We completed an audit of Union County's (County) Housing Choice Voucher program, which is administered by its Division of Planning and Community Development. Our audit objectives were to determine whether the County's (1) Housing Choice Voucher program units met housing quality standards; (2) costs charged to the Housing Choice Voucher program were supported and eligible; and (3) controls over the Housing Choice Voucher program, including monitoring of the consultant administering the program, were adequate.

Our inspection of 58 Section 8 units found that 42 units (72 percent) did not meet minimum housing quality standards. Of the 42 units, 21 were in material noncompliance with standards. As a result HUD made housing assistance payments for units that did not meet housing quality standards. We estimate that over the next year, HUD will make housing assistance payments of $762,000 for units in material noncompliance with the standards. In addition, the County's financial and program controls were inadequate. As a result, $83,476 in transfers of funds and salary costs charged are questioned pending an eligibility determination by HUD, while another $21,862 in transfers and salary costs are ineligible.

We recommend that the Director of HUD's New Jersey Office of Public Housing instruct the County to develop and implement procedures (1) to ensure that units meet housing quality standards to prevent an estimated $762,000 from being spent on units that are in material noncompliance, (2) for allocating and charging costs to the Housing Choice Voucher program to include developing a cost allocation plan for salaries, and (3) to ensure that transfers from the Housing Choice Voucher program to other programs are in accordance with regulations.