oversight

Housing Authority of the City of Greeley and Weld County Housing Authority, Greeley, Colorado

Published by the Department of Housing and Urban Development, Office of Inspector General on 2004-06-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                AUDIT REPORT




     HUD Low-Rent and Section 8 Housing Choice
               Voucher Programs
Housing Authority of the City of Greeley and Weld County
          Housing Authority, Greeley, Colorado

     Tenant Selection and Continued Occupancy Activities

                       2004-DE-1003

                        June 22, 2004

     U.S. Department of Housing and Urban Development
               Regional Inspector General for Audit
                   1670 Broadway 24TH Floor
                 Denver, Colorado 80202-4825
                                                                Issue Date
                                                                         June 22, 2004
                                                                Audit Case Number
                                                                         2004-DE-1003




TO: Linda J. Camblin, Director, Office of Public Housing, 8APH




FROM: Robert C. Gwin, Regional Inspector General for Audit, 8AGA

SUBJECT: Tenant Selection and Continued Occupancy Activities
         HUD Low-Rent Public Housing and Section 8 Housing Choice Voucher Programs
         Housing Authority of the City of Greeley and Weld County Housing Authority
         Greeley, Colorado

We have completed an audit of the Low-Rent Public Housing and Section 8 Housing Choice
Voucher Programs for the Housing Authority of the City of Greeley and the Weld County Housing
Authority respectively. Our review focused on tenant selection and continued occupancy activities
based on information we received concerning allegations of improprieties in these areas. The
Housing Authority of the City of Greeley through a consortium agreement with HUD administers
these program activities for both housing authorities. The objective of our review was to determine
whether the housing authorities were conducting their tenant selection and continued occupancy
activities for the two HUD programs in conformity with HUD requirements and their own adopted
policies and procedures.

We reviewed tenant occupancy activities for 20 current and former tenants of the Greeley
Housing Authority Low-Rent Public Housing Program. We also reviewed tenant occupancy
activities for 10 participants each for both the Greeley and the Weld County Housing
Authorities’ Section 8 Housing Choice Voucher Programs. Our review resulted in two findings
along with issues needing further study and consideration

In accordance with HUD Handbook 2000.06, REV-3, within 60 days please provide us, for each
recommendation without a management decision, a status report on: (1) the corrective action
taken; (2) the proposed corrective action and the date to be completed; or (3) why action is
considered unnecessary. Additional status reports are required at 90 days and 120 days after
report issuance for any recommendation without a management decision. Also, please furnish us
copies of any correspondence or directives issued because of the audit.
Management Memorandum

We appreciate the courtesies and assistance extended by the management and staff of both the
Greeley and Weld County Housing Authorities, and the HUD Region 8 Office of Public Housing.

Should you or your staff have any questions, please contact Ernest Kite, Assistant Regional
Inspector General for Audit, at (303) 672-5452.




2004-DE-1003                                ii
Executive Summary
We have completed an audit of the Low-Rent Public Housing and Section 8 Housing
Choice Voucher Programs for the Housing Authority of the City of Greeley (GHA) and the
Weld County Housing Authority (WCHA). Our review focused on tenant selection and
continued occupancy activities based on information we received concerning allegations of
improprieties in these areas. The Greeley Housing Authority through a consortium
agreement with HUD administers these program activities for both Housing Authorities.
The objective of our review was to determine whether the Housing Authorities tenant
selection and continued occupancy activities were administered in conformity with HUD
requirements and their own adopted policies and procedures.

Our audit disclosed the need to improve the administration of the Housing Authorities’
tenant selection and continued occupancy activities. Operating procedures did not ensure
that only eligible tenants were being assisted under the HUD programs and that tenants
were paying or receiving the proper assistance amounts. Specifically, our review disclosed
that management controls over the tenant admissions and continued occupancy
requirements were not sufficient to ensure that the applicable Housing Authority properly:

•        Determined applicant eligibility and rent/assistance payments;

•        Implemented the GHA Income Disregard Program;

•        Implemented the GHA Low-Rent applicant waiting list procedures;

•        Administered tenant repayment agreements;

•        Established/collected security deposits from GHA Low-Rent Program tenants; and

•        Determined the WCHA monthly Section 8 administrative fees.

During our review, several areas relating to the accounting for tenant service charges and
tenant account receivables were identified that need further review and corrective action.



                                    The GHA has an Admissions and Continued Occupancy
    Deficient controls over         Policy for its Low-Rent Housing Program that identifies
    Low-Rent tenant                 procedures to be followed in determining tenant eligibility,
    admissions and continued        prorating rent, administering the GHA Income Disregard
    occupancy activities            Program, waiting list procedures, administration of
                                    repayment agreements, and the collection of security
                                    deposits. Tenant eligibility deals with the tenant
                                    identification and documentation of program eligibility by
                                    having the necessary Social Security Cards and citizen or
                                    resident immigration status support. We found information
                                    was not properly documented or supported to show that
                                    GHA Low-Rent tenants were eligible for assisted housing



                                          iii                                    2004-DE-1003
Executive Summary

                             or the amount of rental charges were correct. Second,
                             tenants participating in the GHA Income Disregard
                             Program were being undercharged their housing rent.
                             Third, the GHA Low-Rent tenant waiting lists were not
                             being correctly maintained with some tenant applicants
                             being provided housing that did not meet the Housing
                             Authority’s tenant selection criteria. Fourth, the
                             administration of tenant repayment agreements was not
                             consistently applied and failed to follow the Housing
                             Authority’s established procedures. Last, the Housing
                             Authority’s collection of tenant security deposits was not
                             consistently applied and was contrary to its adopted tenant
                             admission procedures. As a result, GHA provided Low-
                             Rent public housing assistance to ineligible applicants.
                             Additionally, tenants were not charged the correct rent
                             amounts and related security deposits. Also, deviation
                             from the Authority’s established occupancy procedures
                             could be construed as showing favoritism for certain
                             tenants.

                             The GHA and WCHA have an Administrative Plan for
 Inadequate administration   administering their Section 8 Housing Choice Voucher
 of Section 8 Housing        Program that identifies procedures to be followed in
 Choice Voucher Program      determining tenant eligibility, prorating assistance amounts
 Occupancy and related       and administering repayment agreements. However, we
 activities                  found that the Housing Authorities were not properly
                             determining and documenting that tenant family members
                             were eligible citizen or immigrants before Section 8
                             assistance was provided, and in some cases the amount of
                             financial assistance provided was incorrectly calculated. In
                             fact, we identified three families receiving assistance that
                             did not meet eligibility requirements. We also found that
                             GHA was not administering its tenant repayment
                             agreements in a consistent manner and within the
                             provisions of its Administrative Plan. Last, the WCHA
                             was not properly determining and/or documenting the
                             Section 8 administrative fee charged HUD.

