The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the Schuyler Housing Authority (Authority) to determine whether the Authority improperly spent public housing assets when developing and operating an assisted living program.

We found that the Authority inappropriately used more than $78,000 in public housing funds to pay expenses of a non-HUD assisted living program. In addition, the Authority improperly allowed the assisted living entity to collect more than $60,000 in public housing rent. Further, the Authority did not maintain tenant records or accurately report tenant data to HUD for assisted living participants.

We recommended that HUD require the Authority to obtain repayment from the non-HUD assisted living entity for those expenses paid on the entity's behalf, and require the Authority to collect public housing tenant rents that the entity had not transferred to the Authority. We also recommended that HUD require the Authority to implement controls to separate public housing revenues and expenses from those of the assisted living program, and that HUD monitor the Authority to ensure that it does not continue to inappropriately support the assisted living program.