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Report Fraud, Waste and Abuse
September 30, 2006
  • Public and Indian Housing
2006-CH-1021
2006-CH-1021.pdf

What We Audited and Why

We audited the Housing Authority of the County of Cook's (Authority) Section 8 Housing Choice Voucher program (program). The audit was part of the activities in our fiscal year 2005 annual audit plan. We selected the Authority based upon a risk analysis that identified it as having a high-risk program. Our objective was to determine whether the Authority managed its program in accordance with the U.S. Department of Housing and Urban Development's (HUD) requirements. This is the second of two audit reports of the Authority's program.

What We Found

The Authority's program controls had weaknesses in the areas of housing assistance payment calculations, the Family Self-Sufficiency Program, and household portability. Of the 70 households' files statistically selected for review, the Authority incorrectly calculated housing assistance payments for 26 and lacked supporting documentation regarding admission and selection for five households. This resulted in the Authority paying nearly $28,000 in overpayments of program housing assistance and utility allowances and more than $47,000 in unsupported housing assistance.

The Authority failed to adequately use HUD's Enterprise Income Verification system to determine that reported zero-income households had unreported income resulting in more than $62,000 in improper housing assistance and utility allowance payments. It also did not monitor and correct escrow balances of its Family Self-Sufficiency Program participants and accurately account for payments related to household portability. The Authority took proper abatement actions regarding housing assistance and maintained its waiting lists in accordance with HUD's requirements.

As a result of the deficiencies previously mentioned, program funds were not always used efficiently and effectively, and fewer funds were available to assist low- and moderate-income families on the Authority's waiting list.

What We Recommend

We recommend that the director of HUD's Chicago Office of Public Housing require the Authority to reimburse its program from nonfederal funds for the improper use of program funds, provide support or reimburse its program from nonfederal funds for the unsupported housing assistance payments and related administrative fees, and implement adequate procedures and controls to address the findings cited in this audit report. These procedures and controls should help ensure that more than $3 million in program funds are spent on housing assistance payments that meet HUD's requirements.

For each recommendation without a management decision, please respond and provide status reports in accordance with HUD Handbook 2000.06, REV-3. Please furnish us copies of any correspondence or directives issued because of the audit.