                             Our review showed that Housing Boards of Commissioners
 Recommendations             policies were not followed or enforced. This occurred
                             because appropriate management oversight and control
                             procedures have not been established to ensure compliance
                             with HUD requirements and the authorities own policies
                             and procedures. The majority of the functions connected
                             with the administration of the Low-Rent Housing and the
                             Section 8 Housing Choice Voucher Programs were vested


2004-DE-1003                       iv
                                                           Executive Summary

                   in one individual for each Housing Authority. Without any
                   oversight and monitoring system in place, the Housing
                   Authorities have limited assurance that the requirements for
                   the two HUD programs were being properly and uniformly
                   implemented. We recommend HUD require the Housing
                   Authorities to establish the necessary management controls
                   over its operations to ensure it functions in accordance with
                   HUD requirements and within the Housing Authorities’
                   adopted policies. Specific recommendations are provided
                   with each finding.

                   Finding outlines were provided to the Housing Authorities
Auditee Comments   during the course of the audit. On April 30, 2004, the
                   Housing Authorities received a copy of the draft audit
                   report for comment. We received the Housing Authorities’
                   response on June 4, 2004.

                   We have included pertinent comments of the Housing
                   Authorities’ response in the Findings section of this report.
                   The Housing Authorities’ narrative response is provided as
                   Appendix B. Supporting documentation contained in the
                   Housing Authorities’ response was too voluminous to
                   include in the audit report. These documents were
                   provided to the HUD Region 8 Office of Public Housing
                   under separate cover.




                          v                                      2004-DE-1003
Executive Summary




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2004-DE-1003                     vi
Table of Contents

Management Memorandum ...................................................................... i


Executive Summary ................................................................................ iii


Introduction .............................................................................................. 1


Findings
1. Controls Over Low-Rent Housing Occupancy Activities Need.……..5
   To Be Improved
2. Controls Over Section 8 Housing Choice Voucher Program.……….19
   Occupancy and Related Activities Need To Be Improved


Management Controls ............................................................................. 29


Follow Up on Prior Audits...................................................................... 31


Issues Needing Further Study and Consideration ................................... 33


Appendices
    A. Schedule of Questioned Costs........................................................ 35
    B. Auditee Comments......................................................................... 37
    C. Distribution .................................................................................... 47




                                                vii                                         2004-DE-1003
Table of Contents



Abbreviations
HUD          U.S. Department of Housing and Urban Development
CFR          Code of Federal Regulations
GHA          Greeley Housing Authority
WCHA         Weld County Housing Authority




2004-DE-1003                          viii
Introduction
The Greeley Housing Authority (GHA) and Weld County Housing Authority (WCHA)
have separate contracts with HUD to provide housing assistance services in the City of
Greeley, Colorado and Weld County, Colorado. The GHA started administering the
WCHA housing assistance programs under a contract that was signed in January 1999. In
2001, the two Housing Authorities formed what HUD terms a consortium with GHA
assigned responsibility for administering both housing authorities’ programs. This
relationship also allows for some consolidation of planning and reporting documents. The
same staff administers both Authorities’ housing assistance programs. GHA and WCHA
are tasked to provide safe, decent, and sanitary affordable housing to families and
individuals making between 0 and 80 percent of the median income.

GHA operates a Low-Rent Public Housing Program and a Section 8 Housing Choice
Voucher Program under contract with HUD. The GHA operates 86 low rent public
housing units. These consist of 80 apartments and six single-family houses. The GHA
Section 8 Housing Choice Voucher Program is authorized to provide assistance to 444
families. The GHA also owns a house that is not connected with the Federal government.
In addition, the GHA, under contract with High Plains Housing Development, manages the
following properties: (1) Stagecoach Garden Apartments; (2) La Casa Rosa Apartments;
and (3) Dacono Senior Apartments. These units were financed using Federal Tax Credits.

The WCHA operates a Section 8 Housing Choice Voucher Program under contract with
HUD. The WCHA Section 8 Housing Choice Voucher Program is authorized to provide
assistance to 426 families. In addition, the WCHA, under contract with the State of
Colorado Division of Housing, operates the following programs: (1) Single Family
Rehabilitation Program; (2) Rental Rehabilitation Program: and (3) Emergency
Rehabilitation Program.



                                  The overall objective of our review was to determine
 Audit Objectives                 whether the Greeley and Weld County Housing Authorities
                                  were administering the Low-Rent Public Housing and/or
                                  Section 8 Housing Choice Voucher Programs in
                                  compliance with HUD requirements and their own adopted
                                  policies and procedures.

                                  We tested a non-representative sample of GHA and WCHA
 Audit Scope and                  tenant documents and other records to obtain an
 Methodology                      understanding of the Housing Authorities’ policies and
                                  procedures. We supplemented the non-representative
                                  sample testing of available records with Housing Authority
                                  staff interviews, and HUD Region 8 Office of Public
                                  Housing staff interviews to identify the nature and possible
                                  extent of management control weaknesses.




                                       1                                       2004-DE-1003
Introduction



               Specifically, we reviewed tenant selection and continued
               occupancy activities under the HUD Low-Rent Public
               Housing and Section 8 Housing Choice Voucher Programs
               based upon allegations presented to us concerning the
               administration of these program activities. To address
               these allegations, we focused our review on determining
               whether the two Housing Authorities were conducting their
               tenant selection and continued occupancy activities for the
               two HUD programs in conformity with HUD requirements
               and their own adopted policies and procedures to determine
               whether they:

               •   Followed occupancy policies and procedures;

               •   Effectively used collection policies and procedures to
                   maintain control over tenant accounts receivable;

               •   Properly computed rental assistance amounts;

               •   Properly charged tenants for services rendered; and

               •   Maintained public housing units in good repair, order,
                   and condition.

               In conducting the audit, we:

               •   Reviewed records and files maintained by the HUD
                   Region 8 Office of Public Housing for both the GHA
                   and WCHA;

               •   Interviewed Greeley and Weld County Housing
                   Authorities officials and employees;

               •   Toured low-rent public housing units managed by the
                   GHA;

               •   Interviewed HUD Region 8 Office of Public Housing
                   officials and employees;

               •   Reviewed GHA and WCHA management systems,
                   records, and files; and

               •   Reviewed applicable Federal and Housing Authority
                   policies and procedures to gain an understanding of
                   their requirements.



2004-DE-1003          2
                                              Introduction

The audit of the two Housing Authorities’ tenant selection
and continued occupancy activities covered the period
between November 1, 2000 and July 31, 2003. Our on-site
review was conducted between August 2003 and March
2004.

