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We audited Vineville Christian Towers’ (project) Rental Assistance Demonstration Program (RAD) conversion in accordance with our annual audit plan.  Our audit objective was to determine whether the project’s RAD conversion to the Section 8 Project-Based Voucher Program was completed in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements; specifically, whether Christian Church Homes of North California (owner) ensured that the project’s RAD conversion was accurate and supported.

The owner did not ensure that the project’s RAD conversion was accurate and supported.  Specifically, the owner did not ensure that (1) the converting units were for qualified tenants who received tenant protection assistance before the submission of the RAD application and had not vacated the units and (2) the RAD conversion was supported with tenant protection assistance based on an adequate housing conversion action.  This condition occurred because the owner was not familiar with the requirements related to the RAD conversion and tenant protection assistance.  As a result, it (1) improperly executed the Section 8 Project-Based Voucher Program housing assistance payments contract for 90 units at the project, (2) improperly received more than $485,000 in housing assistance, and (3) may have provided improper certifications to HUD on program compliance.

We recommend that the Director of HUD’s Atlanta, GA, Office of Public and Indian Housing require the owner to (1) cancel the project’s contract resulting from the RAD conversion, (2) reimburse its administering public housing agency more than $485,000 from nonproject funds, and (3) develop and implement procedures and adequately train its staff to help ensure compliance with program requirements.  We also recommend that HUD’s Associate General Counsel for Program Enforcement and Departmental Enforcement Center take and pursue appropriate enforcement and administrative actions against the owner.