We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of its Family Self-Sufficiency (FSS) program. We conducted the audit as part of our annual audit plan. Our objective was to determine whether HUD provided adequate oversight of its program.
HUD did not provide adequate oversight of its FSS program. Specifically, HUD did not ensure that grantees (1) always had action plans that complied with regulations, (2) accurately calculated monthly escrow credits, (3) always reported accurately in its Public Housing Information Center (PIC) database, (4) were adequately monitored by field offices for compliance with regulations, and (5) maintained supporting documentation showing that participants completed contractual agreement requirements. These conditions occurred because HUD (1) did not adequately review grantee action plans to ensure compliance with requirements; (2) did not have adequate policies and procedures for monitoring grantee activities, which included ensuring that grantees properly calculated escrow amounts and maintained supporting documentation; and (3) lacked adequate controls to ensure that data reported in PIC were consistently updated and accurate. As a result, HUD lacked assurance that the program operated effectively and that participants moved toward self-sufficiency once they graduated from the program, a public housing agency made an ineligible escrow payment of $1,520, and program funds totaling $7.8 million were unsupported because the action plans for 12 public housing agencies were incomplete.
We recommend that HUD (1) direct the 12 grantees to correct their action plans to comply with program requirements and submit the corrected plans to HUD for review or repay HUD from non-Federal funds for any of the $7.8 million it received that it cannot support; (2) require the Housing Authority of Brevard County to repay $1,520 in ineligible escrow funds to HUD from non-Federal funds for the program participant that exceeded allowable contract terms; (3) monitor grantees’ efforts for improved accuracy and completeness of PIC program data; (4) develop and implement a plan to monitor grantee FSS programs, including to ensure that escrow accounts are calculated correctly; and (5) develop and implement policies and procedures to ensure that grantees maintain documentation to support program participants’ contractual agreements.