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 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 second audit report issued on the Authority's program. The audit objective addressed in this report was to determine whether the Authority ensured that its program units met housing quality standards.

The Authority failed to ensure that its program units met housing quality standards. We inspected 59 housing units and found that 57 units did not meet HUD's housing quality standards. Moreover, 41 of the 57 units had health and safety violations that the Authority's inspectors neglected to report during their last inspection and/or repair based on the outcome of their most recent inspection. The Authority spent $47,862 in program and administrative funds for these 41 units.

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 for the improper use of $47,862 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 $3.5 million from being spent annually on units that materially fail to meet HUD's housing quality standards.