In accordance with our regional plan to review public housing programs, we reviewed the Beaumont Housing Authority, Beaumont, TX.  Our objective was to determine whether the Authority’s controls over tenant and unit eligibility were sufficient to ensure that it administered its low-rent public housing and Housing Choice Voucher programs in accordance with U.S. Department of Housing and Urban Development (HUD) regulations and guidance.

While the Authority generally had effective internal controls to ensure that public housing and Housing Choice Voucher tenants and units were eligible for assistance, some of its controls need to be strengthened.  Specifically, (1) the Authority did not always use correct housing choice voucher payment standards or require families to move to smaller units when reductions in family composition warranted changes, (2) tenant files contained miscellaneous errors and were missing documents, (3) the Authority did not have a form or formal process to identify tenant conflicts of interest, and (4) the Authority did not consistently track and enforce its tenant repayment agreements for public housing and housing choice vouchers or follow its policies for reporting tenant fraud to the Office of the Inspector General (OIG).

As a result, the Authority overpaid $10,184 in rent subsidies for eight families and underpaid $1,224 in rent subsidies for four families.  If the Authority does not take corrective action, it will overpay an additional $3,816 and underpay an additional $1,240, respectively, for these families before their next annual recertification dates.  Also, funds due the Authority were not collected in a timely manner and could become uncollectible.  Further, the deterrent effect of requiring tenants to repay the funds or face termination from the program for underreporting income was greatly reduced because the Authority did not enforce repayment agreements. 

Our recommendations include requiring the Authority to We recommend that the Director, Public and Indian Housing, San Antonio, TX, require the Authority to (1) develop and implement procedures that:  ensures that families are provided the appropriate voucher based on family composition; ensures that it complies with the payment standards in its Administrative Plan; and, reduces the risk of future overpayments and underpayments in its Housing Choice Voucher program, (2) develop and implement a system to initiate, track, and enforce tenant repayment agreements and payments under those agreements, (3) repay $10,184 in Housing Choice Voucher ineligible overpayments to its program from non-Federal funds, (4) repay $1,224 in Administrative Reserve funds to four families whose subsidies were underpaid, and (5) review all Housing Choice Voucher program families to determine whether their subsidies are correct based on the payment standards and repay any overpayments to its program and any underpayments to the affected families.