The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Public Housing Agency of the City of Saint Paul’s (Agency) Section 8 Project-Based Voucher program (program). The audit was part of the activities in our fiscal year 2009 annual audit plan. We selected the Agency’s program based upon our internal audit survey of HUD’s oversight of the program and our analysis of risk factors relating to the housing agencies in Region V’s jurisdiction. Our objective was to determine whether the Agency effectively administered its program in accordance with HUD’s and its own requirements.
The Agency needs to improve the administration of its program. It was unable to provide documentation showing that it conducted initial inspections before executing housing assistance payments contracts to support more than $1.3 million in housing assistance and utility allowance payments. The Agency also did not ensure that more than $12,000 in duplicate housing assistance payments were not made to owners of program projects. Additionally, it did not obtain subsidy layering reviews of program projects as required by HUD’s regulations.
The Agency substantially complied with HUD’s and its requirements regarding housing assistance payments calculations. However, the Agency incorrectly calculated households’ payments, resulting in more than $7,200 in overpayments and more than $9,500 in underpayments for the period January 1, 2007, through December 31, 2008.
We informed the Agency’s executive director and the Director of HUD’s Minneapolis Office of Public Housing of minor deficiencies through a memorandum, dated September 24, 2009.
We recommend that the Director of HUD’s Minneapolis Office of Public Housing require the Agency to reimburse its program from nonfederal funds for the improper use of more than $26,000 in program funds, provide documentation or reimburse its program more than $1.3 million, and implement adequate procedures and controls to address the findings cited in this audit report.