to evaluate compliance with laws, rules, and regulations applicable to the American Recovery and Reinvestment Act (ARRA).”

Federal stimulus funds come with rules meant to prevent agencies from sitting on cash, earning interest, or delaying payments after drawing money down.

“The Department of Housing and Urban Development (HUD) requires that all ARRA funds should be expended within three business days.”

For local residents, the money paid for public housing improvements: new appliances and paving and sidewalk repairs at two public housing projects.

“During our audit period, the WHA was awarded an ARRA grant for capital improvements in the amount of $232,667 for the replacement of stoves and refrigerators and paving and sidewalk repairs at its two public housing projects.”

The housing authority generally had adequate controls and followed rules in the tested areas, except for the problem with holding federal funds too long before spending them.

“Based on our review, we have concluded that, except for the matters discussed in the Audit Results section of this report, during the 12-month period ended June 30, 2010, the Authority maintained adequate management controls and complied with applicable laws, rules, and regulations for the areas tested.”

The auditor recommended that the housing authority talk to HUD about whether any interest earned on the delayed federal funds must be paid back.

“The WHA should contact HUD to discuss this matter to determine if any interest earned on the federal funds should be returned to HUD.”

The issue was not that the money was missing; it was that the authority requested it too early and kept excess federal cash for 21 and 22 business days, beyond the three-day rule.

“We found that the WHA drew down funds twice prior to making payments to its vendors; however, it did not expend the total amount of these funds for 21 and 22 days, respectively, after receiving the funds.”

A drawdown is when the housing authority requests federal money through HUD’s online system and the money is sent to its bank account.

“Once approved, LOCCS then transmits funds to an interest-bearing account at WHA’s financial institution.”