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We audited the Chester Housing Authority’s Housing Choice Voucher program because (1) it recently regained control of its operations after 20 years in receivership, (2) it had 1,566 vouchers and received more than $14.9 million in fiscal year 2016, and (3) we had not audited its program.  Our audit objective was to determine whether the Authority ensured that its Housing Choice Voucher program units met the U.S. Department of Housing and Urban Development’s (HUD) housing quality standards. 

The Authority did not always conduct adequate inspections to ensure that its program units met housing quality standards.  Of 65 program units inspected, 61 did not meet HUD’s housing quality standards.  Further, 22 of the 61 were in material noncompliance with housing quality standards.  The Authority disbursed $44,214 in housing assistance payments and received $2,391 in administrative fees for these 22 units.  We estimate that over the next year, if the Authority does not implement adequate procedures to ensure that its program units meet housing quality standards, HUD will pay more than $2.6 million in housing assistance for units that materially fail to meet those standards.
 
We recommend that HUD require the Authority to (1) certify, along with the owners of the 61 units cited in this finding, that the applicable housing quality standards violations have been corrected; (2) reimburse its program $46,605 from non-Federal funds for the 22 units that materially failed to meet HUD’s housing quality standards; and (3) develop and implement procedures and controls to monitor the inspection process to ensure that program units meet housing quality standards.