We audited the Lexington Housing Authority’s Rental Assistance Demonstration Program (RAD) conversion. We selected the Authority based on concerns from the U.S. Department of Housing and Urban Development’s (HUD) North Carolina State Office of Public Housing and a request from the Housing Authority’s Board of Commissioners. Our audit objective was to determine whether the Authority administered its RAD program in accordance with HUD requirements. Specifically, we focused on whether the Authority (1) maintained adequate financial records, (2) completed timely annual audits, (3) established a waiting list, and (4) ensured tenants were properly certified.
The Authority did not maintain auditable books and records, complete timely annual audits, properly establish waiting lists, and ensure that tenants were certified and eligible for RAD project-based voucher assistance. The Authority’s prior administration disregarded the established guidelines for maintaining auditable records and performing tenants’ recertifications for its RAD units. As a result, the Authority disbursed more than $2.7 million that was not properly supported and spent more than $5,900 on improper RAD project based voucher assistance.
We recommend that the Director of the Greensboro Office of Public and Indian Housing require the Authority to (1) provide documentation for costs or repay more than $2.7 million from non-Federal funds, (2) ensure that the Authority completes all outstanding annual audits, (3) repay from non-Federal funds the $5,912 in ineligible RAD rehabilitation assistance expenditures, (4) develop and implement adequate procedures to ensure that its books and records are properly maintained, and (5) properly certify all tenants and reimburse any overages paid.
Recommendations
Public and Indian Housing
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Status2017-AT-1011-001-AOpenClosedClosed on October 06, 2020
Provide adequate supporting documentation for the amount of Public Housing Capital Fund loan to verify the loan source. If another source of Federal funds is determined, repay the amount to the appropriate program from non-Federal funds.
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Status2017-AT-1011-001-BOpenClosedClosed on May 30, 2023
Provide support showing the amount of predevelopment fees paid. If it is over the allowable amount, that portion should be repaid to the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-COpenClosedClosed on May 17, 2023
Provide support showing the source and use of funds paid to the Terrace Lane, LP, and Southside Village, LP, after the RAD conversion or repay the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-DOpenClosedClosed on March 22, 2019
Develop and implement procedures to ensure that it maintains books and records that provide the source and uses of all Federal funds.
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Status2017-AT-1011-001-EOpenClosedClosed on May 17, 2023
Ensure that the Authority completes all outstanding annual audits.
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Status2017-AT-1011-001-FOpenClosed$5,912.00Questioned 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 December 15, 2022Enter into a repayment agreement with Community Management Corporation for the improper housing assistance payments of $5,912 to be repaid to the project-based voucher program or repay the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-GOpenClosedClosed on March 22, 2019
Establish, maintain, and follow a waiting list for each project individually.
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Status2017-AT-1011-001-HOpenClosed$2,075,314.00Questioned 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 January 17, 2023Provide adequate supporting documentation for the $2,075,314 paid for housing assistance payments for tenant rents for 2015 and 2016 and the associated administrative fees earned or repay the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-IOpenClosedClosed on March 27, 2019
Properly certify all tenants and reimburse any overages paid and associated administrative fees for tenants housed after January 1, 2017, to the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-JOpenClosed$669,938.00Questioned 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 January 17, 2023Provide adequate supporting documentation for $669,938 in monthly RAD rehabilitation assistance it received for vacant units during the period of construction or repay the project-based voucher program from non-Federal funds.
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Status2017-AT-1011-001-KOpenClosedClosed on March 22, 2019
Develop and implement procedures for following project-based voucher requirements for tenant recertifications as project-based voucher tenants at Terrace Lane and Southside Village, and ensure they comply with the Housing Choice Voucher regulations.
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Status2017-AT-1011-001-LOpenClosedClosed on March 22, 2019
Determine whether the households residing in the Authority’s project-based voucher units, that bypassed others on the wait lists, received housing in accordance with the program’s requirements and if not, consider a referral to HUD’s Office of Fair Housing and Equal Opportunity.