We conducted the audit in accordance with generally
accepted government auditing standards.




      3                                     2004-DE-1003
Introduction




               THIS PAGE LEFT BLANK INTENTIONALLY




2004-DE-1003                4
                                                                                     Finding 1


  Controls Over Low-Rent Housing Occupancy
        Activities Need To Be Improved
The Greeley Housing Authority (GHA) needs to improve its controls over the Low-Rent
Housing Program tenant admissions and continued occupancy activities to ensure that
HUD and the authority’s occupancy requirements are being met and being uniformly and
consistently applied. Our review identified five areas where the requirements were not
being properly followed.

The first area dealt with the tenant identification and documentation of program eligibility
by having the necessary Social Security Cards and citizen or resident immigration status
support. Information was not properly documented or supported to show that the Low-
Rent tenants were eligible for assisted housing or the amount of rental charges were
correct. Second, tenants participating in the Income Disregard Program were being
undercharged their housing rent. Third, Low-Rent families were assigned housing units
that did not meet the tenant selection and waiting list requirements. Fourth, the
administration of the tenant repayment agreements was being inconsistently applied and
failed to follow the Housing Authority’s established procedures. Last, the Housing
Authority’s charging and collection of tenant security deposits were being inconsistently
applied and contrary to its adopted tenant admission procedures.

The result is tenants were admitted to GHA’s Low-Rent housing units that were not
eligible or were not being charged the correct housing rent and related security deposit.
In reference to the allegation that addressed waiting list problems, one family was assigned
to a public housing unit without being on the waiting list and no application on file, while
another family received public housing assistance even though their name should have
been removed from the waiting list.



                                   TENANT ELIGIBILITY AND RENT PRORATION
 Federal regulations and
 Housing Authority                 Title 24 of the Code of Federal Regulations, Part 5, along
 guidance require                  with provisions of the GHA Admissions and Continued
 adequate documentation            Occupancy Policy, requires each assisted applicant to
 of tenant eligibility             submit their complete and accurate Social Security Number
                                   for all household members who are at least six years of age.
                                   For those family members who are under six years of age,
                                   the family must submit documentation the individual is a
                                   family member. In addition, each family member is to
                                   submit a written declaration declaring the individual family
                                   member is a United States citizen or a non-citizen with
                                   eligible immigration status. The Regulations also provide
                                   the Housing Authority with specific instructions to be
                                   followed if the family member fails to submit the required


                                          5                                     2004-DE-1003
Finding 1

               evidence of eligible immigration status. Furthermore, no
               assistance is to be provided prior to the verification of
               eligibility of at least the individual or one family member.

               HUD Handbook 7465.7 requires the Housing Authority to
               verify immigration status with the United States
               Immigration and Naturalization Service automated system
               called Systematic Alien Verification for Entitlements.
               However, an individual who is not a United States citizen
               or who does not have eligible immigration status is to be
               listed on a statement of non-contending family members
               signed by the head of household or spouse. If an applicant
               or tenant family members fails to sign required declarations
               and consent forms or provide documents, as required, they
               must be listed as an ineligible member. If the entire family
               fails to provide and sign as required, the family may be
               denied or terminated for failure to provide required
               information.

               The purpose of the HUD requirements as supplemented
               with the GHA Admission and Continued Occupancy Policy
               is to ensure that only eligible families are selected and
               participate in the Low-Rent Housing Program and that the
               proper rental assistance, or prorated amount, is being
               provided.

               We selected and reviewed eligibility documentation for 87
               family members of 20 current and former tenants of the
               GHA Low-Rent Public Housing Program. Our review
               disclosed:

               •   For eighteen family members, no documentation for the
                   Social Security Numbers could be located.

               •   For ten family members, the necessary Social Security
                   Number verification procedure was not followed.

               •   For seven family members under age six,
                   documentation supporting their eligibility as a member
                   of the particular family was not available.

               •   For eighteen family members, the required declaration
                   statement identifying their citizenship or eligible
                   immigration status was not available in their tenant file.

               Of the 63 family members who did have a declaration form
               in their tenant files, the citizenship or eligible immigration


2004-DE-1003          6
                                                                             Finding 1

                          status for six family members was not shown. For three
                          children family members, an adult family member who was
                          responsible for them did not sign the declaration form as
                          required. For the remaining six family members, three
                          provided a Listing of Non Contending Family Members
                          and three were placed in the unit prior to the effective date
                          of the Non Citizen Rule and beyond the three year record
                          retention requirement.

                          The GHA is required to prorate the rent on family members
Required proration        who do not submit evidence or establish their eligible
procedures not followed   citizenship status. Of the 20 current and former tenants
                          reviewed for eligibility documentation, six tenants had
                          family members who did not submit evidence or establish
                          their eligible citizenship status. Five families had one or
                          more family members without a declaration document.
                          Our review disclosed that the GHA did not properly prorate
                          the rent on these families resulting in a rental loss of
                          $10,089. In addition, there was no declaration document
                          on any family members for the sixth family. Therefore,
                          this family was not eligible to participate in the GHA Low-
                          Rent Public Housing Program.

                          The result of these deficiencies is that the Housing
                          Authority has not properly documented its files concerning
                          the Social Security Number of applicable tenant family
                          members and the eligible citizenship or immigration status
                          of tenant members. Without such documentation, the
                          Housing Authority is unable to demonstrate that its tenants
                          and individual family members are eligible to participate in
                          the HUD funded Low-Rent Housing Program.
                          Furthermore, the tenants may not be paying their correct
                          rental payment.

                          INCOME DISREGARD PROGRAM
Income Disregard
Program requirements      The GHA developed their Income Disregard Program to
                          encourage families to become more self-sufficient by
                          temporarily reducing the amount of rent the tenants are
                          required to pay over a two year period after finding work
                          and leaving unemployment. The GHA incorporated the
                          HUD requirements for the program as contained in Section
                          960.255, Title 24 of the Code of Federal Regulations into
                          their Admission and Continued Occupancy Policy. Under
                          the program, a Low-Rent Housing Program family is
                          eligible to participate in the program whose annual income



                                 7                                     2004-DE-1003
Finding 1

                                           increases as a result of employment of a family member
                                           who was unemployed for one or more years previous to
                                           their employment.1 As such, the Housing Authority can
                                           exclude the increase in income of a participant, not the total
                                           income of the participant, in calculating what the tenant’s
                                           rent should be.

