We audited the Housing Authority of Baltimore City's (Authority) administration of its leased housing under its Moving to Work Demonstration (Moving to Work) program. We conducted the 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) Baltimore field office. This is the first of two audit reports to be issued on the Authority's program. The audit objective addressed in this report was to determine whether the Authority's controls over its tenant files were adequate to ensure compliance with HUD requirements.

The Authority's controls were generally sufficient to ensure that tenant files contained the required documentation according to HUD requirements. The Authority's tenant files were orderly and contained certification and recertification documents in accordance with HUD requirements. However, in 7 of the 22 tenant files reviewed, the Authority incorrectly calculated housing assistance payments, resulting in $3,193 in overpayments and $2,596 in underpayments. The Authority was in the process of strengthening its controls for housing assistance payment determination to ensure that it made future housing assistance payments accurately and in accordance with HUD requirements.

We recommend that the Director of HUD's Baltimore Public Housing Program Hub require the Authority to reimburse its program from nonfederal funds $3,193 for the overpayment of housing assistance and reimburse applicable tenants $2,596 for housing assistance underpayments, thereby putting these funds to better use. We further recommend that HUD conduct a followup review to ensure that the Authority's planned process improvements are implemented to ensure accurate housing assistance payments in the future.