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We audited the Housing Authority of the County of Lake, IL’s Housing Choice Voucher Program based on the activities included in our 2018 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 appropriately managed its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.

The Authority did not appropriately manage its Family Self-Sufficiency program.  As a result, HUD and the Authority lacked assurance that program participants benefited from the program and made progress toward self-sufficiency and more than $445,000 in coordinator grant funds was used appropriately.  In addition, (1) participants’ escrow accounts were overfunded, (2) graduation disbursements were unsupported, (3) ineligible escrow disbursements were paid, and (4) participants’ escrow accounts were underfunded.
The Authority also did not always correctly calculate and support housing assistance payments.  As a result, it overpaid nearly $17,000, underpaid nearly $4,000, and was unable to support nearly $19,000 in housing assistance.  If the Authority does not correct its certification process, it could overpay nearly $352,000 in housing assistance over the next year.

The Authority did not always ensure that program funds were used for eligible expenses and inappropriately charged fees to its Project-Based Voucher Program developments.  It also did not properly allocate expenses and lacked support that rent charged to its program was reasonable.  As a result, the Authority inappropriately used nearly $14,000 in program funds and earned nearly $9,200 in fees.  In addition, nearly $4,100 in expenses was unsupported, and nearly $43,000 was not available for its program.

We recommend that the Director of HUD’s Chicago Office of Public and Indian Housing require the Authority to (1) support or reimburse its program for the unsupported escrows, unearned coordinator grant funds, housing assistance payment calculations, and expenditures; (2) reimburse its programs from non-Federal funds for the ineligible escrow disbursements, housing assistance payment calculations, and expenses; and (3) implement adequate procedures and controls to address the findings cited in this audit report.