                                           We selected and reviewed the files for four tenants who
    Required eligibility and               were participating in the GHA Income Disregard Program
    income adjustment                      under the GHA Low-Rent Housing Program. Our review
    procedures not followed                disclosed that all four tenants had a yearly income that
                                           exceeded the established minimum wage limit during the
                                           preceding year when they were considered unemployed,
                                           and none of them were unemployed for one or more years
                                           immediately preceding the increase in income prior to their
                                           new employment. As a result, none of the four tenants
                                           were eligible to participate in the Income Disregard
                                           Program. In addition, we noted that three of the four
                                           tenants had their entire income, not just the amount of
                                           increase, excluded from their rental calculations, thus
                                           causing a rental loss of $7,226 to the GHA.

                                           This situation stems from a misunderstanding on the part of
                                           GHA employees administering the program requirements.
                                           In addition, the Income Disregard Program letter that is
                                           sent to program participants indicates that the entire income
                                           will be excluded from the rent calculation. Program
                                           requirements only permit the increase in income from
                                           employment to be excluded from the calculation.

                                           WAITING LISTS
    Waiting Lists need to be
    properly established and               HUD Regulations in Section 960.206, Title 24 of the Code
    uniformly applied                      of Federal Regulations details the requirements and
                                           provides guidance to authorities in implementing local
                                           preference procedures for the admission of tenants into its
                                           assisted programs. The Greeley Housing Authority has
                                           implemented its Admissions and Continued Occupancy
                                           Program to implement the Federal requirements. Basically,
                                           tenant applicants prepare an application and based upon
                                           preliminary evaluation are placed on a waiting list based
                                           upon bedroom size need. When a tenant’s name reaches

1
 Unemployment is defined as a person who has earned, in the twelve months previous to employment, no more than
would be received for 10 hours of work per week for 50 weeks at the established minimum wage. Increased
earnings by a family member during participation in a job training program or receiving assistance under any state
program for temporary assistance for needy families would qualify for the disallowance.


2004-DE-1003                                       8
                                                                                  Finding 1

                             the top of the waiting list, the tenant is processed for the
                             next available unit. The process is to grant each applicant
                             equal opportunity to be selected for available housing.

                             We selected and reviewed four families on the GHA Low-
Improper implementation      Rent Public Housing Program waiting lists to determine if
of waiting list procedures   the allegation that addressed waiting list problems was an
                             isolated incident or if it was indicative of a larger problem.
                             Our review showed the following:

                             •   One individual received public housing assistance with
                                 no application on file and not being on any public
                                 housing waiting list and one applicant is receiving
                                 public housing assistance even though their name
                                 should have been removed from the waiting list for not
                                 providing requested information specified by the GHA.

                             •   One family was placed on the waiting list based upon
                                 an incorrect application date and one family was
                                 dropped from the waiting list for a six-month period for
                                 an unknown reason.

                             These results indicate the GHA is not following their
                             procedures related to the placement, denial, and selection of
                             applicants from the Low-Rent public housing waiting lists.
                             Applicants were not being placed and selected from the
                             low-rent public housing waiting lists as required.
                             Therefore, the GHA’s selection process is failing to meet
                             HUD requirements and its own admission policy. The
                             result is ineligible families are residing in GHA public
                             housing units.

                             ADMINISTRATION OF REPAYMENT
 Housing Authority           AGREEMENTS
 policies address
 repayment agreements        Chapter Fifteen of the GHA Admission and Continued
                             Occupancy Policy addresses delinquent payments that are
                             due the authority. The GHA developed their repayment
                             agreement procedures to help them account for tenants who
                             owe monies for various charges (i.e.: back rent, charges for
                             repairs to the unit beyond normal wear and tear caused by
                             the tenant, etc.). These procedures are to apply equally to
                             all tenants including any authority employees who
                             currently have or previously had a repayment agreement.




                                    9                                       2004-DE-1003
Finding 1

                            There are some circumstances in which the Housing
                            Authority may not enter into a repayment agreement. One
                            of these circumstances is if the family already has a
                            repayment agreement in place. In addition, if a family
                            already has a repayment agreement in place and incurs an
                            additional debt to the PHA, the PHA is not to enter into
                            more than one repayment agreement at a time with the
                            same family.

                            The Repayment Agreement Form utilized by the GHA
                            states that the resident understands that if timely payments
                            are not made, their contract is null and void, the remaining
                            amount delinquent becomes due in full, and the authority
                            will begin legal proceedings to terminate the lease.

                            We selected and reviewed four tenants who had a
Required repayment          repayment agreement with the GHA. Our review showed
agreement procedures not    the following:
followed
                            •   Two tenants were making the required monthly
                                payments.

                            •   Two tenants were not making the required monthly
                                payments. Under provisions of the repayment
                                agreement, these two tenants should have had their
                                repayment agreement revoked, the required delinquent
                                amount should have been paid in full, and the lease
                                terminated.

                            These results indicate the GHA is not following their
                            procedures related to the administration of repayment
                            agreements with tenants and in conformity the Housing
                            Authority’s policy and procedures. Some tenants are not
                            having the terms of their repayment agreements enforced as
                            required. The impact is some tenants repayment
                            agreements were not enforced allowing them to continue to
                            reside in the public housing unit while other eligible
                            families continue to wait for public housing assistance.

                            SECURITY DEPOSITS
  Federal regulations and
  Housing Authority         Section 966.4 of Title 24 of the Code of Federal
  policies allow for the    Regulations provides an authority with the option to
  collection of security    establish and collect a security deposit from tenants
  deposits                  receiving public housing assistance. It also establishes
                            limits on the amount of the security deposit. Chapter Nine


2004-DE-1003                      10
                                                                                  Finding 1

                              of the GHA Admission and Continued Occupancy Policy
                              indicates new tenants must pay a security deposit to the
                              Housing Authority at the time of admission. The amount
                              of the security deposit required is specified in the tenant’s
                              lease.

                              The GHA utilizes security deposits to help defray such
                              costs as unpaid rent, damages listed on the Move-Out
                              Inspection Report that exceed normal wear and tear, and
                              other charges under the lease when the tenant leaves the
                              unit. The GHA established procedures in their Admission
                              and Continued Occupancy Policy to address these
                              conditions. These procedures would apply equally to all
                              tenants.

                              We examined the payment of security deposits on six of the
 Improper collection and      20 tenants in the GHA Low-Rent Public Housing Program
 administration of security   that were part of our review. We found that two tenants
 deposits                     were assigned to their low-rent public housing unit without
                              paying their required security deposit prior to admission.
                              The lease agreement for one of these two tenants specified
                              a security deposit of $200 while the lease agreement for the
                              other tenant specified a security deposit of $300. The lease
                              agreements for the other four tenants stipulate they agreed
                              to pay a $300 security deposit. However, two of these
                              tenants only paid $200 towards their security deposits while
                              the other two tenants only paid $100 towards their security
                              deposits. As of August 20, 2003, these six tenants owe the
                              Housing Authority $1,100 in security deposits.

