We audited the Louisville Metro 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 administer its program units in accordance with HUD’s and its own requirements. Due to an inadequate quality control inspections process, the Authority did not ensure that 103 of 106 (97 percent) program units inspected met HUD’s or its own housing quality requirements, and 44 of the 103 units were found to be in material noncompliance with the requirements. In addition, for abatement of housing assistance payments and determination of rent reasonableness and owner eligibility, the Authority did not always comply with HUD’s and its own requirements. These conditions occurred because the Authority lacked written procedures for its staff to follow in performing their respective duties. As a result, some tenants lived in inadequately maintained units, and the Authority disbursed more than $65,500 in housing assistance payments and received more than $7,800 in administrative fees for the units in noncompliance with program requirements. Unless the Authority improves its inspection program and ensures that all of its units meet housing quality requirements, we estimate that over the next year, HUD will pay more than $20.5 million in housing assistance for units in material noncompliance with requirements.
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 $73,000 from non-Federal funds, (2) ensure that all violations cited for units failing to meet housing quality requirements have been corrected and certify that the units meet program requirements, and (3) develop and implement adequate controls and written procedures to address deficiencies cited and prevent more than $20.5 million in program funds from being spent over the next year on units that do not materially comply with program requirements.
Recommendations
Public and Indian Housing
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Status2017-AT-1010-001-AOpenClosed$70,992.00Questioned 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 March 15, 2019Reimburse the program $70,992 ($63,312 $7,680) from non-Federal funds for housing assistance payments made and administrative fees received for the units that materially failed to meet HUD’s housing quality standards.
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Status2017-AT-1010-001-BOpenClosedClosed on March 15, 2019
Certify, along with the owners of the 103 units cited in the finding, that the applicable housing quality standards violations have been corrected.
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Status2017-AT-1010-001-COpenClosedClosed on March 27, 2019
Develop and implement adequate policies and procedures for conducting quality control inspections in accordance with HUD’s requirements.
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Status2017-AT-1010-001-DOpenClosed$20,566,345.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on March 15, 2019Develop and implement adequate procedures and controls to ensure that its quality control inspection program functions properly to include adequately monitoring the inspection contractor to prevent $20,566,345 in program funds from being spent over the next year on units that do not materially comply with requirements.
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Status2017-AT-1010-002-AOpenClosed$2,492.00Questioned 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 March 15, 2019Reimburse the program $2,492 ($2,286 in housing assistance payments and $206 in administrative fees received) from non-Federal funds for rental subsidies not abated on four units.
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Status2017-AT-1010-002-BOpenClosedClosed on August 06, 2019
Complete a review of rental subsidy abatements for all current units for which a retroactive abatement was not conducted. The Authority should reimburse the program from non-Federal funds for any overpaid rental subsidy.
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Status2017-AT-1010-002-COpenClosedClosed on March 15, 2019
Develop and implement written procedures and a process for retroactively abating housing assistance payments.
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Status2017-AT-1010-002-DOpenClosedClosed on March 25, 2019
Complete a rent reasonableness determination for all current units for which a determination was required but not completed. The Authority should reimburse the program from non-Federal funds for any overpaid rental subsidy.
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Status2017-AT-1010-002-EOpenClosedClosed on March 27, 2019
Develop and implement written procedures to ensure that a rent reasonableness determination is performed before rent increases are approved.
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Status2017-AT-1010-002-FOpenClosedClosed on October 31, 2018
Complete a review that owners of current assisted units are not debarred, suspended, or subject to a limited denial of participation.
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Status2017-AT-1010-002-GOpenClosedClosed on March 15, 2019
Develop and implement written procedures for conducting a complete owner eligibility determination.
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Status2017-AT-1010-002-HOpenClosedClosed on March 27, 2019
Provide adequate training to its staff to ensure compliance with HUD’s requirements for program units.