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We audited the Detroit Housing Commission’s Moderate Rehabilitation program based on concerns regarding the conditions of the housing units and the results of our prior audit of the Commission’s former projects.  The audit was part of the activities in our fiscal year 2018 annual audit plan.  Our audit objective was to determine whether the Commission administered its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.

The Commission did not always administer its program in accordance with HUD’s and its own requirements.  Specifically, it did not (1) correctly calculate and pay housing assistance for its program households, (2) obtain and maintain required eligibility documentation, (3) appropriately update contract rents, and (4) always enforce HUD’s housing quality standards.  As a result, the Commission overpaid more than $47,000 and underpaid nearly $25,000 in housing assistance and utility allowance reimbursements.  In addition, it paid more than $85,000 in unsupported housing assistance.

We recommend that the Director of HUD’s Detroit Office of Public Housing require the Commission to (1) reimburse its program more than $23,000 from non-Federal funds; (2) reimburse the households or projects nearly $25,000 from non-Federal funds for the underpayment of housing assistance and utility allowances; (3) support or reimburse its program, households, or projects more than $85,000 for unsupported housing assistance payments; (4) pursue collection or reimburse its program nearly $24,000 from non-Federal funds for the overpayment of housing assistance; and (5) implement adequate quality control procedures to correct the findings cited in this audit report.