                              These results indicate the GHA is not following their
                              procedures related to the payment of security deposits by
                              their tenants. Some tenants are not being required to pay
                              the established amount of their security deposit at the time
                              of admission. Therefore, funds are not available to defray
                              such costs as unpaid rent and repairs for damages beyond
                              normal wear and tear that are caused by these tenant.

                              Our office received a number of allegations related to
Management Controls           occupancy issues of the GHA. Results of our review in the
lacking                       areas discussed above support a number of those
                              allegations. We found that approved Housing Board of
                              Commissioner policies were not being properly and
                              consistently enforced. This has occurred because the GHA,
                              in carrying out its various tenant policies, has not
                              established sufficient monitoring and oversight procedures



                                    11                                       2004-DE-1003
Finding 1

                    to ensure required policies, HUD guidance, and HUD
                    regulations are implemented. These policies, HUD
                    guidance, and HUD regulations apply equally to all tenants.
                    However, GHA program recipients have not received
                    uniform and consistent benefits.

                    While some of the deficiencies discussed above occurred
                    due to a possible lack of documentation or from a
                    misunderstanding on the part of GHA officials
                    implementing the HUD and Housing Authority
                    requirements, we found that the Housing Authority lacked
                    sufficient procedures that ensured that the established
                    requirements were being followed. Primarily, most
                    functions relating to the admission and continued
                    occupancy of the Housing Authority tenants, including the
                    collection of security deposits and assessments of rents,
                    was vested with one individual.



                    Overall, the Greeley Housing Authority responded that they
 Auditee Comments   diligently endeavor to ensure all participants are qualified
                    to receive assistance prior to being placed on the program,
                    and annually at recertification. They further explain that
                    any deficiencies noted in the OIG audit report are not of a
                    detrimental nature and result from newly implemented
                    policies, ongoing training, continual updating of computer
                    systems, and an attempt to cross train staff. The Greeley
                    Housing Authority response affirms that it is abiding with
                    all of HUD’s regulations.

                    The Housing Authorities provided the following comments
                    for each deficiency noted in the finding:

                    Tenant Eligibility and Rent Proration: The Greeley
                    Housing Authority asserts that it is not allowing ineligible
                    non-citizens into any Housing Program. The Greeley
                    Housing Authority further responds on the process used to
                    receive applications and process them before a family
                    enters into a Housing Program. However, the Greeley
                    Housing Authority does state all files have been reviewed
                    and any missing information, documentation and/or
                    incomplete eligibility forms are being obtained from the
                    households. Lastly, the Greeley Housing Authority states it
                    will take action to prorate the rents of any undocumented
                    residents.



2004-DE-1003              12
                                                    Finding 1

Income Disregard Program: The Greeley Housing
Authority asserts that all tenants participating in their
Income Disregard Program did qualify. The Greeley
Housing Authority further asserts that the error due to
inaccurate application and calculations represents a
$3,682.59 loss in rent, not the quoted $7,226. The Greeley
Housing Authority identifies the process they use to
calculate the rent of their program participants along with
specifying the maximum time frame per adult household
member of program availability. Finally, the Greeley
Housing Authority states its staff has been retrained and
tools purchased in an effort to ensure compliance.

Waiting Lists: The Greeley Housing Authority states one
of the individuals being referred to in the finding is a staff
member who was placed on site as an on-site manager and
they agree that the waiting list related to this transaction
was bypassed. The Greeley Housing Authority asserts that
the person who was absent for six months could be the
result of a few different scenarios but since the information
is no longer available, the Housing Authority cannot
respond to this deficiency. The Greeley Housing Authority
provides an explanation of their waiting list process. In
addition, the Greeley Housing Authority states their staff
has been directed to make all documentation to files in
writing to be place in the files permanently. Notations are
to be made on the printed waiting lists and in the computer.

Administration of Repayment Agreements: The Greeley
Housing Authority asserts that while their Admissions and
Continued Occupancy Policy states they will not enter into
a repayment agreement if one is in place, it does not say
they may not alter the original agreement, cancel it and
issue a new one. The Greeley Housing Authority further
asserts that all repayment agreements are enforced and
collected on. The Greeley Housing Authority provides an
explanation of their repayment agreement issuance and
approval procedures. The Greeley Housing Authority
states they will review all repayment agreements in place
and bring them current either through adverse action to the
tenant or through modification of the current agreement.

Security Deposits: The Greeley Housing Authority states
to facilitate quicker recertification and lease up
appointments the current amount of the security deposit
was typed into Part II of the lease. Changing of staff, board



      13                                      2004-DE-1003
Finding 1

                     members, and the updating of the lease annually had led to
                     an oversight as the security deposit changed from $100 to
                     $200 and finally to $300. The Greeley Housing Authority
                     asserts they face a legal challenge if they should attempt to
                     retroactively change and collect security deposit money
                     based upon new policies from currently leased tenants.
                     Finally, the Greeley Housing Authority states they have
                     changed Part II of the lease to allow their Public Housing
                     Manager to accurately write the actual security deposit paid
                     in the lease for recertification and the current going rate of
                     security deposits for newly leasing tenants.




 OIG Evaluation of   Tenant Eligibility and Rent Proration: The Greeley
 Auditee Comments    Housing Authority stated they are not allowing ineligible
                     non-citizens in any of their programs. We disagree as
                     documentation examined during our review showed that
                     some family members did not meet the specific tenant
                     eligibility requirements. However, we agree with the
                     actions taken by the Greeley Housing Authority through
                     their review of all of their Low-Rent Public Housing
                     Tenant Files to identify incomplete and missing declaration
                     documents, requesting copies of missing Social Security
                     Cards, identifying incomplete or missing tenant
                     identification information, updating lease documentation,
                     identifying miscellaneous documentation needed, and
                     prorating the rent on any tenants who do not provide the
                     necessary and requested information. These actions should
                     help correct the deficiencies noted in the finding related to
                     tenant eligibility and rent proration.

                     Income Disregard Program: We disagree with the Greeley
                     Housing Authority that those tenants participating in their
                     Income Disregard Program met HUD qualification
                     requirements and that only $3,683 in loss rental revenues is
                     due instead of the $7,226 identified by us. The Authority
                     provided supporting documentation on four tenants who are
                     currently participating in their Income Disregard Program,
                     two of whom were not participating in the Program during
                     the time of our review and are not addressed in the finding.
                     For the two who were participating in the Program during
                     our audit period, the documentation provided did not show
                     the tenants met the earned income disallowance
                     requirements. Therefore, we still conclude that the four



2004-DE-1003               14
                                                    Finding 1

Program participants discussed in the finding did not meet
the Program requirements and were ineligible.

