We audited the City of Hartford, Connecticut's (City) administration of its Housing Choice Voucher program (Voucher program) as part of our annual audit plan. Our overall audit objective was to determine whether the City properly administered its Voucher program in compliance with its annual contributions contracts and HUD regulations.

The City generally administered its Voucher program in compliance with its annual contributions contracts and HUD regulations with regard to tenant eligibility requirements, properly calculating and supporting housing assistance payments, ensuring reasonable subsidized rents, and adequately using its authorized vouchers. However, we identified questioned costs and opportunities for funds to be put to better use totaling more than $2.4 million. Specifically, housing did not always meet minimum standards, the City continued to pay for housing with uncorrected housing quality standards deficiency violations, it could not support administrative fees charged, and it did not properly account for tenant fraud recoveries.

Of the housing units we inspected, 47 percent did not meet minimum standards, and 27 percent had serious safety hazards. We estimate that the City may pay more than $1.5 million over the next year for units with material deficiencies if it does not monitor its contract inspectors and implement effective quality control procedures. In addition, rent payments were made when owners failed to correct deficiencies within required timeframes. If this condition is not corrected, we estimate that the City may pay more than $225,000 for housing with uncorrected deficiencies.

The City also could not support more than $623,000 in administrative fees charged to the program. It also did not properly account for and monitor tenant fraud recoveries due to inadequate accounting controls and oversight of its contract administrator. During the audit, the contractor implemented corrective actions, and we estimate that the City will now receive more than $17,000 in additional funds from HUD in 2009.

We recommend that the Director of HUD's Boston Office of Public Housing require the City to (1) implement controls to ensure that housing units meet minimum housing quality standards and abate rents when units are not repaired within required timeframes; (2) implement a reasonable method for allocating salaries, benefits, and other costs to its Voucher program and repay the program for any unsupported costs; and (3) properly monitor, account for, and report tenant fraud recoveries to HUD.