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We audited the Housing Authority of the City of Durham’s Section 8 Housing Choice Voucher program’s housing quality standards based on our recent audit of the Authority’s program, during which potential issues with the Authority’s inspections were noted, and as part of our annual audit plan.  Our audit objective was to determine whether the Authority ensured that program units met the U.S. Department of Housing and Urban Development’s (HUD) and its own housing quality standards.

The Authority did not always ensure that program units met HUD’s and its own housing quality standards.  Of 75 program units inspected, 69 failed to comply with HUD’s minimum housing quality standards and the Authority’s own requirements, and 40 of those were in material noncompliance with the standards.  For the 40 units in material noncompliance, the Authority’s inspectors failed to observe or report 352 violations that existed when they conducted their last inspections.  As a result, some tenants lived in inadequately maintained units, and the Authority disbursed more than $100,000 in housing assistance payments and received more than $8,000 in administrative fees for the 40 units in material noncompliance.  Unless the Authority improves its inspection program and ensures that all of its units materially meet minimum housing quality standards, we estimate that over the next year, HUD will pay about $7.5 million in housing assistance for units in material noncompliance with the standards.

We recommend that the Director of HUD’s Greensboro Office of Public and Indian Housing require the Authority to (1) reimburse its program more than $108,000 from non-Federal funds for the 40 units that materially failed to meet HUD’s and its own housing quality standards, (2) ensure that all violations cited for the units failing to meet housing quality standards have been corrected, and (3) implement adequate procedures and controls to ensure that all units meet HUD’s and its own housing quality standards to prevent more than $7.5 million in program funds from being spent on units that do not comply with HUD’s requirements over the next year.