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Report Fraud, Waste and Abuse
September 30, 2010
2010-FW-0004
ig1060004.pdf

We audited the Disaster Housing Assistance Program (DHAP)-Ike as part of our ongoing commitment to the U. S. Department of Housing and Urban Development (HUD) to implement oversight of Disaster Recovery funds to prevent fraud, waste, and abuse. HUD used local public housing agencies (housing agencies) to administer DHAP-Ike rental assistance and provide case management services to families affected by Hurricanes Ike and Gustav.
Our audit objective was to determine whether HUD ensured that four housing agencies in Texas1 correctly calculated and paid DHAP-Ike payments to eligible tenants and for eligible units in accordance with program requirements.

HUD did not ensure that the four housing agencies in Texas that received the most assistance followed DHAP-Ike requirements for 51 (75 percent) of the 68 active files reviewed. Further, for 27 (40 percent) of the 68 files reviewed, the housing agencies’ errors affected the payment or tenant/unit eligibility. These errors occurred because HUD relied on its contractors, did not provide standardized file guidance to the housing agencies, and only performed limited monitoring at the housing agencies. Projecting the results of the statistical sample showed that of the 9,817 families assisted by the four housing agencies, at least 6,374 (65 percent) of the families likely had an error in their file and at least 2,920 (30 percent) of the families’ payments or eligibility was affected.

We recommend HUD perform additional monitoring of its contractor, provide standardized guidance to the housing agencies, and perform onsite monitoring at the housing agencies. We also recommend that HUD require the four housing agencies to correct the file documentation errors in the 51 identified files and repay or support the 27 questioned payments totaling $48,982.
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.