We audited the Lexington Housing Authority’s Rental Assistance Demonstration Program (RAD) conversion. We selected the Authority based on concerns from the U.S. Department of Housing and Urban Development’s (HUD) North Carolina State Office of Public Housing and a request from the Housing Authority’s Board of Commissioners. Our audit objective was to determine whether the Authority administered its RAD program in accordance with HUD requirements. Specifically, we focused on whether the Authority (1) maintained adequate financial records, (2) completed timely annual audits, (3) established a waiting list, and (4) ensured tenants were properly certified.
The Authority did not maintain auditable books and records, complete timely annual audits, properly establish waiting lists, and ensure that tenants were certified and eligible for RAD project-based voucher assistance. The Authority’s prior administration disregarded the established guidelines for maintaining auditable records and performing tenants’ recertifications for its RAD units. As a result, the Authority disbursed more than $2.7 million that was not properly supported and spent more than $5,900 on improper RAD project based voucher assistance.
We recommend that the Director of the Greensboro Office of Public and Indian Housing require the Authority to (1) provide documentation for costs or repay more than $2.7 million from non-Federal funds, (2) ensure that the Authority completes all outstanding annual audits, (3) repay from non-Federal funds the $5,912 in ineligible RAD rehabilitation assistance expenditures, (4) develop and implement adequate procedures to ensure that its books and records are properly maintained, and (5) properly certify all tenants and reimburse any overages paid.