HUD became aware of the financial problems of HACC when the staff of the Office of Public Housing, Pennsylvania State Office, met with representatives of HACC on October 2, 2000.  HACC requested the meeting to discuss its declining Public Housing and Section 8 reserves and a shortfall in Hope VI funds. A HUD technical review was performed in October 2000 and the results were discussed with the HACC on November 20, 2000. At that time HACC was advised to immediately stop funding the private development company with Public Housing and Section 8 funds.

We performed a nationwide audit of the Asset Control Area Program to assess the effectiveness of the Program in meeting its objective of expanded homeownership opportunities in revitalization areas. The audit included reviews at the U.S. Department of Housing and Urban Development (HUD), Single Family Housing in Headquarters, and HUD's Philadelphia and Santa Ana Homeownership Centers (HOC. Also, it included an onsite review of three Local Partners; Rochester, New York; San Bernardino, California; and Washington, D.C.

We completed an audit of the Philadelphia Regional Alliance of HUD Tenants $310,000 Outreach and Training Assistance Grant and a $20,000 Public Entity Grant (a Section 514 grant received from an Intermediary Technical Assistance Grant). The objectives of the review were to determine if the Philadelphia Regional Alliance of HUD Tenants used Section 514 grant funds for only eligible activities as identified in the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), their agreements, and/or other requirements to further the Mark-to-Market Program.

We completed an audit of the Coshocton Metropolitan Housing Authority's Public Housing Program. The review of the Housing Authority's Public Housing Program was conducted as part of a comprehensive review of the Authority. The comprehensive review was performed based upon a request from HUD's Columbus Field Office Coordinator of Public Housing Program Center.

We completed an audit of the Fayette County Housing Authority's Section 8 Housing Program. The objective of our audit was to determine whether the Housing Authority operated its Section 8 Program in an efficient and effective manner and provided decent, safe and sanitary housing to its Section 8 tenants in compliance with HUD's requirements. We performed the audit in response to a request from HUD's Public Housing Program Center Coordinator, Indianapolis Field Office.

Our review disclosed that the Family Living project has suffered serious financial problems, including a default on the HUD-insured mortgage, and had ceased being a profitable entity. These problems were caused by questionable cash distributions (withdrawals) from the project bank accounts by the Owner. We consider these distributions, totaling $455,439, to be "equity skimming" and to be in violation of applicable Federal statutes and HUD regulations.

According to the Centers for Disease Control and Prevention (CDC), lead-based paint and lead-contaminated dust are some of the most widespread and hazardous sources of lead exposure for young children in the United States.  There is no safe blood lead level in children, and there is no cure for lead poisoning.  Therefore, it is important to prevent exposure to lead, especially among children. U.S.

Our review identified several conditions regarding the use of HUD funds that were in violation of the ACC. As of September 30, 2003, PRPHA accounting records reflected net account receivables owed to its Low-Income Public Housing Program exceeding $5.97 million.