The U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General (OIG) audited the Saginaw Housing Commission’s Section 8 Housing Choice Voucher program. The audit was part of the activities in our fiscal year 2012 annual audit plan. We selected the Commission based upon our previous audits of its use of Federal funds and a request from HUD management to perform a comprehensive review of its programs. Our objective was to determine whether the Commission operated its program in accordance with HUD’s and its own requirements. This was the third audit performed on the Commission.
The Commission did not always administer its program in accordance with HUD’s and its own requirements. It failed to ensure that program participants’ Family Self-Sufficiency escrow account balances were calculated appropriately. Specifically, it (1) underfunded participants’ graduation and port-out payments, (2) overpaid participants’ graduation and interim payments, (3) underfunded participants’ escrow account balances, (4) failed to recapture funds in its system due to incorrect escrow account balances, and (5) failed to maintain required documentation in its participants’ files. Further, the Commission failed to (1) appropriately use HUD’s Enterprise Income Verification system income discrepancy reports and (2) recover or reimburse its Section 8 Housing Choice Voucher program housing assistance and utility allowance payments for households with unreported or underreported income. As a result of the Commission’s noncompliance, HUD and the Commission lacked assurance that more than $1 million in program funds was used appropriately.
We recommend that the Director of HUD’s Detroit Office of Public Housing require the Commission to (1) reimburse its Family Self-Sufficiency program nearly $22,000 for escrow overpayments, (2) reimburse its participants nearly $12,000 for the underpayment of escrow funds, (3) provide support or reimburse HUD more than $812,000 from non-Federal funds, (4) ensure that nearly $178,000 in program funds was used appropriately, and (5) implement adequate procedures and controls to address the findings cited in this audit report.