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We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of portability in the Housing Choice Voucher Program based on a congressional inquiry from Senator Grassley’s office.  Our audit objective was to determine whether HUD had adequate oversight of portability in the Housing Choice Voucher Program; specifically, to determine whether (1) HUD had adequate policies and procedures to identify and evaluate the impacts portability may have on public housing agencies’ Housing Choice Voucher Programs and (2) HUD’s financial information relating to portability set-aside and additional administrative fees was correctly calculated and distributed in accordance with its requirements.

HUD’s Office of Public and Indian Housing generally had adequate oversight of portability in the Housing Choice Voucher Program; however, improvements could be made.  Although HUD reviews public housing agencies’ programs, it did not specifically identify and evaluate the effects of portability.  As a result, HUD could miss the opportunity to assess the impact of portability on public housing agencies’ programs and use the information to make decisions that could (1) assist public housing agencies experiencing difficulties with managing the portability component of the program and (2) result in programmatic or process improvements.  In addition, HUD generally calculated portability set-aside funding for increased costs and special administrative fees for portability correctly with a few exceptions.  As a result, HUD overpaid $115,335 in set-aside funding and $133,179 in special administrative fees.  It also underpaid $35,189 in special administrative fees.

We recommend that HUD (1) conduct an assessment of the impact of portability and determine whether technical assistance is necessary for certain public housing agencies, (2) pursue collection or recapture $248,514 for the overpayments and distribute $35,189 for the underpayments of set-aside funds and special administrative fees, and (3) review the calculations and distributions of funds for category 2b portability set-aside and special administrative fees for portability to ensure accuracy.