We conducted this audit as part of the Office of Inspector General’s (OIG) annual goals for audits of the Section 8 Housing Choice Voucher (Voucher) and low-income public housing (low-income) programs. Our audit objective was to determine whether the Waltham Housing Authority (Authority) employed acceptable management and financial practices to efficiently and effectively administer the use of Voucher and low-income program funds in compliance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) requirements. The specific audit objectives included the following: (1) did the Authority account for the use of its Section 8 administrative and local reserves to ensure proper use, (2) were interprogram transactions relating to the Voucher and low-income programs properly accounted for, (3) did the Authority comply with HUD procurement regulations regarding contracted service for administering the Federal programs, and (4) did the Authority ensure that travel incurred for the Federal programs was in accordance with HUD guidance.

The Authority generally administered the Voucher and low-income programs efficiently and effectively and in compliance with its annual contributions contract and HUD regulations. The Authority also generally accounted for the use of its Section 8 administrative and local reserves to ensure proper use. However, it did not (1) properly account for and report interprogram fund transactions between its Federal and State programs, resulting in nearly $3.9 million in unsupported transactions being recorded in its program accounts; (2) provide support and justification for $551,828 in contracts to show that the contracts were properly documented; and (3) establish a reasonable travel policy to ensure that travelers submitted detailed travel expense vouchers.

We recommend that the Director of the Office of Public Housing, Boston hub, require the Authority to (1) provide support for more than $3.9 million in interprogram fund transactions that were out of balance between Federal and State programs and implement procedures for recording and reconciling interprogram transactions and correcting imbalances, (2) provide support and justification for $551,828 in contracts or reimburse its operating funds from non-Federal funds for the applicable amounts, and (3) revise its travel policy and obtain approval of the policy from the Authority’s board of commissioners.