We audited the Louisville Metro Housing Authority’s Section 8 Housing Choice Voucher program based on our risk assessment of all Kentucky public housing agencies and as part of the activities in our annual audit plan. Our audit objective was to determine whether the Authority administered its program units in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.
The Authority did not administer its program units in accordance with HUD’s and its own requirements. Due to an inadequate quality control inspections process, the Authority did not ensure that 103 of 106 (97 percent) program units inspected met HUD’s or its own housing quality requirements, and 44 of the 103 units were found to be in material noncompliance with the requirements. In addition, for abatement of housing assistance payments and determination of rent reasonableness and owner eligibility, the Authority did not always comply with HUD’s and its own requirements. These conditions occurred because the Authority lacked written procedures for its staff to follow in performing their respective duties. As a result, some tenants lived in inadequately maintained units, and the Authority disbursed more than $65,500 in housing assistance payments and received more than $7,800 in administrative fees for the units in noncompliance with program requirements. Unless the Authority improves its inspection program and ensures that all of its units meet housing quality requirements, we estimate that over the next year, HUD will pay more than $20.5 million in housing assistance for units in material noncompliance with requirements.
We recommend that the Director of HUD’s Louisville, KY, Office of Public and Indian Housing require the Authority to (1) reimburse its program more than $73,000 from non-Federal funds, (2) ensure that all violations cited for units failing to meet housing quality requirements have been corrected and certify that the units meet program requirements, and (3) develop and implement adequate controls and written procedures to address deficiencies cited and prevent more than $20.5 million in program funds from being spent over the next year on units that do not materially comply with program requirements.