We audited the Housing Authority of the County of San Bernardino’s Shelter Plus Care program due to a public complaint alleging that the Authority disregarded U.S. Department of Housing and Urban Development (HUD) program requirements related to participants’ eligibility.  Our objective was to determine whether the Authority administered its program funds in accordance with HUD rules and requirements, specifically related to participants’ eligibility.

The complaint had merit.  The Authority did not always ensure that its participants were eligible for the program.  Of 75 participants reviewed, 50 were ineligible for the program.  We could not validate the eligibility of eight participants because of missing documents.  The Authority spent more than $3.2 million in program funds on ineligible participants and participants whose eligibility was not supported with documentation.  If the Authority does not improve its controls, it could pay at least $873,428 in program funds for ineligible participants in the next year.  Further, the Authority’s practices hampered its ability to accomplish HUD’s goal of ending homelessness for individuals with disabilities and their families. 

We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the Authority to (1) repay HUD more than $3.1 million from non-Federal funds for program funds spent on ineligible participants, (2) provide supporting documentation for $136,346 in program funds used for participants for whom eligibility could not be determined, and (3) develop and implement written policies and procedures to ensure that participants are eligible for the program and comply with HUD rules and requirements so that $873,428 in program funds can be put to better use.