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We audited the Pontiac Housing Commission’s Section 8 Housing Choice Voucher program based on our analysis of risk factors relating to the housing agencies in Region 5’s  jurisdiction.  Our objective was to determine whether the Commission complied with Federal, State, or its own requirements regarding its Family Self-Sufficiency program and conflicts of interest.

The Commission did not always administer its Family Self-Sufficiency program in accordance with HUD’s and its own requirements.  Specifically, it did not (1) correctly calculate participants’ escrow balances, (2) ensure that participants’ files contained required documentation, and (3) ensure that its coordinator effectively managed the program.  As a result, the Commission (1) overpaid nearly $107,000 in escrow disbursements, (2) overfunded participants’ escrow accounts by more than $53,000, and (3) underfunded participants’ escrow accounts by more than $6,500.  In addition, HUD and the Commission lacked assurance that more than $177,000 in program and coordinator funds was used appropriately.

Further, the Commission did not ensure that it complied with HUD’s and the State of Michigan’s requirements regarding conflicts of interest.  As a result, HUD and the Commission lacked assurance that more than $47,000 in housing assistance payments was used appropriately.

We recommend that HUD require the Commission to (1) reimburse its program more than $160,000 due to overpaid escrow disbursements and credits; (2) reimburse its program participants whose escrow accounts were understated by more than $6,500; (3) support or reimburse its program nearly $40,000 for the unsupported family self-sufficiency escrow disbursements and credits; (4) support or reimburse HUD more than $137,000 for the unsupported coordinator funds; and (5) support or reimburse its program more than $47,000 for its conflicts of interest.