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We audited the Goshen Housing Authority’s Section 8 program as part of the activities in our fiscal year 2014 annual audit plan.  We selected the Authority based on a request from the U.S. Department of Housing and Urban Development’s (HUD) Indianapolis Office of Public and Indian Housing.  Our objective was to determine whether the Authority administered its program in accordance with HUD’s and its own requirements. 

The Authority did not always administer its Section 8 program in accordance with HUD’s and its own requirements.  Specifically, the Authority did not correctly calculate and maintain its net restricted assets.  It also failed to maintain accurate books of record to support the appropriateness of (1) credit card expenditures and (2) employee loans.  Further, the Authority did not properly manage its operating bank account.  As a result, HUD and the Authority lacked assurance that program funds were (1) available to provide assistance to eligible families and (2) used appropriately. 
In addition, the Authority failed to ensure that 46 program units, including 19 that materially failed, complied with HUD’s housing quality standards and its program administration plan.  As a result, the Authority’s households were subjected to health- and safety-related violations, and the Authority did not properly use its program funds.
Further, the Authority did not always (1) correctly calculate housing assistance payments, (2) apply the appropriate payment standards, (3) maintain required eligibility documentation, and (4) ensure that assisted units were affordable.  As a result, HUD lacked assurance that the Authority used its program funds appropriately.

We recommend that the program center coordinator of HUD’s Indianapolis Office of Public and Indian Housing require the Authority to (1) reimburse its program more than $83,000 from non-Federal funds, (2) reimburse its net restricted assets account from non-Federal funds more than $640,000 or the current amount owed, (3) support or reimburse its program more than $274,000 from non-Federal funds, (4) pursue repayment or reimburse its program more than $10,000 from non-Federal funds, and (5) reimburse its households or landlords nearly $7,000.  We also recommend that HUD consider a declaration of substantial default based on the issues cited in this audit report.