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We audited the Housing Authority of the City of Durham’s Section 8 Housing Choice Voucher program based on a hotline citizen complaint and as part of the activities in our fiscal year 2015 annual audit plan.  Our objective was to determine whether the Authority administered its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements and whether the complaint was valid.

The Authority did not always comply with HUD’s requirements and its own administrative plan regarding the administration of its program, and some of the allegations in the complaint were valid.  The Authority did not always (1) maintain required eligibility documentation, (2) correctly calculate housing assistance payments, (3) void a housing assistance payments contract as required, (4) perform reexaminations and housing quality standards inspections in a timely manner, (5) properly administer zero-income program households, and (6) limit annual unit rent increases in accordance with its administrative plan.  These conditions occurred because Authority staff failed to always follow HUD’s and the Authority’s requirements for administering the program.  As a result of this noncompliance, the Authority paid more than $31,800 in unsupported housing assistance, received more than $2,600 in unsupported administrative fees, paid more than $13,500 in ineligible housing assistance, and received more than $1,500 in ineligible administrative fees.

We recommend that HUD require the Authority to (1) reimburse its program more than $15,000 for ineligible housing assistance payments and administrative fees from non-Federal funds, (2) support or reimburse its program more than $34,000 in unsupported housing assistance payments and administrative fees from non-Federal funds, (3) determine and reimburse its program from non-Federal funds for the overpayment of any housing assistance due to approval of rent increases contrary to its requirements, (4) develop and implement program controls to address deficiencies cited in this report.