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Report Fraud, Waste and Abuse
September 29, 2006
  • Public and Indian Housing
2006-CH-1020
2006-CH-1020.pdf

What We Audited and Why

We audited the Rockford Housing Authority's (Authority) Section 8 Housing Choice Voucher program (program). The audit was part of the activities in our fiscal year 2005 annual audit plan. We selected the Authority based upon a risk analysis that identified it as having a high-risk program. Our objective was to determine whether the Authority managed its program in accordance with the U.S. Department of Housing and Urban Development's (HUD) requirements.

What We Found

The Authority's program administration regarding housing assistance and utility allowance payments was inadequate. The Authority did not ensure that its households' files contained required documentation to support its housing assistance and utility allowance payments. Of the 85 files statistically selected for review, 73 did not contain documentation required by HUD and the Authority's program administrative plan to support more than $547,000 in housing assistance and utility allowance payments.

The Authority incorrectly calculated households' payments, resulting in nearly $50,000 in overpayments and more than $2,500 in underpayments for the period October 2003 through November 2005. Based on our statistical sample, we estimate that over the next year the Authority will overpay more than $338,000 in housing assistance and utility allowance payments.

We informed the Authority's interim executive director and the director of HUD's Chicago Office of Public Housing of minor deficiencies through a memorandum, dated September 29, 2006.

Based on our review, the Authority ensured that program units met HUD's housing quality standards.

What We Recommend

We recommend that the director of HUD's Chicago Office of Public Housing require the Authority to provide documentation or reimburse its program from nonfederal funds for the unsupported housing assistance and utility allowance payments and associated administrative fees, reimburse its program from nonfederal funds for the improper use of program funds, reimburse the appropriate households for the underpayment of housing assistance and utility allowance payments, and implement adequate procedures and controls to address the deficiencies cited in this audit report.

For each recommendation without a management decision, please respond and provide status reports in accordance with HUD Handbook 2000.06, REV-3. Please furnish us copies of any correspondence issued because of the audit.