We audited the Lexington-Fayette Urban County Housing Authority’s Section 8 Housing Choice Voucher program based on our risk assessment of all Kentucky public housing agencies and as part of the activities in our annual audit plan. Our audit objective was to determine whether the Authority administered its program units in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.
The Authority did not always administer its program units in accordance with HUD’s and its own requirements. Specifically, it did not always comply with (1) HUD’s third-party requirements for conducting inspections and rent reasonableness determinations for Authority-owned units, (2) its requirements for conducting unit inspections in a timely manner, and (3) HUD’s housing quality standards for the program units. These conditions occurred because the Authority did not follow HUD’s requirements for performing unit inspections and was not familiar with the requirements for rent reasonableness determinations, the Authority’s inspection software was inadequate for scheduling inspections, and the Authority did not perform the required quality control inspections. As a result, HUD and the Authority lacked assurance that the unit inspections and rent reasonableness determinations were properly conducted and units were eligible to be on the program, and some tenants lived in inadequately maintained units. In addition, the Authority inappropriately paid nearly $147,000 in housing assistance payments and received more than $20,000 in administrative fees for the units cited in this report.
We recommend that the Director of HUD’s Louisville, KY, Office of Public and Indian Housing require the Authority to (1) reimburse its program more than $167,000 from non-Federal funds, (2) coordinate with HUD and provide adequate training to its staff to ensure compliance with HUD’s requirements, (3) upgrade its inspection software system or develop and implement an alternative method for timeliness of unit inspections, (4) perform all housing quality standards quality control inspections as required, and (5) ensure that all violations cited for units failing to meet housing quality requirements have been corrected and certify that the units meet program requirements.
Recommendations
Public and Indian Housing
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Status2018-AT-1006-001-AOpenClosed$124,075.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on May 28, 2020Reimburse its Section 8 Housing Choice Voucher program $124,075 ($108,687 in housing assistance payments and $15,388 in associated administrative fees) from non-Federal funds for the payments related to the Authority-owned units’ inspections not conducted by an independent entity.
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Status2018-AT-1006-001-BOpenClosedClosed on September 09, 2020
Ensure that HUD-approved independent third parties complete unit inspections and determine the rent reasonableness determinations for units it owns or seek an appropriate exemption of program requirements from the HUD Secretary.
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Status2018-AT-1006-001-COpenClosedClosed on September 16, 2019
Provide adequate training to its staff to ensure compliance with Section 8 Housing Choice Voucher program requirements for unit inspections and rent reasonableness determinations.
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Status2018-AT-1006-002-AOpenClosed$37,508.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on May 28, 2020Reimburse its program $37,508 ($33,085 in housing assistance payments and $4,423 in associated administrative fees) from non-Federal funds for failing to perform unit inspections in a timely manner.
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Status2018-AT-1006-002-BOpenClosedClosed on November 08, 2019
Develop and implement procedures, including but not limited to software upgrades, and staff training to ensure that unit inspections are conducted in a timely manner.
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Status2018-AT-1006-002-COpenClosedClosed on November 08, 2019
Develop and implement adequate oversight to ensure that unit inspections are conducted in a timely manner.
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Status2018-AT-1006-003-AOpenClosed$6,084.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on May 28, 2020Reimburse its program $6,084 ($5,553 in housing assistance payments and $531 in associated administrative fees) from non-Federal funds for the units that materially failed to meet HUD’s housing quality standards.
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Status2018-AT-1006-003-BOpenClosedClosed on November 08, 2019
Certify, along with the owners of the 26 units cited in the finding, that the applicable housing quality standards violations have been corrected.
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Status2018-AT-1006-003-COpenClosedClosed on November 08, 2019
Perform all required quality control housing quality standards inspections in compliance with its HUD-approved MTW plan, thus helping to ensure that its inspectors perform housing quality standards inspections in accordance with HUD’s requirements.