We audited the Sanford Housing Authority’s Section 8 Housing Choice Voucher Programs as a result of problems identified during a technical assistance review performed by the U.S. Department of Housing and Urban Development’s (HUD) North Carolina State Office of Public Housing. Additionally, our audit is in keeping with our annual audit plan to ensure that public housing agencies sufficiently administer HUD’s programs in accordance with regulations and guidance. This is the second and last of two reports we plan to issue on the Authority’s operations. Our audit objective was to determine whether the Authority administered its program in accordance with HUD’s and its own requirements.
The Authority did not administer its program in accordance with HUD regulations and its own requirements. Specifically, it did not ensure that the physical conditions of its units complied with housing quality standards or maintain required eligibility documentation. Also, it made housing assistance payments on an expired project-based contract. These conditions occurred because the Authority did not have adequate policies and procedures or follow its administrative plan. In addition, the former executive director did not provide proper guidance or training. As a result, the Authority disbursed and earned more than $250,000 for improper housing assistance payments and administrative fees and disbursed and earned more than $3,000 in housing assistance payments and administrative fees for files with missing documentation. Unless the Authority improves the administration of its program, we estimate that over the next year, HUD will pay more than $3.3 million in improper housing assistance.
We recommend that the Director of Public and Indian Housing require the Authority to (1) reimburse its program more than $250,000 from non-Federal funds, (2) support or reimburse its program more than $3,000 from non-Federal funds, (3) ensure that all unit violations cited have been corrected and certify that the units meet standards, and (4) develop and implement program controls to address deficiencies cited. We also recommend that the Director of the Departmental Enforcement Center take appropriate administrative action against the Authority’s former executive director.