We audited the Moline Housing Authority’s Section 8 program as part of the activities in our fiscal year 2013 annual audit plan.  We selected the Authority based on a citizen’s complaint to our office.  Our objective was to determine whether the Authority administered its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.

The Authority did not always comply with HUD’s requirements and its own administrative plan regarding the administration of its Section 8 program.  Specifically, it did not (1) correctly calculate and process housing assistance payments, (2) maintain required eligibility documentation, and (3) ensure that assisted units were affordable.  As a result of the Authority’s noncompliance, it had (1) more than $47,000 in overpayments, (2) nearly $221,000 in unsupported payments, and (3) more than $6,000 in underpayments.  Further, households paid nearly $26,000 for assisted units that were not affordable.

The Authority inappropriately used Federal funds to pay ineligible expenditures.  As a result, more than $31,000 in Federal funds was not available for eligible program use.

We recommend that the Acting Director of HUD’s Chicago Office of Public Housing require the Authority to (1) reimburse its program nearly $70,000 from non-Federal funds, (2) support or reimburse its program nearly $221,000 from non-Federal funds, (3) pursue repayment or reimburse its program nearly $8,000 from non-Federal funds, (4) reimburse its households or landlords more than $32,000, and (5) implement adequate controls to address the findings cited in this audit report.