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We audited the Housing Authority of the City of South Bend, IN’s Section 8 Housing Choice Voucher program based on our analysis of risk factors related to the public housing agencies in Region 5’s jurisdiction  and the activities included in our fiscal year 2015 annual audit plan. Our audit objectives were to determine whether the Authority (1) correctly calculated and paid housing assistance and utility allowances, (2) obtained and maintained eligibility documentation required to support the admission and continued occupancy of its program households, and (3) appropriately managed its Family Self-Sufficiency program.

The Authority did not always comply with HUD’s requirements and its own administrative plan regarding its program household files. Specifically, it did not (1) correctly calculate and process housing assistance payments and (2) obtain and maintain required eligibility documentation. As a result of these weaknesses, HUD lacked assurance that the Authority used its program funds appropriately. If the Authority does not correct its certification process, it could overpay $753,728 and underpay $67,153 in housing assistance over the next year.

The Authority also failed to appropriately manage its Family Self-Sufficiency program. Specifically, it did not ensure that (1) participants were connected to needed supportive services, (2) services included in the participant’s contracts of participation were provided, and (3) participant’s escrow accounts were properly maintained. As a result of these weaknesses, the Authority inappropriately received Family Self-Sufficiency program coordinator grant funds.

We recommend that HUD require the Authority to (1) reimburse its program nearly $80,000 from non-Federal funds for the ineligible housing assistance and utility allowance payments, (2) support or reimburse its program more than $411,000 from non-Federal funds for the unsupported payments, (3) reimburse HUD more than $24,000 for the unearned Family Self- Sufficiency grant funds, and (4) implement adequate controls to address the findings cited in this audit report.

Recommendation Status Date Issued Summary
2015-CH-1008-002-A Open September 25, 2015 Reimburse HUD $24,088 from non-Federal funds for the Family Self-Sufficiency grant funds inappropriately received.