The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the DuPage Housing Authority’s (Authority) Section 8 Housing Choice Voucher program (program). The audit was part of the activities in our fiscal year 2010 annual audit plan. We selected the Authority based on the results of our audits of its Project-Based Voucher program. Our objective was to determine whether the Authority effectively administered its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements and its administrative plan.
As identified in this and our prior two audits, the Authority (1) did not maintain adequate documentation to support the eligibility of its Section 8 Project-Based Voucher program projects, (2) executed housing assistance payments contracts with inappropriate contract rents, (3) did not properly select Section 8 Project-Based Voucher program households from waiting lists, (4) lacked controls over housing assistance and utility allowance payments, (5) did not appropriately manage its program funds, and (6) did not properly select Section 8 Housing Choice Voucher program households from its waiting list. As a result, HUD had no assurance that the Authority’s resources were used to benefit low- and moderate-income individuals.
The Authority did not manage its program funds in accordance with HUD’s requirements and its policies. It had unallowable and questionable transactions, did not correctly report its financial standing to HUD, did not maintain complete and accurate records, and miscalculated its net restricted assets. This noncompliance occurred because the Authority disregarded HUD’s requirements and directives, lacked an understanding of program regulations, and failed to implement adequate procedures and controls. As a result, the Authority used more than $2.3 million in program funds for transactions not related to its program and was unable to support the use of more than $330,000 in program funds.
The Authority did not follow HUD’s requirements and directives and its program administrative plan regarding the selection of program households. It did not properly select all program households from its waiting list. Instead, it admitted 146 households based on referrals. This noncompliance occurred because the Authority disregarded HUD’s regulations and guidance and its program administrative plan. As a result, it inappropriately paid more than $2.6 million in housing assistance to households that were inappropriately admitted to its program. In addition, the Authority was unable to support that nearly $70,000 in funds received from the City of Chicago was used toward housing assistance payments.
We also recommend that the Director of HUD’s Chicago Office of Public Housing, in conjunction with the Director of HUD’s Departmental Enforcement Center, take administrative action against the executive director and board of commissioners for failing to administer the Authority effectively and in accordance with HUD’s and its own requirements. Additionally, we recommend that the Acting Director of HUD’s Chicago Office of Fair Housing and Equal Opportunity review the Authority’s household selections to ensure that they comply with HUD’s requirements. If the Authority fails to comply with HUD’s requirements, the Acting Director should take appropriate action against the Authority and/or its applicable employee(s).