The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s monitoring of the community service and self-sufficiency requirement (CSSR)  to determine the extent to which HUD subsidized public housing units occupied by noncompliant tenants and housing for tenants whose CSSR status was misreported.

We found that HUD subsidized housing for 106,000 units occupied by noncompliant tenants, out of nearly 550,000 potentially CSSR-eligible units nationwide.  Out of the nearly 740,000 adult tenants living in these units, HUD’s system contained incorrect CSSR status codes for 201,000 tenants.  As a result, HUD paid more than $37 million in monthly subsidies for public housing units occupied by noncompliant tenants that otherwise could have housed compliant households.

We recommend that HUD develop and implement a written monitoring policy for CSSR to ensure that housing authorities comply with the Quality Housing and Work Responsibility Act of 1998 so that more than $448.5 million in public housing operating subsidies will be put to better use over the next year.  We also recommend that HUD create clarifying guidance for housing authorities, develop training, apply penalties or sanctions against housing authorities that house ineligible households, produce improved monitoring reports for field offices, and fix the error codes resulting from Form HUD-50058 submissions.