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We audited the multifamily Section 8 Project-Based Rental Assistance (PBRA) program at the Louis Manor Apartments.  We selected Louis Manor in accordance with our goal to review the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing programs and because our analysis of Tenant Rental Assistance Certification System data showed red flag indicators at Louis Manor that appeared to be similar to the conditions we found during our previous multifamily audits.  This is the fourth audit in a series of Office of Inspector General Region 6 reviews of multifamily Section 8 PBRA programs.  Our objective was to determine whether the owner administered its Section 8 PBRA program in accordance with applicable requirements.

We found that the owner did not administer its Section 8 PBRA program in accordance with applicable requirements.  Specifically, the owner (1) billed HUD for at least 14 tenants whose eligibility it could not support, (2) did not complete annual recertifications in a timely manner, (3) over housed tenants, and (4) did not conduct the required annual inspections.  These conditions occurred because the owner and its identity-of-interest management agent did not implement appropriate controls and lacked proper oversight of staff to ensure that its Section 8 PBRA program was administered in accordance with HUD regulations.  As a result, the owner received $268,452 in housing assistance payments for 14 tenants whose eligibility and unit physical condition standards it could not support.  Further, the owner could not assure HUD that tenants received subsidies based on accurate income information, which could adversely affect the amount of funds available for other eligible families. 

We recommend that the Southwest Region Director of Multifamily Housing require the Louis Manor owner to (1) support or repay HUD $268,452 for tenants whose eligibility the owner could not support; (2) conduct annual recertification’s in a timely manner; (3) properly house tenants in the correct unit size; (4) perform the required annual inspections; and (5) implement appropriate controls to ensure that tenants are eligible, housing assistance subsidies are accurate, units are inspected as required, and tenant files contain all required documentation.