We audited the District of Columbia Housing Authority's (Authority) controls over its leased housing under its Moving to Work Demonstration program 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) Baltimore field office. This is the third of three audit reports on the Authority's program. The audit objectives addressed in this report were to determine whether the Authority implemented adequate controls to prevent overhousing, ensured that it made assistance payments only for the time period that families resided in units, and effectively implemented a family self-sufficiency program.

The Authority had not implemented adequate controls to prevent overhousing and prevent it from making assistance payments for vacant units and had not effectively implemented a family self-sufficiency program. The Authority paid for 194 families to live in larger housing units than its policy allowed. As a result, it made excessive housing assistance payments totaling $42,955 monthly. In addition, it made ineligible housing assistance payments totaling $322,389 for vacant units. During the audit, the Authority recovered $278,561 of the $322,389 in ineligible payments. It needs to recover the remaining $43,828 in housing assistance payments related to these units. Further, the Authority did not operate its family self-sufficiency program according to HUD requirements. As a result, it made ineligible and unsupported payments to participants' escrow accounts totaling $44,702 and did not make contributions of more than $8,900 to the escrow account for one participant.

We recommend that the Director of HUD's Baltimore Public Housing Program Hub require the Authority to reimburse the applicable programs for its improper use of more than $80,000 in funds, provide documentation or reimburse the applicable program more than $51,000 for the unsupported payments cited in this audit report, and implement adequate procedures and controls to address the findings cited in this audit report to prevent the Authority from spending more than $426,000 in program funds for overhoused tenants. We also recommend that the Director of HUD's Baltimore Public Housing Program Hub verify that the Authority contributed more than $8,900 to the family self-sufficiency escrow account for one participant.