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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Homewood Terrace Mutual Homes’ Section 8 housing assistance payments program due to concerns over poor financial reporting and potentially inappropriate involvement by one of its board members.  Our objective was to determine whether Homewood Terrace conducted timely reexaminations, correctly calculated and requested assistance payments, and verified income information.

We found that Homewood Terrace did not always conduct timely reexaminations, properly request assistance payments, or verify income information.  As a result, HUD paid more than $5,900 in ineligible housing assistance and more than $3,000 for assistance that was not fully supported by the necessary income documentation.  In addition, Homewood Terrace has received approximately $72,000 less in assistance payments than it was entitled.

We recommend that the Director of the Office of Multifamily Housing Programs’ San Francisco Hub require Homewood Terrace to (1) hire,  train and maintain sufficient staff to adequately perform its housing assistance payment functions; (2) repay HUD from non-Federal funds $5,928 in ineligible housing assistance; (3) perform all past-due reexaminations, determine the correct amount of housing assistance due to Homewood Terrace, and adjust the next request for assistance to account for these corrections; and (4) verify the unsupported income amount, reimburse HUD up to $3,087 for any assistance amount that remains unsupported, and adjust the next request for assistance to account for the appropriate amount.