We audited the Housing Authority of the City of Pittsburgh's (Authority) administration of its leased housing under its Moving to Work Demonstration (Moving to Work) program as part of our fiscal year 2008 audit plan. This is our 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 leased housing units met the U.S. Department of Housing and Urban Development's (HUD) housing quality standards.

The Authority failed to ensure that its leased program units met housing quality standards. Of 66 program units statistically selected for inspection, 62 did not meet HUD's housing quality standards, of which 53 were in material noncompliance with housing quality standards. The Authority spent $100,362 in program and administrative funds for these 53 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 $9.3 million in housing assistance on units that materially fail to meet HUD's housing quality standards.

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 $100,362 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 $9.3 million from being spent annually on units that materially fail to meet HUD's housing quality standards.