U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.


The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Housing Authority of the City of Terre Haute’s (Authority) Section 8 Housing Choice Voucher program (program). The audit was part of the activities in our fiscal year 2010 annual audit plan. We selected the Authority based upon our analysis of risk factors relating to the housing agencies in Region V’s jurisdiction and our audits of the Authority’s nonprofit development activities, Public Housing Capital Fund program, and Turnkey III Homeownership program. Our objective was to determine whether the Authority administered its program in accordance with HUD’s requirements and its program administrative plan. This is the second of two audit reports on the Authority’s Housing Choice Voucher program.

As identified in this and our prior audits, the deficiencies in the Authority’s programs were significant and demonstrated a lack of effective program management. The Authority’s board of commissioners did not adequately exercise its responsibility to effectively manage the Authority. Its former executive director did not implement adequate controls over its operations. Its board and its former executive director did not follow HUD’s requirements or the Authority’s policies. As a result, HUD had no assurance that the programs managed by the Authority were and/or are managed effectively.

The Authority failed to follow HUD’s and its own requirements regarding the Section 8 waiting list, paid housing assistance for the wrong payment standard and inappropriate housing, and created conflicts of interest regarding its for-profit and nonprofit entities. Households on the waiting list were forced to increase their waiting period before receiving assistance under the program; the Authority paid nearly $117,000 in housing assistance for units that were not allowed under HUD’s requirements; and there was no assurance that households lived in qualified housing, paid the appropriate rents, and were housed fairly and that applicants were properly screened.

The Authority failed to operate its Family Self-Sufficiency program correctly and paid more than $58,000 in escrow payments to households contrary to Federal requirements. It failed to ensure that households sought and maintained suitable employment, completed final goals before graduating from the program, certified that they did not receive welfare assistance before graduating from the program, and were in good standing in the Section 8 program before issuing early escrow payments, and it lacked adequate supporting documentation.

The Authority’s program administration regarding housing assistance payment calculations, documentation to support households’ eligibility for housing assistance, and its Section 8 project-based certificate contract was inadequate. The Authority incorrectly calculated households’ payments, resulting in more than $11,000 in overpayments and more than $600 in underpayments for the period February 2009 through May 2010. Based on our statistical sample, we estimate that over the next year, HUD will overpay more than $15,000 in housing assistance and utility allowances.

We recommend that the Director of HUD’s Cleveland Office of Public Housing require the Authority to (1) implement a detailed comprehensive plan to improve its programs, (2) reimburse its program more than $126,000 from non-Federal funds for the improper use of program funds, (3) reimburse its Family Self-Sufficiency program more than $58,000 from non-Federal funds for its improper use of funds, (4) provide support or reimburse its program nearly $8,900 from non-Federal funds for the unsupported housing assistance payments, and (5) implement adequate procedures and controls to address the findings cited in this audit report to prevent more than $15,000 in program funds from being spent on excessive housing assistance and utility allowances over the next year.

We also recommend that the Director of HUD’s Cleveland Office of Public Housing, in conjunction with the Director of HUD’s Departmental Enforcement Center, take administrative action against the former executive director and former board of commissioners for failing to administer the Authority according to HUD’s and its own requirements.