PHA Didn't Administer Its Section 8 Project-Based Voucher Program Properly

HUD’s Office of Inspector General (OIG) selected a PHA for audit based on a referral from HUD’s Office of Labor Standards Enforcement in Seattle. The referral alleged that when the PHA assigned 24 project-based vouchers to the recently constructed site, it didn’t properly execute an Agreement To Enter Into Housing Assistance Payments Contract (forms HUD-52531-A and HUD-52531-B) with the owner. The PHA told auditors that it treated all of its project-based voucher projects that also received assistance through the Sound Families Initiative the same. Therefore, OIG reviewed all of the PHA’s Sound Families Initiative projects. The Sound Families Initiative is a Gates Foundation program to provide a coordinated response to family homelessness backed by a reliable funding stream. OIG’s objective was to determine whether the PHA executed agreements for newly constructed or rehabilitated projects.

Auditors found that the PHA didn’t execute the required agreements with owners of eight of nine newly constructed or rehabilitated projects that received Section 8 project-based vouchers and Sound Families Initiative funds. As a result, it didn’t ensure that owners followed federal requirements before and during construction of the projects.

OIG recommended that the Director of HUD’s Seattle Office of Public Housing review the PHA’s non-Sound Families Initiative project-based voucher projects to determine whether it executed the agreement with the owners of new construction projects and assist the PHA in obtaining any training needs identified by this review. OIG also recommend that until the director believes the PHA understands and is consistently complying with the requirements, the director should require the PHA to submit evidence, and its board of directors to certify, that it has complied with regulatory requirements for each new project-based voucher project.

• HUD Audit 2017-SE-1002