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Auditors: Fort Smith housing office misspent $500K
Associated Press
November 16, 2008
FORT SMITH, Ark. (AP) - The federal government says a Fort Smith public housing agency bought land that cannot be used for housing and misspent $400,000 by hiring a contractor without going through the competitive bidding process.
The Office of Inspector General performed the audit at the request of the federal Department of Housing and Urban Development. A HUD spokeswoman says a determination on the audit findings has not been made yet. She says HUD will work over the next two months with the Fort Smith Housing Authority on a plan to resolve any issues.
The audit says the Fort Smith Housing Authority wrongly pledged restricted assets as guarantees on two loans totaling nearly $2 million and that the agency spent more than $104,000 to buy land that was not zoned for housing. Auditors also found the Fort Smith agency misspent $400,000 in hiring a contractor without competitive bidding and not requiring the contractor to put up a bond equal to the contract amount.
Ken Pyle, the authority's executive director, said the authority was preparing arguments to present to HUD. He says much of the disagreement was a misunderstanding. He agreed, though, that federal procurement regulations were not followed in obtaining architectural and legal services. He said the housing authority will repay $26,048. The authority also agreed to repay $4,400 spent on background checks on people who were not public-housing tenants.
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