We initiated this audit as part of our annual audit plan to determine whether the State of Connecticut Department of Social Services (agency) properly administered its Housing Choice Voucher program (Voucher program) in compliance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) regulations. Our objectives focused on whether tenant eligibility, rent determinations, and annual reexaminations were performed in accordance with HUD requirements and the associated housing assistance payments were adequately supported. This is the second of three planned audit reports issued regarding the agency's Voucher program.

The agency did not comply with HUD requirements in the administration of its Voucher program. Specifically, our review of 66 tenant files found that the agency's contractor did not adequately support tenant eligibility, properly calculate rent payments, or always perform timely annual reexaminations for 49 of the tenants. As a result of these errors, the agency paid $194,821 in unsupported rent and $31,971 in overpaid rent and underpaid $9,269 in rent to landlords and limited-income households This amount includes housing assistance payments and utility reimbursements. for these 49 tenant files. Based on our testing, we estimate that errors may exist in 74 percent (or 4,558) of the 6,139 files in our universe.

We recommend that the Public Housing Program Center Coordinator require the agency to support or reimburse its program $194,821 for unsupported rent payments, reimburse its program $31,971 for ineligible rent payments, reimburse $9,269 for rent underpayments to tenants and landlords, and implement a corrective action plan.