The report was released by Gerald Kirkland, regional inspector general for audit, who said a review of the authority’s records revealed that the authority “did not exercise adequate oversight and allowed ineligible and unsupported costs.”
The main purpose of the audit was to determine whether the authority “(1) properly collected, deposited and recorded its low-rent rental receipts; (2) had adequate controls over its credit cards: and (3) made additional or improper payroll payments.”
“We also reviewed board oversight and expanded our testing to cover other high-risk disbursements,” Kirkland’s report stated.
According to the report, the study covered records at the BHA’s administrative offices in Beeville and at OIG offices in Houston and Fort Worth between Dec. 3, 2012, and April 30, 2014.
The review covered a period from March 31, 2012, to Sept. 30, 2013.
According to the “Results of Review” portion of the report, the auditors found that the BHA did not properly oversee its rental income, mismanaged its fuel cards and vehicles, made payments in violation of conflict-of-interest requirements, paid for ineligible advertising costs, paid its executive director unsupported compensation, lacked support for an executive director pay increase, reimbursed the executive director for unnecessary, ineligible and unsupported costs, improperly used its other credit cards, lacked support for a commissioner’s travel and did not hold regular board of commissioners’ meetings.
The report indicated that audit showed that $31,351 in ineligible payments, $42,508 in unsupported payments and $1,724 in unnecessary payments were made.
What is needed
Recommendations made by the OIG were for the director of the San Antonio Office of Public Housing to require the BHA to:
1A. Implement internal controls, policies and procedures for rental income, including requiring monthly reconciliations.
1B. Either support or repay $24,821 from non-federal funds for unsupported fuel charges.
1C. Implement a policy for its credit cards that includes restricting access, requires a review of charges by an appropriate manager or board member and provide for actions to be taken against employees who violate the policy.
1D. Implement a vehicle-use policy that (1) includes provisions for tracking mileage for each vehicle, determining the extent of employee personal use of authority vehicles based upon the benefit obtained by the authority.
1E. Determine whether the executive director should use an authority-provided vehicle for authority business or have her track the use of her personal vehicle for business use to support mileage reimbursements.
1F. Update its personnel policy to include prohibiting conflicts of interest in housing assistance payments contracts.
1G. Repay from non-federal funds $17,097 paid for ineligible housing assistance payments made in violation of housing assistance payments contract’s conflict-of-interest requirements.
1H. Adopt a policy that ensures that only allowable costs are charged to its federal programs with federal requirements.
1I. Support or repay from non-federal funds $9,313 paid for ineligible advertising costs.
1J. Support or repay from non-federal funds $8,721 in unsupported vacation payments.
1K. Support or repay from non-federal funds $6,895 in unsupported vacation payments.
1L. Repay from non-federal funds $4,321 paid for ineligible credit card purchases.
1M. Repay from non-federal funds $1,724 paid for unnecessary costs paid for mileage.
1N. Support or repay from non-federal funds $1,682 paid to its executive director for unsupported costs.
1O. Repay from non-federal funds $620 paid to the executive director for ineligible costs.
1P. Support or repay from non-federal funds $389 paid for a commissioner’s unsupported travel.
1Q. Update its personnel policy to comply with State of Texas requirements for commissioners’ travel, including requiring supporting documentation for travel.
1R. Hold regular board meetings and provide adequate oversight of the authority’s operations.
1S. Consult with the mayor of Beeville and evaluate the board of commissioners, determine its effectiveness and remove and replace commissioners as appropriate.
Solving the problems
The report also indicated that the executive director, Viola Salazar Maldonado, has agreed to take the following steps to correct the problems mentioned in the report:
Comment 1: The executive director agreed to adopt new policies to address many of the issues identified in the memorandum. We acknowledge these actions. However, the executive director needs to obtain board approval of any new policies, and the board needs to appropriately exercise its oversight authority to prevent issues from reoccurring.
Comment 2: The executive director requested additional time to respond to the conflict of interest issues. HUD will provide the authority time to respond to this issue after issuance of the final memorandum.
Comment 3: The executive director admitted to paying herself for her vacation without board approval because the authority has a policy allowing such payments. Further, she said she was not trying to circumvent the board’s oversight. However, the authority’s personnel policy stated that the board shall establish the salary of the executive director, and it allowed payment of vacation days upon written request by the eligible employee. By directing the bookkeeper to issue her checks and not making a request seeking board approval, the executive director did circumvent the board’s oversight.
Comment 4: The executive director stated she was paid amounts approved by the board. The board approved the authority’s budgets, but the budget may not have clearly detailed she was receiving a pay increase. Further, the executive director received additional and retroactive payments not in accordance with the authority’s policy or as approved by the board.
Comment 5: The executive director provided receipts for the commissioner’s lodging and a handwritten note for mileage. As a result, we reduced the amount in the memorandum accordingly. The note lacked support for meals, taxis and parking costs. As the State of Texas requires commissioners to be paid for expenses “as long as such expenses are supported by adequate evidence of actual money expended,” the amount in the memorandum is unsupported. We did not include the information provided as support as it contained personal identification information.
Comment 6: The executive director indicated that a search for new board commissioners was underway. Further, the mayor indicated that two commissioners had resigned, and two whose terms had ended would not be reappointed. He further stated that he was taking action to have a responsible board appointed. We acknowledge their comments; however, the new board needs to hold regular meetings to provide adequate oversight. The mayor also provided resignation letters from two board commissioners and termination letters for two additional board commissioners. We did not include them in the memorandum, but they are available upon request.
The Bee-Picayune was able to contact Mrs. Maldonado, but she was unable to comment on the report by press time Friday morning.
She was assured that she would have an opportunity to respond and that a follow-up article would be printed at a later date.
An attempt was made to contact Mayor David Carabajal, but he could not be reached by press time Friday.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 343-5220, or at reporter@mySouTex.com.