The U.S. Department of Housing and Urban Development – Office of Inspector General audited the Wellston, MO Housing Authority’s administration of the Community Service and Self-Sufficiency Requirement (CSSR) due to its unusually low reported rate of compliance with the requirement.  Also, this audit will complement our upcoming nationwide internal audit of the requirement.  Our audit objective was to determine whether the Authority properly administered the requirement.

The Authority improperly administered the CSSR.  It improperly determined whether 105 tenants complied with the CSSR and reported incorrect compliance status codes on the Family Report (Form 50058).  The Authority also improperly renewed leases for noncompliant tenants in 78 units.  As a result, HUD provided subsidies for noncompliant tenants, and noncompliant households occupied units that could have housed compliant families.

We recommend that the Deputy Assistant Secretary for Field Operations require the Authority to develop and implement procedures to address noncompliance before lease renewal and terminate a lease if noncompliance is not corrected.  This will put the Wellston Housing Authority’s annual operating subsidy for 78 units of $302,000 to better use.  Also, HUD should provide guidance to the Authority staff for proper CSSR coding and conduct follow up monitoring to confirm the staff’s understanding and ensure staff is properly administering the CSSR including properly determining CSSR status and follow up action.