Feds probing $1 million in spending by "troubled" housing authority

NEW BRUNSWICK, NJ - Federal officials are probing the New Brunswick Housing Authority (NBHA) over $1 million it may have improperly spent, and are pushing the authority to turn over all documents related to those expenditures.

According to a federal report by the US Department of Housing and Urban Development (HUD), the authority failed to follow the proper procedures for purchasing goods and services, including a failure to find cheaper prices and limiting competition.

The authority also failed to meet its deadlines for approving funds and to ensure its financial reports and accounting data were accurate. The NBHA also charged thousands in excessive management fees, according to the report.

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In response to the report, NBHA Executive Director John Clarke said that any of the authority’s problems stemmed from “substantial damage” suffered under Hurricane Sandy.

Clarke concluded that the authority would take all of HUD’s recommendations seriously and ensure its staff is properly trained.

The housing inspector general described the NBHA as a “troubled public housing agency” adding that the NBHA “did not fully understand HUD’s requirements” nor have adequate controls ensure compliance with those requirements.

According to the audit, the authority disbursed more than $800,000 worth of contracts to 10 agencies, according to the report, but limited competition by creating an excessive array of hoops for other contractors to jump through in order to enter the bidding process.

“The vendor used for the authority’s roof replacement and repair project was selected without full and open competition because it was limited to vendors that had licenses to work in at least 20 state,” reads the audit. “This was an unreasonable requirement to be placed on firms.”

Another $217,403 had been spent on legal, fee accounting, management consulting and auditing services, the report says.

HUD officials are urging that the authority turn over all documents showing those purchases were reasonable, otherwise the authority should pay back the $1 million with non-federal funds.

The authority also failed to ensure that its budget, financial reports and accounting data were current and up to date, according to the report

Federal officials are recommending that the authority also provide procurement training to its staff, reimburse $87,000 in excessive management fees, improve its controls and recordkeeping and reduce any of its future capital funds.

New Brunswick Mayor James Cahill, in a written statement, said that he trusts the actons of the Housing Authority will be found to have been appropriate. 

Cahll added that there may have been a "techncal violation," stemming from the 'timely expenditure of funds," in order to install an emergency generator at a project in the wake of Hurricane Sandy, and that other fees may have been incurred from the demolition and environmental remediation of the former Hoffman Pavilion Senior Housing facility.

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