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Report Fraud, Waste and Abuse
April 21, 2016
  • Public and Indian Housing
2016-LA-1003
2016-LA-1003.pdf

We audited the Orange County Housing Authority’s Housing Choice Voucher program’s housing quality standards primarily due to the Orange County district attorney’s investigation into allegations that Authority inspectors conducted personal business during the work day.  These allegations resulted in concerns that inspections may not have been thorough to ensure housing units met HUD standards.  Our objective was to determine whether the Authority conducted its inspections in accordance with U.S. Department of Housing and Urban Development (HUD) rules and requirements.

The Authority’s inspections did not adequately enforce HUD’s housing quality standards.  Of the 80 housing units inspected, 42 were in material noncompliance with HUD standards.  For those units, the Authority’s inspectors failed to report 229 deficiencies that existed when they conducted their last inspections.  This condition occurred because the inspectors did not have current and consistent training to ensure that housing units complied with housing quality standards.  In addition, it did not have a complete quality control review process in place to ensure inspections of units met HUD standards.  As a result, some tenants lived in housing that was not up to HUD standards, and the Authority disbursed $217,916 in housing assistance payments for these 42 units.  Unless the Authority provides training to its inspectors and ensures that all of its housing units materially meet minimum housing quality standards, we estimate that over the next year, HUD will pay more than $48.6 million in housing assistance for units that are materially noncompliant with HUD standards.

We recommend that the Director of HUD’s Los Angeles Office of Public Housing require the Authority to (1) reimburse its program $217,916 from non-Federal funds for the 42 units that materially failed to meet HUD standards; (2) certify that the identified deficiencies have been corrected for the units cited; (3) ensure that its inspectors are provided up-to-date and consistent training on conducting inspections, which will prevent more than $48.6 million in program funds from being spent on housing that does not meet HUD standards over the next year; and (4) develop and implement quality controls, which ensure that housing complies with HUD standards.