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We audited the Housing Authority of the City of Muncie’s Housing Choice Voucher program based on the activities included in our 2016 annual audit plan and our analysis of risk factors related to the public housing agencies in Region 5’s jurisdiction.  Our audit 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 program in accordance with HUD’s and its own requirements.  It did not (1) obtain and maintain required eligibility documentation and (2) correctly calculate and pay housing assistance and utility allowances.  As a result of these weaknesses, HUD and the Authority lacked assurance that more than $587,000 in program funds was used appropriately.  If the Authority does not correct its certification process, we estimate that it could overpay nearly $251,000 in housing assistance over the next year.

In addition, it did not appropriately use HUD’s Enterprise Income Verification system to identify program households with unreported or underreported income to recapture overpaid housing assistance and utility allowances.  As a result, nearly $76,000 in program funds was not available for other program use.
The Authority also did not appropriately manage its Family Self-Sufficiency program.  As a result, HUD and the Authority lacked assurance that (1) program participants benefited from the program or had made progress toward self-sufficiency and (2) more than $100,000 in program funds was used appropriately.

We recommend that the Director of HUD’s Indianapolis Office of Public and Indian Housing require the Authority to (1) support or reimburse its program more than $617,000 from non-Federal funds for the unsupported housing assistance payments and Family Self-Sufficiency program escrow fund activities, (2) reimburse its program more than $88,000 from non-Federal funds for the ineligible housing assistance payments, (3) reimburse its program households more than $2,300 for the overpayment of housing assistance, (4) transfer more than $55,000 to its Housing Choice Voucher program, and (5) implement adequate controls to address the findings cited in this audit report.