Indiana PHA Didn’t Always Comply with Housing Choice Voucher Requirements

HUD’s Office of Inspector General (OIG) audited the Housing Authority of the City of Anderson’s Housing Choice Voucher program. The audit found that the PHA didn’t always administer its program in accordance with HUD’s and its own requirements. Specifically, it didn’t comply with HUD’s conflict-of-interest requirements when it failed to obtain the services of an independent third party to perform housing quality standards inspections and rent reasonableness determinations for units owned by entities it substantially controlled. As a result, the auditors found the PHA inappropriately paid more than $645,000 in housing assistance to the entities and earned nearly $62,000 in administrative fees. Further, HUD lacked assurance that the PHA acted in the best interests of its program households.

In addition, the PHA didn’t always ensure that required eligibility documentation was obtained and maintained, housing assistance was appropriately supported and paid, and program funds were properly supported and used for eligible expenditures. It also didn’t ensure that: (1) utility reimbursements were provided to program households; (2) landlords were charged properly for administrative services related to the normal costs of business; (3) households were properly admitted from its waiting list; and (4) exigent housing quality standards deficiencies were corrected within 24 hours. As a result, HUD lacked assurance that the PHA properly managed its program.

Auditors recommended that the director of HUD’s Indianapolis Office of Public Housing require the PHA to: (1) reimburse its program more than $700,000 from non-federal funds for the ineligible housing assistance paid to the entities and the inappropriate program expenditures; (2) support or reimburse its program more than $9,000 from non-federal funds for the unsupported payments; (3) reimburse the appropriate households and landlords nearly $8,000 for the underpayment of utility reimbursements and inappropriate administrative service fees; and (4) implement adequate procedures and controls.

• HUD Audit 2016-CH-1004, July 2016