We audited the Civic Towers, LLLP, and Civic Towers Senior, LLLP, Section 8 project-based housing assistance payment (HAP) program. We selected the Civic Towers and Civic Towers Senior Section 8 project-based properties for review based on a referral from our Office of Investigation regarding a potential duplication of benefits between the U.S. Department of Housing and Urban Development (HUD) and the Federal Emergency Management Agency (FEMA). Our audit objective was to determine whether the owners administered the Section 8 project-based housing assistance payment program in accordance with HUD regulations. Specifically, we determined whether (1) any duplication of benefits existed between HUD and FEMA as a result of damage caused by Hurricane Irma and (2) housing assistance payments were paid for eligible tenants and properly supported.
The owners generally corrected its HAP to address duplicated benefits and ensured HAP was eligible and supported. Although we identified units from these projects that were approved for HAP during the same period they received FEMA assistance, the owners made adjustments to account for these periods. However, we identified weaknesses in the relocation process. We also identified four instances in which the HAP was calculated incorrectly due to conflicting income information, miscalculated annual income, underreported tenant income, and an unsupported elderly deduction. These conditions occurred because the owners lacked adequate policies and procedures to fully track displaced tenants and ensure accurate billing to HUD and failed to provide adequate oversight of its contractors responsible for the relocation of tenants and calculation of the HAP. Failing to address these conditions could put future HUD funds at risk in the event of another disaster that results in displaced tenants, and result in HAP miscalculations, unreliable data being reported to HUD, and inaccurate subsidies being paid to the owners.
We recommend that HUD require the owners to (1) revise policies and procedures to address weaknesses in relocation procedures, (2) conduct a review of recertification documents to determine the correct HAP calculations and repay HUD from nonproject funds for any overpayments as a result of the recalculation, and (3) provide appropriate oversight and training to staff to ensure that HAP calculations are accurate and adequately supported.
Recommendations
Housing
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Status2019-AT-1001-001-AOpenClosedClosed on March 02, 2020
Revise policies and procedures to address weaknesses in the owners’ relocation procedures to include adequate oversight and monitoring of contractors responsible for relocation activities, compliance with reporting and tracking requirements, appropriate billing to HUD, and adequate identification of tenants receiving other Federal assistance following natural disasters.
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Status2019-AT-1001-001-BOpenClosed$3,495.00Questioned 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 February 10, 2020Conduct a review of the recertification documents to determine the correct HAP calculations and repay HUD from nonproject funds for any overpayments as a result of the recalculation.
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Status2019-AT-1001-001-COpenClosedClosed on March 02, 2020
Revise procedures to address weaknesses in the owners monitoring procedures to include adequate oversight of contractors and staff hired to manage the daily operations of the project including recertifications.
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Status2019-AT-1001-001-DOpenClosedClosed on December 20, 2019
Provide training to staff to ensure that HAP calculations are accurate and adequately supported.