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HUD Paid Rental Subsidies To Benefit Public Housing and Voucher Tenants Reported as Excluded From Federal Programs or Deceased

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD to ensure that public housing agencies (PHA) have access to information in the Federal Do Not Pay system. We performed this audit because the Housing Opportunity Through Modernization Act of 2016 requires HUD to ensure that PHAs have access to information contained in the Bureau of Fiscal Services’ Do Not Pay system established by the Improper Payments Elimination and Recovery Improvement Act of 2012. Our objective was to determine whether HUD provided PHAs with access to the information contained in the Do Not Pay system.

HUD did not provide PHAs with access to the information contained in the Do Not Pay system. HUD paid an estimated $19.8 million in annual rental subsidies to PHAs to benefit 2,278 tenants who were reported in Do Not Pay as excluded from Federal programs or deceased.

We recommend that HUD (1) issue guidance to PHAs to ensure any applicant for or tenant of public or assisted housing whose name appears on the SAM excluded parties list are reviewed by PHAs to determine eligibility in a manner consistent with the regulations in 2 CFR 180 and 2424 so that ineligible applicants or tenants are not admitted or recertified to put up to $13.7 million to better use, (2) take corrective actions for the 729 tenants reported as deceased to put $6.1 million to better use, and (3) establish a method to provide information in the Do Not Pay system to PHAs.