The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the Housing Authority of the City of Fort Wayne's (Authority) Section 8 Housing Choice Voucher program (program). The audit was part of the activities in our fiscal year 2007 annual audit plan. We selected the Authority based upon our analysis of risk factors relating to the housing agencies in Region V's jurisdiction. Our objective was to determine whether the Authority administered its program in accordance with HUD's requirements.
The Authority's program administration regarding housing assistance payment calculations, documentation to support households' eligibility for housing assistance, monitoring of reported zero-income households, administration of the Family Self-Sufficiency Program, and voucher utilization were inadequate. The Authority incorrectly calculated households' payments resulting in more than $73,000 in overpayments and nearly $7,000 in underpayments for the period July 2005 through June 2007. Based on our statistical sample, we estimate that over the next year, the Authority will overpay more than $1 million in housing assistance and utility allowances.
The Authority also did not ensure that its households' files contained the required documentation to support its housing assistance and utility allowances. Of the 67 files statistically selected for review, 30 did not contain documentation required by HUD and the Authority's program administrative plan to support nearly $195,000 in housing assistance and utility allowances. Further, the Authority did not perform periodic reviews to determine that reported zero-income households had unreported income resulting in more than $28,000 in improper housing assistance and utility allowances.
The Authority failed to administer its Family Self-Sufficiency Program according to federal requirements. As a result, it overfunded and underfunded participants' escrow accounts by more than $8,000 and nearly $4,000, respectively, had nearly $15,000 in escrow funds that should have been reimbursed to the program, could not support more than $151,000 in Housing Choice Voucher - Family Self-Sufficiency/Homeownership Coordinator funds, and failed to support nearly $890,000 that it determined was to be forfeited from escrow accounts.
Although the Authority had nearly $6.2 million in program funds which could be used to house additional eligible households, its program was significantly under leased. As a result, eligible participants were denied the opportunity to seek decent, safe, and sanitary housing under the program.
We recommend that the Director of HUD's Cleveland Office of Public Housing require the Authority to reimburse the applicable program from nonfederal funds for the improper use of more than $135,000 in funds, provide documentation or reimburse the applicable program nearly $1.3 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 $1 million in program funds from being spent on excessive housing assistance and utility allowances and more than $3 million from not being used to provide decent, safe, and sanitary housing to eligible households.