Waiting Lists: We do not disagree with the Greeley
Housing Authority's assertion that all waiting lists prior to
December 2000 were either destroyed or packaged for
disposal. We utilized waiting lists from December 2000
forward to validate the Greeley Housing Authority's
implementation of their waiting list procedures. Therefore,
any waiting list records prior to December 2000 that were
either destroyed or packaged for disposal did not impact
our review of the Authority’s waiting list procedures. The
Greeley Housing Authority indicates that they lost all of
their "notes" related to waiting list issues on individual
applicants during a 2003 computer update. In order to
correct this problem and those issues identified by us, the
Greeley Housing Authority has directed their staff to place
a copy of the "notes" related to each applicant’s
position/placement in the printed waiting lists along with
being placed in their computer database. These actions
taken by the Greeley Housing Authority should help correct
the waiting list processing deficiencies noted in the finding.

Administration of Repayment Agreements: The Greeley
Housing Authority asserts that all repayment agreements
are enforced. This statement differs from the facts
presented in the finding that the Authority was not
uniformly implementing the terms of the repayment
agreement for all tenants who possessed one. Even so, the
Greeley Housing Authority indicates they will review all
repayment agreements in place and bring them current
either through adverse action to the tenant or through
modification to the existing repayment agreement. These
actions should help the Authority correct the deficiencies
noted in the finding.

Security Deposits: While the Authority is addressing
changes to its tenant lease security deposit requirements
and procedures, no comments are made to address the items
discussed in the finding. These include tenants not paying
the full amount of the security deposit specified in their
lease or tenants not paying their security deposit before
being admitted to an Authority dwelling unit.




      15                                      2004-DE-1003
Finding 1




 Recommendations   We recommend the HUD Region 8 Office of Public
                   Housing:

                   1A.   Require the GHA to implement sufficient
                         administrative controls and procedures over its
                         Low-Rent tenant admission and continued
                         occupancy program activities to ensure that the
                         HUD and GHA requirements are being correctly
                         and consistently implemented. This will include:

                         •    Required Social Security Cards and/or related
                              documents are properly obtained for all family
                              members and documented.

                         •    All necessary citizen eligibility forms are
                              obtained for all family members and properly
                              documented. This would ensure the appropriate
                              tenant rents are being correctly calculated.

                         •    Rents for tenants participating in the Income
                              Disregard Program are being properly
                              calculated and charged to the tenants.

                         •    Waiting lists are being properly established and
                              maintained and that tenants are being placed in
                              housing in conformity with the GHA adopted
                              Admissions and Continued Occupancy Policy.

                         •    Tenant repayment agreements are being
                              properly implemented and consistently enforced
                              in conformity with the GHA adopted
                              procedures.

                         •    Security deposits are being uniformly and
                              consistently charged to incoming tenants in
                              accordance with the GHA Admissions and
                              Continued Occupancy Policy.

                   1B.   Require the GHA to determine that all of its current
                         Low-Rent Housing Program tenants have provided
                         all of the necessary eligible citizen or resident
                         immigration status documentation and that the
                         tenant rent is correctly calculated and charged to the
                         tenant accordingly. Any ineligible tenant families


2004-DE-1003             16
                                                 Finding 1

      should be processed in accordance with the GHA’s
      Admission and Continued Occupancy Policy.

1C.   Require the GHA to reevaluate the rent being
      charged to its Low-Rent tenant families
      participating in the Income Disregard Program and
      make any necessary rent adjustments.

1D.   Require the GHA to make restitution of $7,226 in
      undercharged rent from the Income Disregard
      Program participants to the GHA operating fund.
      Restitution to the GHA operating fund may be made
      from other Non Federal sources.

1E.   Require the GHA to secure payment of $1,100 in
      delinquent security deposits from the six tenants
      that were part of the 20 tenant sample. For the
      remaining 66 tenants, require the GHA to collect
      any differences between the security deposit
      specified in the lease agreement with that paid by
      the tenant.




      17                                   2004-DE-1003
Finding 1




               THIS PAGE LEFT BLANK INTENTIONALLY




2004-DE-1003                18
                                                                                      Finding 2


      Controls Over Section 8 Housing Choice
     Voucher Program Occupancy And Related
         Activities Need To Be Improved
Both the Greeley Housing Authority (GHA) and the Weld County Housing Authority
(WCHA) can improve its administration of their occupancy and related activities of the
Section 8 Housing Choice Voucher Program. This is needed to ensure that the Housing
Authorities are implementing the Section 8 Housing Choice Voucher Program in
conformity with HUD requirements and their Administrative Plans and that rental
assistance to program tenants are uniformly and consistently applied.

We found that the Housing Authorities were not properly determining and documenting
that tenant family members were eligible citizen or immigrants before they were receiving
Section 8 rental assistance and in some cases the amount of financial assistance was
incorrectly calculated. Three families were identified as receiving rental assistance but the
families did not meet the eligibility requirements. Also, the GHA was not administering its
tenant repayment agreements in a consistent manner and with the provisions of its
Administrative Plan. Last, the WCHA was not properly documenting its program
administrative fee that it was charging HUD.



                                    ELIGIBILITY AND RENTAL ASSISTANCE
 Federal regulations and
                                    PRORATION
 Housing Authority
 guidance require adequate
                                    Title 24 of the Code of Federal Regulations, Part 5, along
 documentation of tenant
                                    with the provisions contained in the Administrative Plan for
 eligibility
                                    both Greeley and Weld County Housing Authorities
                                    requires each Section 8 assistance program applicant to
                                    submit their complete and accurate Social Security Number
                                    along with those of all household members who are at least
                                    six years of age. In addition, each family member is to
                                    submit a written declaration declaring the individual family
                                    member is a United States citizen or a non-citizen with
                                    eligible immigration status. The Regulations also provide
                                    the Housing Authorities with specific instructions to be
                                    followed if the family member fails to submit required
                                    evidence of eligible immigration status. Furthermore, no
                                    assistance is to be provided prior to the verification of
                                    eligibility of at least one family member. HUD Handbook
                                    7465.7 requires an authority to verify immigration status
                                    with the United States Immigration and Naturalizations
                                    Service automated system called Systematic Alien
                                    Verification for Entitlements. Chapter Seven of the


                                          19                                     2004-DE-1003
Finding 2

               GHA/WCHA Administrative Plan allows an individual
               who is not a United States citizen or who does not have
               eligible immigration status may elect not to contend their
               status. If an applicant or tenant family member fails to sign
               required declarations and consent forms or provide
               documents, as required, they must be listed as an ineligible
               member. If the entire family fails to provide and sign as
               required, the family may be denied or terminated for failure
               to provide required information.

