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We reviewed the U.S. Department of Housing and Urban Development’s (HUD) funding allotment for tenant protection assistance at the Vineville Christian Towers (project) related to a housing conversion action and its approval of the project’s Rental Assistance Demonstration Program (RAD) conversion.  The review was initiated as a result of internal issues identified during an external audit of the project’s RAD conversion. The objective was to determine whether HUD accurately allotted funding for tenant protection assistance and whether it properly approved the project’s proposed RAD conversion.

HUD inaccurately allotted funding for tenant protection assistance at the project and improperly approved the project’s RAD conversion.  Specifically, the Financial Management Division inappropriately processed a funding allotment for tenant protection assistance for a housing conversion action at the project based on unsupported requests from Multifamily and PIH program offices.  Further, the Office of Recapitalization improperly approved the project’s RAD conversion for 90 units.  These conditions occurred because (1) the procedures for funding allotments did not specify requiring support of the housing conversion action and (2) along with not maintaining adequate approval documentation, the Office of Recapitalization did not ensure that its requirement was met before approving the RAD conversion request for the project.  As a result, nearly $715,000 in tenant protection assistance funding was inaccurately allocated, and more than $624,000 in housing assistance payments and administrative fees was improperly provided through an ineligible Section 8 Project-Based Voucher Program housing assistance payments contract.

We recommend that the General Deputy Assistant Secretary for Housing, in coordination with the General Deputy Assistant Secretary for Public and Indian Housing, update and implement the internal procedures for processing housing conversion actions to require documentation, including but not limited to expired contracts or financial documentation from HUD’s Line of Credit Control System, to show when the last payment was made for the contract to support the proposed housing conversion actions before allotment of tenant protection funds, and Update and implement internal procedures to require verification that tenant protection funds were not previously allotted for the same type of housing conversion action.  We also recommend that the Deputy Assistant Secretary for Multifamily Housing require the Office of Recapitalization, for the remaining retroactive RAD conversion not completed, to take steps, including but not limited to (1) maintaining adequate approval documentation and (2) training staff responsible for reviewing and approving RAD applications to ensure that it enforces its requirement that the tenant protection assistance is provided to tenants before the submission of the RAD application.

Recommendations

Key Details
(mouse over or click items for details)
  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Housing

  •   2020-AT-0802-001-A

    Closed on April 13, 2021

    Update and implement the internal procedures for processing housing conversion actions to require documentation, including but not limited to expired contracts or financial documentation from HUD’s Line of Credit Control System, to show when the last payment was made for the contract to support the proposed housing conversion actions before allotment of tenant protection funds.

  •   2020-AT-0802-001-B

    Closed on April 13, 2021

    Update and implement internal procedures to require verification that tenant protection funds were not previously allotted for the same type of housing conversion action.

  •   2020-AT-0802-001-C

    Closed on April 30, 2020

    For the remaining retroactive RAD conversion not completed, to take steps, including but not limited to maintaining adequate approval documentation to ensure that it enforces its requirement that the tenant protection assistance is provided to tenants before the submission of the RAD application.

  •   2020-AT-0802-001-D

    Closed on April 30, 2020

    For the remaining retroactive RAD conversion not completed, to take steps including but not limited to training staff responsible for reviewing and approving RAD applications to ensure that it enforces its requirement that the tenant protection assistance is provided to tenants before the submission of the RAD application.