The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Grand Rapids Housing Commission’s (Commission) Section 8 Project-Based Voucher program (program). The audit was part of the activities in our fiscal year 2009 annual audit plan. We selected the Commission’s program based upon our internal audit survey of HUD’s oversight of the program and our analysis of risk factors relating to the housing agencies in Region V’s jurisdiction. Our objective was to determine whether the Commission effectively administered its program in accordance with HUD’s and its own requirements.
The Commission’s administration of its program was inadequate. It lacked documentation to support its selection and approval of program projects and provided housing assistance for units without appropriate housing assistance payments contracts. As a result, it could not support that its eight projects were eligible for more than $2.8 million in program assistance, overpaid more than $84,000 in program funds, and lacked support that more than $210,000 in program administrative fees received were appropriate. We estimate that over the next 12 months, the Commission will receive nearly $130,000 in improper administrative fees.
The Commission provided housing assistance for improper households. It failed to ensure that six of its program participants met program eligibility requirements. As a result, it overpaid nearly $30,000 in program funds and received more than $3,000 in administrative fees contrary to HUD’s and its requirements.
The Commission made improper adjustments to housing assistance payments for 78 households. Of those adjustments, duplicate adjustments were made for 61 households, adjustments were incorrectly calculated for 19 households, and two of the households’ adjustments lacked supporting documents. As a result, the Commission overpaid nearly $10,000 and underpaid more than $10,000 in housing assistance.
The Commission provided improper housing assistance for vacant units. It failed to follow its administrative plan in providing vacancy payments for 24 households, resulting in more than $5,500 in overpayments and more than $1,300 in underpayments.
We informed the Commission’s executive director and the Acting Director of HUD’s Detroit Office of Public Housing of minor deficiencies through a memorandum, dated November 19, 2009.
We recommend that the Acting Director of HUD’s Detroit Office of Public Housing require the Commission to reimburse its program from nonfederal funds for the improper use of more than $102,000 in program funds, provide documentation or reimburse its program more than $3 million from nonfederal funds for the unsupported payments cited in this audit report, and implement adequate procedures and controls to address the findings cited in this audit report to prevent more than $140,000 in program funds and administrative fees from being used improperly over the next year.