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We audited the Housing Authority of the City of Hammond, IN’s Housing Choice Voucher program based on the activities included in our 2017 annual audit plan and our analysis of risk factors related to the public housing agencies in Region 5’s jurisdiction.  Our audit objective was to determine whether the Authority correctly calculated housing assistance and utility allowances and appropriately managed its Family Self-Sufficiency program.

The Authority did not always correctly calculate housing assistance payments and utility allowances.  As a result, the Authority overpaid more than $17,000 and underpaid more than $2,200 in housing assistance.  If the Authority does not correct its certification process, it could overpay nearly $33,000 in housing assistance over the next year. 

The Authority also did not always appropriately manage its Family Self-Sufficiency program.  As a result, HUD and the Authority lacked assurance that required documentation was complete and accurate.  In addition, the Authority overpaid more than $25,000 and underpaid nearly $400 in escrow funds, and escrow funds totaling nearly $3,000 were unsupported or overfunded. 

We recommend that the Director of HUD’s Indianapolis Office of Public Housing require the Authority to (1) reimburse its program more than $50,000 from non-Federal funds for the ineligible housing assistance payments and inappropriate escrow disbursements; (2) reimburse the appropriate households nearly $2,600 for underpaid housing assistance and escrow disbursements; (3) support or reimburse its program nearly $3,000 from non-Federal funds for the unsupported escrow disbursements and balances in its general ledger and escrow bank account; (4) ensure that nearly $33,000 in program funds is used effectively over the next year; and (5) implement adequate quality controls to correct the findings cited in this audit report.

Recommendation Status Date Issued Summary
2017-CH-1003-001-A Closed July 14, 2017 Reimburse its program $25,133 ($17,174 in housing assistance payments $7,959 in associated administrative fees) from non-Federal funds for the overpayment of housing assistance and utility allowances due to inappropriate calculations.
2017-CH-1003-001-B Closed July 14, 2017 Reimburse the appropriate households $2,213 from program administrative fee reserves for the underpayment of housing assistance due to inappropriate calculations.
2017-CH-1003-001-C Closed July 14, 2017 Evaluate its administration of the program and take the appropriate actions to ensure that the program is managed effectively.
2017-CH-1003-001-D Closed July 14, 2017 Implement adequate quality control procedures to ensure that it correctly calculates housing assistance payments to ensure that $32,960 in program funds is appropriately used for future payments.
2017-CH-1003-002-A Closed July 14, 2017 Reimburse its program $25,231($15,061 in inappropriate graduation payments $10,170 in inappropriate interim disbursements) from non-Federal funds for the incorrect escrow account disbursements.
2017-CH-1003-002-B Closed July 14, 2017 Support or reimburse its program $296 from non-Federal funds for the unsupported escrow account disbursements.
2017-CH-1003-002-C Closed July 14, 2017 Reimburse the appropriate households $375 from program funds for the underpaid escrow disbursements.
2017-CH-1003-002-D Closed July 14, 2017 Support its general ledger and bank account balances or transfer $2,547 ($2,334 for the overfunded general ledger account $213 for the overfunded program bank account) from its Family Self-Sufficiency program account to its Housing Choice Voucher program account for the overfunded accounts cited in the finding.
2017-CH-1003-002-E Closed July 14, 2017 Deposit the Family Self-Sufficiency program escrow funds into an interest-bearing account in accordance with HUD’s requirements.
2017-CH-1003-002-F Closed July 14, 2017 Ensure that the program coordinator is trained on and familiar with HUD’s regulations.
2017-CH-1003-002-G Closed July 14, 2017 Implement quality control procedures to ensure that (1) documentation required by HUD is correctly completed and maintained, (2) escrow account disbursements are appropriate and fully supported, (3) escrow account deposits are correctly calculated and recorded, and (4) the contracts of participation contain information that reflects participants’ current income and family rent amounts. The controls should include procedures for the review and approval of contract extensions and escrow account disbursements.
2017-CH-1003-002-H Closed July 14, 2017 Evaluate its administration of the program to ensure it has the necessary capacity and resources to effectively manage the program.