We audited the Puerto Rico Department of Housing’s Section 8 Housing Choice Voucher program’s housing quality standards as part of the activities in our fiscal year 2014 audit plan. We selected the Department because it had a large program receiving more than $54 million in 2014. Our main audit objective was to determine whether the Department’s inspection process adequately ensured that its units complied with the U.S. Department of Housing and Urban Development’s (HUD) housing quality standards.
The Department’s inspections were not adequate for enforcing HUD’s housing quality standards. Of 94 program units inspected, 64 failed to comply with HUD’s minimum housing quality standards, and 35 of those were in material noncompliance with the standards. For the 35 units in material noncompliance, the Department’s inspectors failed to observe or report 166 violations that existed when they conducted their last inspections. In addition, 44 inspections were not performed in a timely manner. As a result, some tenants lived in inadequately maintained units, and the Department disbursed $101,152 in housing assistance payments and received $11,063 in administrative fees for the 35 units in material noncompliance with HUD standards. Unless the Department improves its inspection program and ensures that all of its units materially meet minimum housing quality standards, we estimate that over the next year, HUD will pay about $19.3 million in housing assistance for units in material noncompliance with the standards.
We recommend that HUD require the Department to (1) reimburse its program more than $112,000 from non-Federal funds for the 35 units that materially failed to meet HUD’s requirements, (2) ensure that all violations cited for the units failing to meet housing quality standards have been corrected and certify that the units meet the standards, and (3) improve its quality control inspection program to ensure that all units meet HUD’s housing quality standards and prevent more than $19.3 million in program funds from being spent on units that do not comply with HUD’s requirements over the next year.