We audited the Philadelphia Housing Authority’s (Authority) administration of its housing assistance payments for leased housing under its Moving to Work Demonstration program as part of our fiscal year 2009 audit plan. This is the first of two audit reports that we plan to issue on the Authority’s leased housing program. The audit objective addressed in this report was to determine whether the Authority maintained adequate documentation to support housing assistance and utility allowance payments and accurately calculated them. The Authority generally maintained adequate documentation to support its housing assistance and utility allowance payments but did not always accurately calculate them. We found housing assistance and utility allowance calculation errors in 30 of 41 files reviewed resulting in overpayments and underpayments. We recommend that the U.S. Department of Housing and Urban Development (HUD) require the Authority to correct the errors in the tenant files identified by the audit, reimburse its leased housing program for the remaining ineligible overpayments, reimburse applicable tenants for the remaining underpayments of housing assistance and utility allowances, provide documentation or reimburse the program from nonfederal funds for unsupported payments, and implement improved procedures and controls to prevent it from overpaying an estimated $2.3 million in program funds over the next year.