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We completed a review of the New York City Housing Authority’s administration of its Section 8 Housing Choice Voucher program.  We selected the Authority based on indicators from the U.S. Department of Housing and Urban Development’s (HUD) monitoring reports.  The objectives of the audit were to determine whether the Authority administered its Section 8 Housing Choice Voucher program in accordance with HUD regulations and made housing assistance payments for eligible program participants.  This report is the first of two reports on the Authority’s administration of its Section 8 Housing Choice Voucher program.

Our review determined that the Authority did not always administer its Section 8 Housing Choice Voucher program in accordance with HUD regulations and did not execute or maintain documentation to support eligibility.  Specifically, Authority officials did not document whether rent reasonableness determinations for 34.7 percent of the sample of 115 cases were performed to properly ensure that rents paid for assisted units were reasonable in relation to rents for comparable units.  Therefore, Authority officials could not assure HUD that at least 5 percent of the $87.1 million, or more than $4.3 million, in administrative fees received was reasonable.

In addition, officials did not always maintain (1) executed housing assistance payments contracts, (2) executed lease agreements, and (3) documents to support the sources of tenant income for recertification.  As a result, the Authority could not assure HUD that $24,009 in housing assistance payments was disbursed and adequately supported in accordance with HUD regulations.

We recommend that the Director of HUD’s New York Office of Public Housing require Authority officials to (1) strengthen controls to ensure that rent reasonableness determinations are performed and documented and repay more than $4.3 million in unreasonable administrative fees from non-Federal funds, and (2) provide justification for the $24,009 in Section 8 Housing Choice Voucher program funds related to tenant files that did not contain HUD- required support.  Any costs determined to be ineligible should be repaid with non-Federal funds.