Finding Text
Condition: The Authority paid $388,797 in legal expenses without obtaining approval from HUD. Criteria: Per PIH Notice 2006-9 and the HUD Litigation Handbook 1530.1 REV-5, a PHA must submit to HUD Regional Counsel for prior written concurrence any litigation service contract where the fee is expected to exceed $100,000 with a private attorney involving a PHA program, project, or activity receiving loan, grant or other subsidy assistance from HUD. Context: During our audit several of the Authority?s legal invoices were selected for testing. During the fiscal year ending March 31, 2022, four checks were issued to the Authority?s legal counsel for a sum total of $388,797. The Authority was not able to provide support for the procurement of these services and could not provide documentation where they obtained HUD approval. Cause: The Authority did not follow the requirements of PIH Notice 2006-9 and the HUD Litigation Handbook 1530.1 REV-5 and procured a contract for legal services that did not include a not to exceed amount of less than $100,000. Effect: The Authority is not in compliance with HUD rules and regulations. Questioned Costs: $388,797. Auditor Recommendations: The Authority should ensure that it has an understanding and follows all PIH Notices and HUD regulations that are applicable. Management Response: See Corrective Action Plan.