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We audited the Inglewood Housing Authority’s financial management of its Housing Choice Voucher program due to a hotline complaint allegation and the U.S. Department of Housing and Urban Development (HUD), Los Angeles Office of Public Housing’s concerns about the Authority’s financial management of its program.  Our audit objective was to determine whether the Authority managed the financial operations of its program in compliance with HUD rules and requirements.

The complainant’s allegations and HUD’s Los Angeles Office of Public Housing’s concerns were valid.  The Authority did not manage the financial operations of its program in accordance with HUD rules and requirements.  Specifically, it (1) disbursed $796,186 in program funds for unsupported transactions, (2) misclassified program fraud recovery proceeds, (3) did not terminate program assistance to noncompliant participants, and (4) did not void or reconcile its outstanding checks in a timely manner.  These conditions occurred because the Authority lacked adequate written policies and procedures to ensure compliance with program rules and requirements, and had staffing issues.  In addition, its management was ineffective in ensuring that the financial operations of the program complied with HUD rules and requirements.  

We recommend that the Director of HUD’s Los Angeles Office of Public Housing require the Authority to (1) provide supporting documentation or reimburse its program $796,186 from non-Federal funds for unsupported allocated overhead and personnel costs charged, (2) develop and implement procedures and controls to ensure that the financial management of the program meets rules and requirements, (3) ensure staff is available to monitor and enforce repayments agreements, and (4) provide HUD training and technical assistance to ensure compliance with HUD rules and requirements that pertain to the financial operations of its program.  In addition, we recommend that the Director of HUD’s Los Angeles Office of Public Housing review current and future cost allocation plans to ensure compliance with HUD rules and requirements.