We audited the District of Columbia Housing Authority's (Authority) administration of its leased housing under its Moving to Work Demonstration (Moving to Work) program based on our analysis of various risk factors relating to the housing authorities under the jurisdiction of the U.S. Department of Housing and Urban Development's (HUD) Baltimore field office. This is the second of three audit reports to be issued on the Authority's program. The audit objective addressed in this report was to determine whether the Authority ensured its program units met housing quality standards.

The Authority failed to ensure that its program units met housing quality standards. We inspected 70 housing units and found that 67 units did not meet HUD's housing quality standards. Moreover, 48 of the 67 units had exigent health and safety violations that the Authority's inspectors neglected to report during their last inspection. The Authority spent $192,821 in program and administrative funds for these 48 units. We estimated that over the next year if the Authority does not implement adequate procedures and controls to ensure that its program units meet housing quality standards, HUD will pay more than $21.7 million in housing assistance on units with material housing quality standards violations.

We recommend that the director of HUD's Baltimore Public Housing Program Hub require the Authority to ensure that housing units inspected during the audit are repaired to meet HUD's housing quality standards, reimburse its program from nonfederal funds for the improper use of $192,821 in program funds for units that materially failed to meet HUD's housing quality standards, and implement adequate procedures and controls to ensure that in the future program units meet housing quality standards to prevent an estimated $21.7 million from being spent annually on units with material housing quality standards violations.