We audited the Housing Authority of the County of Cook’s (Authority) nonprofit development activities. The audit was part of the activities in our fiscal year 2010 annual audit plan. We selected the Authority’s nonprofit development activities based on a citizen’s complaint forwarded to our office from the County of Cook, IL’s Office of the Independent Inspector General. Our objective was to determine whether the Authority administered its Section 8 housing assistance payments to its nonprofit’s units in accordance with the U.S. Department of Housing and Urban Development’s (HUD) requirements and the Authority’s Section 8 administrative plan.

The Authority’s administration of its Section 8 Housing Choice Voucher program (program) housing assistance payments to its nonprofit instrumentality’s, Turnstone Development (Turnstone), units was inadequate. The Authority failed to collect more than $30,000 in housing assistance payments made to an incorrect program landlord.

The Authority also miscalculated Program housing assistance payments for its project-based vouchers allocated to 21 Turnstone units, resulting in the underpayment of more than $10,000 in housing assistance to 21 households. Further, the Authority failed to recover housing assistance payments made for four Program households after they were deceased, resulting in more than $4,000 in overpayments to Turnstone units.

We recommend that the Director of HUD’s Chicago Office of Public Housing require the Authority to (1) reimburse its program more than $30,000 from non-Federal funds for the housing assistance payments owed by an incorrect program landlord, (2) reimburse the 21 program households more than $10,000 from program funds for the underpayment of housing assistance, and (3) reimburse its program more than $4,000 from non-Federal funds for the housing assistance payments made for deceased households.