We audited the Housing Choice Voucher program (Voucher program) at the Holyoke Housing Authority (Authority) as part of our fiscal year 2007 annual audit plan. The objective of the audit was to determine whether the Authority administered the Voucher program in accordance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) requirements. Our efforts focused on whether the Authority properly (1) determined tenant eligibility/HAP payment calculations; (2) made and supported rent reasonableness determinations; (3) determined payments for unused sick leave; and (4) allocated costs and accounting for interfund transfer transactions.

The Authority generally administered the Voucher program according to its administrative plan but not always in accordance with its annual contributions contracts and HUD requirements. It did not (1) ensure that the required documentation was maintained to support the eligibility of each tenant and its housing assistance payments, (2) conduct rent reasonableness determinations according to HUD requirements, (3) follow a prudent personnel practice regarding payment for unused sick leave upon the death or retirement of an employee, and (4) always properly allocate costs or account for interfund transfer transactions.

These conditions occurred because the Authority either had not established adequate internal controls or followed the controls that were in place to ensure compliance with its annual contributions contracts and HUD regulations.