Audit 319872

Criteria - Per 24 CFR §85.36, grantees and sub-grantees of the Public Housing Operating Fund (Assistance Listing No. 14.850) will maintain a written code of standards of conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee of sub-grantee shall participate in selection, of in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when any of the following has a financial or other interest in the firm selected for award: • An employee, officer of agent. • Any member of his or her immediate family, • His or her partner, or • An organization which employs, or is about to employ, any of the above. Condition - The Authority procured legal services from a law firm that is owned by the brother of the Executive Director. Additionally, the Authority has not issued a request for proposal (RFP) for legal services since September 2010. Cause - The Authority was unaware of the conflict of interest as the relationship between the Authority and the firm pre-dated the Executive Directors tenure with the Authority. Additionally, the firm was kept on a year to year contract with no formal RFP issued after the initial 5 year contract expired in 2016. Effect - The Authority was not in compliance with regulations or its own procurement policy. Additionally, the identified conditions may have resulted in the potential for higher legal costs due to a lack of competitive bidding. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs - We have identified known questioned costs related to the referenced purchases charged directly to the Public Housing Operating Fund totaling $22,150 during the year ended December 31, 2023. Authority-wide payments totaled $47,055 during the year ended December 31, 2023. Recommendation - We recommend that the Authority review and terminate the contract with the law firm having the conflict of interest, issue an immediate RFP for legal services to ensure compliance with HUD regulations, and develop a procurement schedule to periodically solicit competitive proposals for all professional services. Management's Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - The Authority self-reported the issue to HUD and has taken steps to correct the issue before the date of the Independent Auditors' Report. The Authority issued an RFP for legal services and has notified the firm referred to in the finding that they will not be eligible for procured services moving forward. ( c) Planned implementation date of corrective action - Completed by December 31, 2024.

Criteria - Per 24 CFR §85.36, grantees and sub-grantees of the Public Housing Operating Fund (Assistance Listing No. 14.850) will maintain a written code of standards of conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee of sub-grantee shall participate in selection, of in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when any of the following has a financial or other interest in the firm selected for award: • An employee, officer of agent. • Any member of his or her immediate family, • His or her partner, or • An organization which employs, or is about to employ, any of the above. Condition - The Authority procured legal services from a law firm that is owned by the brother of the Executive Director. Additionally, the Authority has not issued a request for proposal (RFP) for legal services since September 2010. Cause - The Authority was unaware of the conflict of interest as the relationship between the Authority and the firm pre-dated the Executive Directors tenure with the Authority. Additionally, the firm was kept on a year to year contract with no formal RFP issued after the initial 5 year contract expired in 2016. Effect - The Authority was not in compliance with regulations or its own procurement policy. Additionally, the identified conditions may have resulted in the potential for higher legal costs due to a lack of competitive bidding. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs - We have identified known questioned costs related to the referenced purchases charged directly to the Public Housing Operating Fund totaling $22,150 during the year ended December 31, 2023. Authority-wide payments totaled $47,055 during the year ended December 31, 2023. Recommendation - We recommend that the Authority review and terminate the contract with the law firm having the conflict of interest, issue an immediate RFP for legal services to ensure compliance with HUD regulations, and develop a procurement schedule to periodically solicit competitive proposals for all professional services. Management's Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - The Authority self-reported the issue to HUD and has taken steps to correct the issue before the date of the Independent Auditors' Report. The Authority issued an RFP for legal services and has notified the firm referred to in the finding that they will not be eligible for procured services moving forward. ( c) Planned implementation date of corrective action - Completed by December 31, 2024.