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Home » Cuyahoga Metropolitan Housing Authority Didn't Operate HCV Program Properly

Cuyahoga Metropolitan Housing Authority Didn't Operate HCV Program Properly

Jun 10, 2012

HUD audited Ohio's Cuyahoga Metropolitan Housing Authority's Section 8 Housing Choice Voucher (HCV) program as part of its 2012 annual audit plan. HUD auditors sought to determine whether the authority administered its program in accordance with applicable HUD requirements and the authority's program administrative plan. Auditors investigated whether the authority: (1) correctly analyzed households' income and performed subsidy determinations in accordance with federal and its own requirements; (2) appropriately followed HUD's and its conflict-of-interest requirements; and (3) administered its program waiting list in accordance with federal and its requirements.

Auditors found that the authority didn't comply with HUD's requirements and its own program administrative plan when issuing housing assistance and utility allowance payments. It failed to consistently compute payments accurately and maintain documentation to support all payments to program owners and households. The authority incorrectly calculated housing assistance and utility allowances for 47 households (58.8 percent) in one or more certifications. Of the 80 household files statistically selected for review, 35 files (43.8 percent) were missing or contained incomplete or late documents. Based on the statistical sample, the auditors estimated that over the next year, the authority will overpay more than $1.4 million in housing assistance and utility allowances.

Furthermore, the authority didn't follow HUD's and its requirements and the Ohio Revised Code regarding conflict-of-interest provisions. The authority's employees failed to identify conflicts of interest with themselves, relatives, business associates, and close friends who were participants in the authority's HCV program as landlords or tenants. Also, the authority failed to ensure that a third-party inspector performed inspections of authority-owned units.

The authority also didn't follow HUD's requirements regarding its waiting list. It inappropriately added applicants to a closed waiting list. And the authority didn't comply with the voluntary compliance agreement it made with HUD's Fair Housing and Equal Opportunity Division. Also, its internal controls for access to the waiting list didn't ensure that the waiting list was reasonably safeguarded against unauthorized use.

HUD auditors recommended that the director of HUD's Cleveland Office of Public Housing require the authority to: (1) reimburse its program from nonfederal funds for the improper use of more than $274,000 in program funds; (2) provide documentation or reimburse its program more than $390,000 from nonfederal funds for the unsupported housing assistance payments; and (3) implement adequate procedures and controls to prevent more than $1.4 million in program funds from being spent on excessive housing assistance payments over the next year.

Finally, HUD auditors also recommended that the director of HUD's Columbus Office of Fair Housing and Equal Opportunity review the authority's household selections to ensure that the authority complies with HUD's requirements. The auditors further recommended that the director: (1) conduct a compliance and technical assistance review for the voluntary compliance agreement to ensure that HUD and the authority understand the expectations of the agreement and appropriately comply with it; and (2) require the authority to submit a status update of its Money Follows the Person Rebalancing Initiative and five-year mainstream housing choice vouchers.

  • HUD Audit Report No. 2012-CH-1006, March 29, 2012
HUD Audits
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