We audited the Wilmington Housing Authority’s (Authority) administration of its housing quality standards inspection program for its Section 8 Housing Choice Voucher program as part of our fiscal year 2009 audit plan. The audit objective was to determine whether the Authority adequately administered its Section 8 housing quality standards inspection program to ensure that its program units met housing quality standards in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.

The Authority did not adequately administer its inspection program to ensure that its program units met housing quality standards as required. We inspected 60 housing units and found that 52 units did not meet HUD’s housing quality standards. Moreover, 37 of the 52 units materially failed to meet housing quality standards. The units had significant health and safety violations that the Authority’s inspectors did not observe or report during their last inspection. The Authority spent $66,934 in program and administrative funds for these 37 units.

We estimate that over the next year if the Authority does not implement adequate procedures and controls to ensure that its program units meet housing quality standards, HUD will pay more than $1.9 million in housing assistance on units with material housing quality standards violations.