What We Audited and Why

We audited the Kankakee County Housing Authority's (Authority) Low-Rent Housing program. The audit was conducted in response to a citizen's complaint to our office and was part of our comprehensive audit of the Authority. The objective of our audit was to determine whether the Authority administered its Low-Rent Housing program in an efficient and effective manner. We determined whether the Authority had adequate procedures and controls over its subsidy requests, preventive maintenance, admission and occupancy, personnel practices, and Turnkey III Homeownership Opportunity program.

What We Found

The Authority

• Improperly included an average of five to seven Turnkey III units in its calculation of its Low-Rent Performance Funding Operating Subsidy since 1997, which resulted in the Authority receiving excess operating subsidy totaling $119,376.
• Did not follow its Annual Contributions Contract with the U.S. Department of Housing and Urban Development (HUD) to implement an effective maintenance program. This contributed to the Authority having 16 Low-Rent units vacant for longer than 18 months, which resulted in lost rental proceeds of more than $69.000.
• Failed to improve its Low-Rent Housing program's admission and occupancy controls regarding maintaining proper documentation in tenant files, conducting timely re-examinations, accurately calculating total tenant payments, and assigning proper unit sizes for tenants.
• Did not follow its personnel policies related to maintaining documentation in personnel files, conducting performance appraisals in a timely manner, and properly administering personnel benefits.
• Failed to provide adequate oversight of its Turnkey III Homeownership Opportunity program. It lacked adequate controls to properly manage the program, such as maintaining accurate records and ensuring that only eligible tenants receive the program's benefits.

What We Recommend

We recommend that HUD's Director of Public Housing Hub, Chicago Regional Office, require the Authority to (1) reduce its Low-Rent Performance Funding Operating Subsidy for the inappropriately used monies and (2) implement procedures and controls to correct the weaknesses cited in this report.

For each recommendation without a management decision, please respond and provide status reports in accordance with HUD Handbook 2000.05, REV-3.

Please furnish us copies of any correspondence or directives issued because of the audit.