What We Audited and Why
We audited the Orange City Housing Authority's (Authority) Housing Choice Voucher program because a regional risk assessment ranked the Authority fifth on our list of potential public housing authority audits in New Jersey.
Our audit objectives were to determine whether (I) the Authority's Housing Choice Voucher program units met housing quality standards; (2) costs charged to the Housing Choice Voucher program were eligible and properly supported; and (3) rental assistance payments were properly calculated, and application and recertification information was properly verified.
What We Found
Our inspection of 59 Section 8 units found that 55 units (93 percent) did not meet minimum housing quality standards. Of the 55 units, 37 were in material noncompliance with standards. As a result, tenants lived in units that were not decent, safe, and sanitary, and HUD made housing assistance payments for units that did not meet housing quality standards. We estimate that over the next year, HUD will make housing assistance payments of more than $1.7 million for units in material noncompliance with standards.
The Authority did not always allocate expenses accurately to the Housing Choice Voucher program. As a result, costs were charged to the Housing Choice Voucher program that was not adequately supported.
In addition, the Authority did not always calculate its housing assistance payments correctly and obtain the necessary supporting documentation related to tenant recertifications. As a result, three landlords either received a housing assistance overpayment or underpayment, and tenant files contained deficiencies related to missing or incomplete forms and documents.
What We Recommend
We recommend that the director of the New Jersey Office of Public Housing instruct the Authority to (1) follow its administrative plan to ensure that units meet housing quality standards and ensure that corrective action has been taken on those units that failed to meet standards, (2) develop procedures and controls to include a cost allocation plan and personnel activity reports for allocating and charging costs to the Housing Choice Voucher program, (3) provide documentation for all unsupported cost and reimburse any cost determined to be ineligible, and (4) establish proper quality assurance procedures for housing choice voucher recertifications and ensure that all voucher information for tenants and landlords is adequately supported and documented.
For each recommendation without a management decision, please respond and provide status reports in accordance with HUD Handbook 2000.06, REV-3. Also, please furnish us copies of any correspondence or directives issued because of the audit.