Taxpayer funding intended to improve rural housing developments was spent on Christmas parties, alcohol, and trips to Six Flags, according to a new audit from the U.S. Department of Agriculture’s Office of Inspector General.
The audit found that two managers of apartment complexes in Maryland operated by the Rural Rental Housing (RRH) program spent nearly $30,000 on parties.
“Based on our data analytics, we found that [two] management agents charged unallowable expenses to 11 RRH projects in 2013,” the audit said. “These unallowable expenses included charges for staff Christmas parties, summer picnics, dinners, alcoholic beverages, and gifts to their staff.”
The program’s management handbook explicitly disallows using funds for parties and alcohol.
The inspector general found misuse of taxpayer funding in all 11 projects in its sample. The $27,718.66 unallowable expenses identified included $3,912.37 for a staff summer picnic at Six Flags America in 2013; $11,411.74 for a staff Christmas party in 2012; and $12,394.55 for a staff Christmas party in 2013.
“This occurred because RHS does not have adequate controls to identify the misuse of RRH funds,” the inspector general said. “Without proper oversight of management agent expenditures, RRH funds are vulnerable to misuse.”
The inspector general said that wasting housing funds on parties and staff retreats increased rent for elderly tenants.
