The Houston Housing Authority, Houston, TX, Needs To Improve Its Procurement and Financial Operations and Its Housing Choice Voucher Program Subsidy Determinations

We audited the Houston Housing Authority’s public housing and Housing Choice Voucher programs.  We selected the Authority for review in accordance with our audit plan and based upon risk analyses.  Our objectives were to determine whether the Authority (1) followed U.S. Department of Housing and Urban Development (HUD) requirements when it procured goods and services and incurred miscellaneous expenses, (2) calculated tenant housing assistance payments in accordance with HUD payment standards, and (3) conducted tenant certifications in a timely manner.

The Authority did not follow HUD’s regulations or its own policies when contracting for goods and services and paying for miscellaneous expenses.  This condition occurred because the Authority did not implement adequate internal controls over its procurement and financial operations.  The Authority also did not always use correct payment standards or perform annual tenant recertification’s for its voucher program tenants in a timely manner and in accordance with HUD regulations and its administrative plan.  This condition occurred because the Authority lacked written procedures for applying payment standards and its staff did not understand HUD’s regulations.  Further, its staff turnover and caseloads were high.  As a result, the Authority paid more than $3.2 million in Federal funds for ineligible and unsupported costs.

We recommend that HUD require the Authority to (1) repay more than $183,000 in ineligible expenditures; (2) support or repay more than $3 million in questionable costs; and (3) implement adequate internal controls, including written procedures, to ensure that its procurement and expense payments comply with HUD’s regulations and its own policies.