We audited the Fairmont-Morgantown Housing Authority’s Housing Choice Voucher program because (1) we received a complaint alleging that the Authority did not follow program requirements, (2) the Authority administered 1,117 vouchers and received more than $5.2 million in funding for fiscal year 2016, and (3) we had not audited its program. Our audit objectives were 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 and abated housing assistance payments as required. This is the second of two reports issued on the Authority’s program.
The Authority did not always conduct adequate inspections to ensure that its program units met housing quality standards, and it did not always accurately calculate housing assistance payment abatements. Of 68 program units inspected, 63 did not meet HUD’s housing quality standards. Further, 22 of the 63 were in material noncompliance with HUD’s standards. The Authority disbursed $27,737 in housing assistance payments and received $1,489 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 $1.2 million in housing assistance for units that materially fail to meet HUD’s standards. Additionally, the Authority did not always accurately calculate housing assistance payment abatements for units that failed its inspections. It incorrectly calculated the abatement amount for 13 of 37 units reviewed. As a result, HUD made ineligible housing assistance payments totaling $3,822 that should have been abated, and unit owners did not receive $267 in housing assistance payments that should not have been abated.
We recommend that HUD require the Authority to (1) certify, along with the owners of the 63 units cited in this finding, that the applicable housing quality standards violations have been corrected; (2) reimburse its program $29,226 from non-Federal funds for the 22 units that materially failed to meet HUD’s housing quality standards; (3) develop and implement procedures and controls to monitor the inspection process to ensure that program units meet HUD’s standards; (4) reimburse its program $3,822 for payments that should have been abated; and (5) reimburse five owners $267 for excess payments that it improperly abated.
Recommendations
Public and Indian Housing
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Status2018-PH-1002-001-AOpenClosedClosed on December 04, 2018
Certify, along with the owners of the 63 units cited in this finding, that the applicable housing quality standards violations have been corrected.
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Status2018-PH-1002-001-BOpenClosed$29,226.00Questioned 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.
Closed on September 14, 2021Reimburse its program $29,226 from non-Federal funds ($27,737 for housing assistance payments and $1,489 in associated administrative fees) for the 22 units that materially failed to meet HUD’s housing quality standards.
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Status2018-PH-1002-001-COpenClosed$1,241,550.00Funds 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.
Closed on December 04, 2018Develop and implement procedures and controls to ensure that program units meet housing quality standards and inspectors are adequately trained to perform inspections, thereby ensuring that an estimated $1,241,550 in program funds is spent for units that are decent, safe and sanitary.
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Status2018-PH-1002-001-DOpenClosed$3,822.00Questioned 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.
Closed on September 30, 2019Reimburse its program $3,822 from non-Federal funds for housing assistance payments that should have been abated.
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Status2018-PH-1002-001-EOpenClosed$267.00Funds 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.
Closed on August 15, 2018Reimburse five owners $267 for the excess housing assistance payments it abated.
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Status2018-PH-1002-001-FOpenClosedClosed on December 04, 2018
Develop and implement policies and procedures to ensure that extensions granted to owners to make repairs after failed inspections comply with HUD regulations.
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Status2018-PH-1002-001-GOpenClosedClosed on August 21, 2018
Develop and implement controls to ensure that abatements are properly calculated and procedures in its administrative plan are followed.
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Status2018-PH-1002-001-HOpenClosedClosed on August 30, 2018
Train its staff on the proper abatement of housing assistance payments.