We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of enhanced vouchers provided under its Housing Choice Voucher program based on our annual audit plan.  We focused on vouchers administered by three New York agencies because the related subsidies represented 59 percent of the total monthly housing subsidies associated with enhanced vouchers nationwide.  Our objective was to determine whether HUD had adequate oversight related to enhanced vouchers administered by the New York agencies.

HUD did not adequately oversee enhanced vouchers administered by three New York agencies that were responsible for administering most of the funds associated with the vouchers.  The three New York agencies could not fully justify program subsidies they provided to voucher recipients.  Of 28 cases reviewed across the agencies, HUD overpaid subsidies for 15 units (54 percent) that were larger than the family was allowed.  Also, for another 264 families, HUD potentially overpaid subsidies for units that were larger than those families were allowed.  In addition, one of the agencies did not perform rent reasonableness determinations as required for 544 units at 2 of its properties; therefore, the rent charged for the units may not have been reasonable.  As a result, about $1.1 million in program subsidies used for housing assistance payments was unsupported.  In addition, HUD could save approximately $1.2 million over a 1-year period by ensuring that agencies implement policies and procedures to prevent deficiencies.

We recommended that the Deputy Assistant Secretary for Public and Indian Housing Field Operations (1) require the three agencies to justify approximately $1.1 million in program subsidies spent on housing assistance payments and (2) require the agencies to implement policies and procedures to ensure that they make housing assistance payments related to enhanced vouchers in accordance with all applicable requirements and detect and prevent future deficiencies.  We also recommended that the Deputy Assistant Secretary for Public Housing and Voucher Programs develop policies to implement periodic targeted monitoring and related followup procedures for agencies responsible for administering the most funds associated with enhanced vouchers to help prevent potential waste of program funds.