We audited the Harrisburg Housing Authority's (Authority) administration of its housing quality standards inspection program for its Section 8 Housing Choice Voucher program based on the survey results of our recently completed audit of the Authority's low-rent public housing and Section 8 Housing Choice Voucher programs. This is our second audit report issued on the Authority's programs. The audit objective addressed in this report was to determine whether the Authority adequately administered its Section 8 housing quality standards inspection program to ensure that its program units met housing quality standards in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.

The Authority did not adequately administer its inspection program to ensure that its program units met housing quality standards as required. We inspected 52 housing units and found that 37 units did not meet HUD's housing quality standards. Moreover, 35 of the 52 units had exigent health and safety violations that the Authority's inspectors neglected to report during their last inspection. The Authority spent $34,113 in program and administrative funds for these 35 units. We estimated that over the next year if the Authority does not implement adequate procedures and controls to ensure that its program units meet housing quality standards, HUD will pay more than $884,000 in housing assistance and administrative fees for units with material housing quality standards violations. In addition, the Authority did not abate rents for units that failed the Authority's housing quality standards inspections. For 11 units that we reviewed, the Authority failed to abate the program rents or terminate the contracts, resulting in an improper payment of $10,796 in housing assistance and administrative fees.

We recommend that HUD require the Authority to ensure that housing units inspected during the audit are repaired to meet HUD's housing quality standards, reimburse its program from nonfederal funds for the improper use of $34,113 in program funds for units that materially failed to meet HUD's housing quality standards, and implement adequate procedures and controls to ensure that in the future, program units meet housing quality standards to prevent an estimated $884,917 from being spent annually for units with material housing quality standards violations. Further, we recommend that HUD require the Authority to reimburse its program $10,796 from nonfederal funds for the 11 units for which it did not abate payment or terminate the assistance contract in a timely manner and develop and implement management controls to ensure that employees comply with its policies and procedures concerning abatements.