We audited the Delaware County Housing Authority's (Authority) Section 8 Housing Choice Voucher program (program). We selected the Authority for an audit based on our analysis of various risk factors relating to the housing authorities under the jurisdiction of the U.S. Department of Housing and Urban Development's (HUD) Philadelphia regional office. This is the first of two audit reports that we plan to issue on the Authority's program. Our audit objective was to determine whether the Authority administered its housing assistance payments in compliance with HUD requirements and its own administrative plan.

The Authority did not adequately administer its housing assistance payments in compliance with HUD requirements and its own administrative plan. It incorrectly calculated housing assistance and utility allowance payments and failed to execute housing assistance contracts in a timely manner, resulting in about $58,900 in ineligible payments and more than $3,300 in tenant underpayments. It also could not support more than $26,500 in housing assistance and utility allowance payments. If the Authority does not implement sufficient controls or procedures to ensure that its program is administered in compliance with HUD requirements, we estimate that over the next year it will pay more than $926,300 in ineligible housing assistance.

We recommend that HUD require the Authority to reimburse the program from nonfederal funds for ineligible payments of about $58,900, reimburse the appropriate tenants or households more than $3,300 for the underpayment of housing assistance and utility allowances, provide documentation or reimburse the program more than $26,500 from nonfederal funds for unsupported payments, and implement sufficient controls or procedures to prevent ineligible payments of more than $926,300 in program funds over the next year.