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Hotline

Report Fraud, Waste and Abuse
November 29, 2007
  • Public and Indian Housing
2008-LA-1002
2008-la-1002.pdf

In response to a hotline complaint, we reviewed the Housing Authority of the City of Napa's (the Authority) Section 8 program. The purpose was to determine whether concerns raised in the complaint relating to misappropriation of Section 8 funds had merit and whether allegations of improper rent increases for the Section 8 Moderate Rehabilitation Single Room Occupancy (Mod Rehab) and Section 8 Housing Choice Voucher programs were valid.

We determined the allegation relating to the misappropriation of Section 8 funds had no merit. However, we found that the Authority improperly increased contract rents for eight units at a Section 8 Mod Rehab project. This condition resulted in the Authority's paying $63,466 in excess housing assistance payments to the owner. Additionally, the Authority did not properly determine reasonable rents for the Section 8 Housing Choice Voucher program units. The Authority's database for the unassisted units, from which comparable units were selected, was inadequate. It contained incomplete, outdated, and unverified data. Therefore, the Authority approved unsupported rents. As a result, it potentially overpaid housing assistance to the owners.

We recommend that the Director of HUD's Office of Public and Indian Housing require the Authority to (1) reimburse the excessive housing assistance payments related to the Section 8 Mod Rehab units, (2) develop and implement written policies, procedures, and controls for administering its Section 8 Mod Rehab program in compliance with HUD regulations, (3) establish procedures and implement controls to ensure that its rent reasonableness determination process is in accordance with HUD rules and regulations, (4) establish procedures and implement controls to ensure the comparable database is up-to-date, complete and verified, and (5) conduct training for all individuals involved in the rent reasonableness determinations.

We also recommend that the Director of HUD's Office of Public and Indian Housing coordinate with the Office of Inspector General for Audit to conduct a post audit verification review to determine whether corrective actions were implemented