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.
Recommendations
Public and Indian Housing
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Status2017-CH-1003-001-AOpenClosed$25,133.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on April 27, 2021Reimburse 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.
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Status2017-CH-1003-001-BOpenClosed$2,213.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on October 11, 2017Reimburse the appropriate households $2,213 from program administrative fee reserves for the underpayment of housing assistance due to inappropriate calculations.
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Status2017-CH-1003-001-COpenClosedClosed on July 19, 2018
Evaluate its administration of the program and take the appropriate actions to ensure that the program is managed effectively.
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Status2017-CH-1003-001-DOpenClosed$32,960.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on July 19, 2018Implement 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.
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Status2017-CH-1003-002-AOpenClosed$25,231.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on November 05, 2020Reimburse 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.
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Status2017-CH-1003-002-BOpenClosed$296.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on October 11, 2017Support or reimburse its program $296 from non-Federal funds for the unsupported escrow account disbursements.
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Status2017-CH-1003-002-COpenClosed$375.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on October 27, 2017Reimburse the appropriate households $375 from program funds for the underpaid escrow disbursements.
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Status2017-CH-1003-002-DOpenClosed$2,547.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on August 01, 2018Support 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.
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Status2017-CH-1003-002-EOpenClosedClosed on August 01, 2018
Deposit the Family Self-Sufficiency program escrow funds into an interest-bearing account in accordance with HUD’s requirements.
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Status2017-CH-1003-002-FOpenClosedClosed on July 23, 2018
Ensure that the program coordinator is trained on and familiar with HUD’s regulations.
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Status2017-CH-1003-002-GOpenClosedClosed on July 27, 2018
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.
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Status2017-CH-1003-002-HOpenClosedClosed on August 01, 2018
Evaluate its administration of the program to ensure it has the necessary capacity and resources to effectively manage the program.