PHA Didn't Always Ensure Units Met Housing Quality Standards

HUD’s Office of Inspector General (OIG) audited the Housing Choice Voucher program of a PHA in Fairmont, W.Va., because it received a complaint alleging that the PHA didn’t follow program requirements. The PHA administered 1,117 vouchers and received more than $5.2 million in funding for fiscal year 2016.

As of Jan. 1, 2017, HUD regulations at 24 CFR 982.405(a) require PHAs to perform unit inspections before move-in and at least biennially. The PHA must inspect the unit leased to the family before the term of the lease, at least biennially during assisted occupancy, and at other times as needed to determine whether the unit meets housing quality standards. The PHA’s program staff performs inspections of the PHA’s Housing Choice Voucher program units. The audit objectives were to determine whether the PHA ensured that its Housing Choice Voucher program units met HUD’s housing quality standards and abated housing assistance payments as required.

Auditors found that the PHA didn’t always conduct adequate inspections to ensure that its program units met housing quality standards, and it didn’t always accurately calculate housing assistance payment abatements. Of 68 program units inspected, 63 didn’t meet HUD’s housing quality standards. Further, 22 of the 63 were in material noncompliance with HUD’s standards. The PHA disbursed $27,737 in housing assistance payments and received $1,489 in administrative fees for these 22 units. OIG estimated that over the next year, if the PHA doesn’t implement adequate procedures to ensure that its program units meet housing quality standards, HUD will pay more than $1.2 million in housing assistance for units that materially fail to meet HUD’s standards.

Additionally, the PHA didn’t always accurately calculate housing assistance payment abatements for units that failed its inspections. It incorrectly calculated the abatement amount for 13 of 37 units reviewed. As a result, HUD made ineligible housing assistance payments totaling $3,822 that should have been abated, and unit owners did not receive $267 in housing assistance payments that should not have been abated.

OIG recommended that HUD require the PHA to certify, along with the owners of the 63 units cited in this finding, that the applicable housing quality standards violations have been corrected; reimburse its program $29,226 from non-federal funds for the 22 units that materially failed to meet HUD’s housing quality standards; develop and implement procedures and controls to monitor the inspection process to ensure that program units meet HUD’s standards; reimburse its program $3,822 for payments that should have been abated; and reimburse five owners $267 for excess payments that it improperly abated.

·       HUD Audit 2018-PH-1002