               The purpose of the HUD requirements as supplemented
               with the two Housing Authorities’ Administrative Plan is to
               ensure that only eligible families are selected and
               participate in their Section 8 Housing Choice Voucher
               Program and that the proper rental assistance, or prorated
               amount, is being provided.

               We selected and reviewed eligibility documentation for the
               Section 8 Housing Choice Voucher Program relating to 38
               family members belonging to 10 GHA tenants and for 22
               family members belonging to 10 WCHA tenants. We
               noted deficiencies in the eligibility of the family members
               for both Housing Authorities. These are summarized
               below by Housing Authority:

               Greeley Housing Authority

               •   The Social Security Number for four family members
                   was not documented in the tenant file with a copy of
                   their Social Security Card;

               •   One family member did not have under age six
                   documentation in the tenant file supporting their
                   eligibility;

               •   Three family members of one tenant did not submit the
                   required declaration form for their citizenship or
                   eligible immigration status;

               •   For a three-member family, the head of household did
                   not have the necessary immigration card supporting the
                   member’s immigration eligibility while the two other
                   members did not have their required
                   citizen/immigration eligibility declaration form signed
                   by the head of household; and




2004-DE-1003         20
                                                                              Finding 2


                          •   One tenant was ineligible for rental assistance since all
                              members of the family did not have the required
                              citizen/immigration eligibility declaration form in their
                              file.

                          Weld County Housing Authority

                          •   Two family members did not have a copy of their
                              Social Security Card in their tenant file;

                          •   Four family members did not have the required
                              citizen/immigration eligibility declaration form in their
                              tenant file; and

                          •   Two tenants were ineligible for rental assistance since
                              all members of the families did not have the required
                              citizen/immigration eligibility declaration form in their
                              files.

                          In addition, the Housing Authorities are required to prorate
Required proration        the assistance on family members who do not submit
procedures not followed   evidence or establish their eligible citizenship status. Four
                          families were reviewed who had one or more family
                          members without the required citizenship declaration form
                          in their files. Our review disclosed that the GHA did not
                          properly prorate the assistance on two tenants resulting in
                          an assistance loss of $2,449 and the WCHA did not
                          properly prorate the assistance on two tenants resulting in
                          an assistance loss of $3,748. In addition, the one GHA
                          family and the two WCHA families who did not have the
                          required citizenship declaration forms in their file were not
                          eligible to participate in the Section 8 Housing Choice
                          Voucher Program.

                          These results stemmed from the fact that both Housing
                          Authorities lacked sufficient procedures to ensure that the
                          HUD regulations and their own Administrative Plan
                          requirements were being followed. The impact is the
                          Housing Authorities are providing rental assistance for
                          family members who are not supported as being
                          citizenship/legal immigrant eligible. In addition, three
                          families are receiving rental assistance that is not supported
                          as being eligible.




                                21                                      2004-DE-1003
Finding 2


                              ADMINISTRATION OF REPAYMENT
  Housing Authority           AGREEMENTS
  policies address
  repayment agreements        Chapter Eighteen of the Administrative Plan for the GHA
                              addresses delinquent payments that are due the Housing
                              Authority. There are some circumstances in which the
                              Housing Authority will not enter into more than one
                              repayment agreement with a family. The Repayment
                              Agreement Form utilized by the GHA Section 8 Housing
                              Choice Voucher Program states that when the Repayment
                              Agreement is in default, all monies are due in full and no
                              further Repayment Agreements will be made with the same
                              family. The GHA developed their repayment agreement
                              procedures to help them account for tenants who owe
                              delinquent monies for various charges.

                              We selected all GHA tenants that had a repayment
  Required repayment          agreement. Two tenants had a repayment agreement under
  agreement procedures not    the Section 8 Housing Choice Voucher Program and a third
  followed                    tenant should have had a repayment agreement. Of the two
                              tenants with a repayment agreement, one repayment
                              agreement was being properly administered while the
                              second was not. The tenant made 2 of the 8 required
                              payments on the repayment agreement that should have
                              been completed by October 2001. The tenant owes GHA
                              $446 in arrears. The GHA Section 8 Housing Choice
                              Voucher Program Administrator has reinstated the second
                              repayment agreement after being notified of the deficiency.
                              The GHA Section 8 Housing Choice Voucher Program has
                              incurred a $594 assistance loss for the third tenant who
                              should have had a repayment agreement but did not.

                              These results indicate the GHA Section 8 Housing Choice
                              Voucher Program is not equally implementing their
                              procedures related to the administration of repayment
                              agreements on those tenants who possess one. Some
                              tenants are not having the terms of their repayment
                              agreements enforced as required.

                              DETERMINATION OF MONTHLY
  Federal regulations         ADMINISTRATIVE FEES
  authorize the charging of
  administrative fees         Under the Section 8 Housing Choice Voucher Program, a
                              housing authority is authorized to charge an administrative
                              fee primarily for each unit that is being utilized under the
                              program. Section 982.152 authorizes the payment of an



2004-DE-1003                        22
                                                                                Finding 2

                             administrative fee for each program unit under a Housing
                             Assistance Payment contract the first day of the month.

                             We reviewed the November 2003 administrative fee
Improper charging of         charged for eight tenants of the WCHA Section 8 Housing
administrative fees          Choice Voucher Program. Our review disclosed that six
                             tenants who were included in the November 2003
                             administrative fee were not under a lease as of the first of
                             November. In addition, four of these tenants were included
                             in the calculation of prior monthly administrative fees when
                             they should not have been. The WCHA Section 8 Housing
                             Choice Voucher Program charged $704.10 in ineligible
                             administrative fees for these six tenants over the period
                             August through November 2003.

                             Tenant               Period                    Amount
                               A          August thru November              $187.76
                               B          August thru November               187.76
                               C         September thru November             140.82
                               D          October thru November               93.88
                               E               November                       46.94
                               F               November                       46.94
                                                          TOTAL             $704.10

                             The WCHA makes adjustments to their administrative fees
                             as errors and/or changes become evident. In addition,
Deficient controls over      Housing Authority officials stated that they try to error on
the calculation and          the conservative side in charging HUD for administrative
charging of administrative   fees. However, the Housing Authority does not document
fees                         its administrative fee adjustments. Accordingly, without
                             documentation, the Housing Authority is limited in being
                             able to determine whether its administrative fees charged
                             HUD is accurate.

                             The WCHA needs to establish a formalized system for
                             calculating the administrative fees charged to HUD. The
                             system should account for and fully document all
                             adjustments made.

