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Report Fraud, Waste and Abuse
July 07, 2017
  • Public and Indian Housing
2017-CH-1002
2017-CH-1002.pdf

We audited the Youngstown Metropolitan Housing Authority’s Housing Choice Voucher program based on the activities included in our 2016 annual audit plan and our analysis of risk factors related to the public housing agencies in Region 5’s jurisdiction.  Our audit objective was to determine whether the Authority appropriately managed its Family Self-Sufficiency program and Housing Choice Voucher program files in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements.

The Authority failed to appropriately manage its Family Self-Sufficiency program.  As a result, HUD and the Authority lacked assurance that (1) program participants benefited from the program or made progress toward self-sufficiency, (2) escrow balances and monthly escrow deposits totaling nearly $60,000 in HUD’s and its own systems were accurate and reliable, and (3) more than $400,000 in coordinator grant funds and escrow disbursements were used appropriately.  In addition, it inappropriately disbursed more than $23,000 in program funds for ineligible program graduates.  If the Authority does not develop and implement adequate procedures and controls for its program, it could inappropriately use nearly $128,000 in coordinator grant funds over the next year.

The Authority did not always comply with HUD’s and its own requirements for its Housing Choice Voucher program files.  Specifically, it did not always correctly calculate and support housing assistance payments and perform household reexaminations in a timely manner.  As a result, the Authority inappropriately paid nearly $32,000 and had nearly $2,000 in unsupported housing assistance payments.  If the Authority does not correct its certification process, it could overpay nearly $323,000 in housing assistance over the next year.

We recommend that the Director of HUD’s Cleveland Office of Public and Indian Housing require the Authority to (1) support or reimburse its programs from non-Federal funds for escrow calculations and disbursements, coordinator grant funds, and housing assistance payments; (2) reimburse its programs from non-Federal funds for the ineligible escrow disbursements and housing assistance payments; (3) ensure that program funds are used effectively; and (4) implement adequate procedures and controls to correct the findings cited in this audit report.
 

Recommendation Status Date Issued Summary
2017-CH-1002-001-A Closed July 07, 2017 Reconcile the $58,457 difference among its system report and subsidiary ledger and the information reported in HUD’s system ($1,944 in monthly escrow deposits $521 difference in monthly escrow deposits between HUD’s system and the amount reported in the Voucher Management system the average difference of $55,992 in total escrow account balances) to ensure that the monthly escrow deposits and total escrow balances are appropriately reported in HUD’s system and provide the supporting documentation to HUD.
2017-CH-1002-001-B Closed July 07, 2017 Reconcile the current program participants and related information in its internal systems with the current participants listed in HUD’s systems.
2017-CH-1002-001-C Closed July 07, 2017 Transfer $4,684 from its Housing Choice Voucher program account to its program account for the 12 participants with underfunded escrows.
2017-CH-1002-001-D Closed July 07, 2017 Support or transfer $17,266 from its program account to its Housing Choice Voucher program for the 11 unsupported escrow calculations cited in this finding.
2017-CH-1002-001-E Closed July 07, 2017 Transfer $7,574 from its program account to its Housing Choice Voucher program account for the five participants with overfunded escrows.
2017-CH-1002-001-F Closed July 07, 2017 Support or reimburse its Housing Choice Voucher program $6,839 from non-Federal funds for the one unsupported interim disbursement and five unsupported graduation disbursements cited in this finding.
2017-CH-1002-001-G Closed July 07, 2017 Reimburse its Housing Choice Voucher program $23,475 from non-Federal funds for the two ineligible interim and three ineligible graduation disbursements cited in this finding.
2017-CH-1002-001-H Closed July 07, 2017 Reimburse two participants $7,076 from its Housing Choice Voucher program account for the underfunded graduation payments cited in this finding.
2017-CH-1002-001-I Closed July 07, 2017 Ensure that it obtains a separate interest-bearing depository account for its program participants’ escrow funds in accordance with HUD’s requirements.
2017-CH-1002-001-J Closed July 07, 2017 Ensure that its staff is appropriately trained and familiar with HUD’s requirements and its program action plan regarding the administration of its program to ensure that (1) participants’ contracts of participation and individual training and services plans are properly updated and contain the necessary signatures; (2) changes in participants’ files are properly identified and notated; and (3) participants are notified of changes in their monthly escrow deposits, total escrow balances, or both.
2017-CH-1002-001-K Closed July 07, 2017 Develop and implement procedures and controls to ensure that (1) documentation required by HUD and its own action plan is correctly completed, documented, and updated; (2) escrow account balances are correctly calculated and disbursed; and (3) escrow accounts and disbursements are fully supported to ensure that $127,544 in coordinator grant funds is appropriately used over the next year.
2017-CH-1002-001-L Closed July 07, 2017 Determine the amount of the $387,507 in coordinator grant funds that was appropriately earned by the Authority for meeting requirements. The funds that are determined to be unearned should be reimbursed to HUD from non-Federal funds.
2017-CH-1002-001-M Closed July 07, 2017 Review the Authority’s graduate documentation and adjust the Authority’s minimum program size as necessary.
2017-CH-1002-001-N Closed July 07, 2017 Review the Authority’s Section Eight Management Assessment Program scores for the Family Self-Sufficiency program and adjust as necessary.
2017-CH-1002-001-O Closed July 07, 2017 Provide technical assistance and guidance to the Authority to ensure that it properly administers its Family Self-Sufficiency program.
2017-CH-1002-002-A Closed July 07, 2017 Reimburse its program $34,666 from non-Federal funds ($21,990 $12,676 in administrative fees) for the overpayment of housing assistance due to inappropriate calculations of housing assistance.
2017-CH-1002-002-B Closed July 07, 2017 Reimburse the appropriate households $1,265 from program funds for the underpayment of housing assistance due to inappropriate calculations.
2017-CH-1002-002-C Closed July 07, 2017 Pursue collection from the applicable households or reimburse its program $9,644 from non-Federal funds for the overpayment of housing assistance due to unreported or underreported income.
2017-CH-1002-002-D Closed July 07, 2017 Support or reimburse its program $1,666 from non-Federal funds for the unsupported payments of housing assistance cited in this finding.
2017-CH-1002-002-E Closed July 07, 2017 Implement adequate procedures and controls to ensure that (1) housing assistance payments are appropriately calculated and supported, (2) repayment agreements are created to recover overpaid housing assistance when unreported income is discovered during the examination process, and (3) annual reexaminations are completed in a timely manner to ensure that $322,550 in program funds is appropriately used for future payments.