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We audited the Fairmont-Morgantown Housing Authority’s Housing Choice Voucher program because (1) we received a complaint alleging that the Authority did not follow program requirements, (2) the Authority administered 1,117 vouchers and received more than $5.2 million in funding for fiscal year 2016, and (3) we had not audited its program.  Our audit objectives were to determine whether the Authority ensured that its Housing Choice Voucher program units met the U.S. Department of Housing and Urban Development’s (HUD) housing quality standards and abated housing assistance payments as required.  This is the second of two reports issued on the Authority’s program.

The Authority did not always conduct adequate inspections to ensure that its program units met housing quality standards, and it did not always accurately calculate housing assistance payment abatements.  Of 68 program units inspected, 63 did not meet HUD’s housing quality standards.  Further, 22 of the 63 were in material noncompliance with HUD’s standards.  The Authority disbursed $27,737 in housing assistance payments and received $1,489 in administrative fees for these 22 units.  We estimate that over the next year, if the Authority does not implement adequate procedures to ensure that its program units meet housing quality standards, HUD will pay more than $1.2 million in housing assistance for units that materially fail to meet HUD’s standards.  Additionally, the Authority did not always accurately calculate housing assistance payment abatements for units that failed its inspections.  It incorrectly calculated the abatement amount for 13 of 37 units reviewed.  As a result, HUD made ineligible housing assistance payments totaling $3,822 that should have been abated, and unit owners did not receive $267 in housing assistance payments that should not have been abated. 

We recommend that HUD require the Authority to (1) certify, along with the owners of the 63 units cited in this finding, that the applicable housing quality standards violations have been corrected; (2) reimburse its program $29,226 from non-Federal funds for the 22 units that materially failed to meet HUD’s housing quality standards; (3) develop and implement procedures and controls to monitor the inspection process to ensure that program units meet HUD’s standards; (4) reimburse its program $3,822 for payments that should have been abated; and (5) reimburse five owners $267 for excess payments that it improperly abated.