We audited the New Rochelle Municipal Housing Authority’s (Authority) administration of its Resident Opportunities and Self-Sufficiency (ROSS) and Housing Choice Voucher Family Self-Sufficiency grant programs as part of the Office of Inspector General’s (OIG) strategic plan goals to improve the U.S. Department of Housing and Urban Development’s (HUD) fiscal accountability for its assisted housing programs. The audit objectives were to determine whether the Authority expended ROSS and Family Self-Sufficiency program funds for eligible costs and implemented adequate controls over the programs to ensure compliance with HUD regulations. Contrary to regulations, Authority officials charged the grants ineligible and unsupported expenses related to charges incurred before the execution of grant agreements and for costs under another grant. As a result, HUD lacks assurance that funds of $219,715 were spent for eligible purposes and expenses charged totaling $100,637 were properly supported. In addition, the Authority had control weaknesses in its procedures for administering its Housing Choice Voucher and ROSS Family Self-Sufficiency programs causing program participants to not be credited with the proper escrow amount and noncompliance with program administrative requirements.

We recommended that the Director, Office of Public Housing, New York, instruct Authority officials to (1) repay from non-Federal funds the $219,715 in ineligible expenses charged to the grant programs, (2) provide support for or repay from non-Federal funds $100,637 related to the unsupported charges paid with ROSS and Housing Choice Voucher program funds, (3) recoup a $265 overpayment from, and pay $2,997 due to, FSS participants, and (4) develop procedures to ensure compliance with all Family Self-Sufficiency program administrative requirements.