In accordance with our regional audit plan, we performed a number of reviews of very small and small housing agencies located in the U.S. Department of Housing and Urban Development’s (HUD) Region 6 jurisdiction.  We worked with HUD’s Office of Public and Indian Housing (PIH) and Departmental Enforcement Center and the Office of the Inspector General’s (OIG) Office of Investigation to identify housing agencies with areas of concern.  In addition, we reviewed the results of other OIG audits, reviews, and investigations of very small and small housing agencies throughout the United States.  The objective of this review was to summarize the results of the prior audits, reviews, and investigations of very small and small housing agencies to identify common areas of concern or systemic deficiencies.

Of the 26 housing agencies reviewed, 24 had common violations of HUD and other requirements.  Specifically, the housing agencies (1) did not have adequate financial controls (18 housing agencies), (2) did not follow procurement regulations or maintain documentation to support their procurement functions (15 housing agencies), and (3) did not properly administer tenant rents (7 housing agencies).  In addition, their executive directors and boards of commissioners violated requirements (11 housing agencies) (see appendix C).  These conditions occurred because housing agencies’ management and boards either chose to ignore requirements or lacked sufficient knowledge to administer their HUD programs properly.  HUD stated that it did not have adequate resources to properly monitor or maintain sufficient contact with the housing agencies to provide them with necessary guidance and feedback.  As a result, the 26 reports and memorandums reviewed identified questioned costs and funds to be put to better use of more than $18 million.  Further, results obtained from 10 Office of Investigation cases nationwide showed criminal activities by executive directors and others.  Examples of offenses included theft including unapproved pay raises, misuse of credit cards, and payment for unauthorized overtime; payments to fictitious landlords; and payments to individuals and companies for work that was not done or for false invoices.  HUD has implemented online training and changed program requirements to improve management knowledge and housing agency capacity. 

We recommended that HUD should issue guidance to housing agency boards, executive directors and local officials reminding them of their duties and responsibilities and require the board chairs and executive directors to provide a signed acknowledgement of their duties and responsibilities.  Additionally, HUD should continue refining the online training as planned to add risk management and program integrity module and to ensure that the training provides the needed education to housing authority officials.