On September 29, HUD’s Office of Inspector General issued a report titled “HUD’s Oversight of Legal Costs at Moving to Work Housing Agencies.” The report found that HUD’s oversight was not adequate to ensure that legal costs spent by MTW agencies were reasonable and necessary. OIG audited HUD on this topic due to congressional concerns, concerns from a previous external audit, and OIG’s initiative to focus HUD management’s attention on problem areas on which we and others have reported over the years.
According to the report, which audited 3 MTW agencies, payments for outside legal services paid for by the MTW agencies were not always in compliance with applicable requirements. The report claims that $9.2 million of the $16.5 million that the three agencies paid for outside legal services during the period October 2007 to September 2012 could be unsupported. The report notes that MTW agencies typically incur relatively higher costs for legal services than non MTW agencies.
OIG recommends HUD require MTW agencies to include a breakdown of their anticipated and actual costs for legal services in their annual plans and report.