                             These areas of deficiencies discussed above point out the
                             need for the Housing Authorities to improve its
                             administrative procedures over its Section 8 Housing
                             Choice Voucher Program to ensure that they are fully
                             complying with HUD requirements as well as with their
                             Administrative Plan procedures. We found that the
                             administration of each Housing Authority’s program was


                                   23                                     2004-DE-1003
Finding 2

                    being conducted with most major administrative functions
                    being carried out by one staff member with no overview or
                    monitoring of the Section 8 Housing Choice Voucher
                    Program activities. Without any oversight or monitoring,
                    the Housing Authorities have limited assurance that its
                    Section 8 Housing Choice Voucher Program is being
                    conducted as intended and within the prescribed HUD
                    requirements.



 Auditee Comments   The Housing Authorities provided the following comments
                    for each deficiency noted in the finding:

                    Eligibility and Rental Assistance Proration: The Greeley
                    and Weld County Housing Authorities assert that it is not
                    allowing ineligible non-citizens into any Housing Program.
                    The Greeley and Weld County Housing Authorities further
                    respond on the process used to receive applications and
                    process them before a family receives rental assistance.
                    However, the Greeley and Weld County Housing
                    Authorities do state that they are checking all files for
                    applicable documentation as part of the recertification
                    process. Finally, the Greeley and Weld County Housing
                    Authorities state it will take action to prorate the rental
                    assistance of any undocumented residents.

                    Administration of Repayment Agreements: The Greeley
                    Housing Authority asserts that while their Administrative
                    Plan states they will not enter into a repayment agreement
                    if one is in place, it does not say they may not alter the
                    original agreement, cancel it and issue a new agreement.
                    The Greeley Housing Authority further asserts that all
                    repayment agreements are enforced and collected on. The
                    Greeley Housing Authority provided an explanation of
                    their repayment agreement procedures. The Greeley
                    Housing Authority states they will review all in place
                    repayment agreements and bring them current either
                    through adverse action to the tenant or through
                    modification of the current agreement and ensure the date
                    has been input into the computer software system.

                    Determination of Monthly Administrative Fees: The Weld
                    County Housing Authority states they operate in good faith
                    regarding the administrative fee collection. They are not
                    able to make automatic adjustments to calculations in their
                    computer system because it is a real time system designed


2004-DE-1003              24
                                                                      Finding 2

                    to prohibit staff from going back and altering records in an
                    attempt to defraud the program. The Weld County Housing
                    Authority asserts there were 16 tenants under contract on
                    the first of the month but they had not been placed into the
                    computer system. As a result, $751.04 in administrative
                    fees was not collected. The Weld County Housing
                    Authority further asserts that the $751.04 in uncollected
                    administrative fees offsets the $704.10 in overcharged
                    administrative fees and they do not intend to collect the
                    difference. Finally, the Weld County Housing Authority
                    stated how they will revise their operating procedures to
                    ensure they properly account for administrative fees.



OIG Evaluation of   Eligibility and Rental Assistance Proration: The Greeley
Auditee Comments    and Weld County Housing Authorities have stated they are
                    not allowing ineligible non-citizens in any of their
                    programs. We disagree as documentation examined during
                    our review showed that some family members did not meet
                    the specific tenant eligibility requirements. However, we
                    agree with the actions taken by the Greeley and Weld
                    County Housing Authorities through their review of all of
                    their Section 8 Housing Choice Voucher Program Tenant
                    Files during the recertification process to identify
                    incomplete and missing declaration documents, other
                    documentation needed, and prorating the rental assistance
                    on any tenants who do not provide the necessary and
                    requested information. These actions taken by the Greeley
                    and Weld County Housing Authorities should help correct
                    the deficiencies noted in the finding related to eligibility
                    and rental assistance proration.

                    Administration of Repayment Agreements: The Greeley
                    Housing Authority asserts that all repayment agreements
                    are enforced. This statement differs from the facts
                    presented in the finding that the Authority was not
                    uniformly implementing the terms of the repayment
                    agreement for all tenants who possessed one. Even so, the
                    Greeley Housing Authority indicates they will review all
                    repayment agreements in place and bring them current
                    either through adverse action to the tenant or through
                    modification to the existing repayment agreement. These
                    actions should help the Authority correct the deficiencies
                    noted in the finding.




                          25                                     2004-DE-1003
Finding 2

                   Determination of Monthly Administrative Fees: The Weld
                   County Housing Authority did not provide any supporting
                   documentation about their claim that we did not take into
                   account 16 tenants who were under contract on the first of
                   the month but had not been placed into the computer
                   system. These 16 tenants should have been part of the
                   administrative fee but they were left out resulting in
                   $751.04 in uncollected administrative fees. Without
                   supporting documentation, we are not able to validate their
                   claim. However, the Weld County Housing Authority
                   Section 8 Administrator is to begin maintaining a monthly
                   computer generated administrative fee calculation sheet,
                   manually write the name of the tenant who was added or
                   deleted from the program for which an administrative fee is
                   due, and provide a copy to the accountant for manual
                   corrections in the accounting records at the end of the
                   month. These actions should help eliminate problems
                   associated with the charging of administrative fees in the
                   future.



 Recommendations   We recommend the HUD Region 8 Office of Public
                   Housing:

                   2A.    Require the GHA and the WCHA to implement
                          sufficient administrative controls and procedures
                          over its Section 8 Housing Choice Voucher
                          Programs admission and continued occupancy
                          activities to ensure that the HUD and Housing
                          Authority Administrative Plan requirements are
                          being met. These would ensure that:

                          •   Required Social Security Cards and/or related
                              eligibility documents are properly obtained for
                              all family members and documented; and

                          •   All necessary citizen eligibility forms are
                              obtained for all family members and properly
                              documented. These would ensure the
                              appropriate tenant rents are correctly calculated
                              and adjusted accordingly and those determined
                              to be ineligible program tenants to be processed
                              in accordance with the Housing Authority
                              Administrative Plans.




2004-DE-1003             26
                                               Finding 2

      For the GHA, it would ensure that its tenant
      repayment agreements are uniformly and consistent
      implemented and carried out in accordance with its
      Administrative Plan.

      For the WCHA, it would ensure that the Section 8
      Housing Choice Voucher Program administrative
      fees are properly calculated and documented on a
      monthly basis. In addition, the Housing Authority
      should recalculate the 2003 administrative fees for
      its program and make any appropriate adjustments
      to HUD. The recalculation does not need to include
      all tenants in November, or the six tenants already
      identified for August thru October.

2B.   Require the GHA to secure payment of $446 in
      arrears from the repayment agreement that was not
      enforced, and $594 for the tenant who should have
      had a repayment agreement.

2C.   Require the WCHA to make $704.10 in adjustments
      to HUD for the ineligible administrative fees
      charged to HUD for the six tenants between August
      and November 2003.




      27                                  2004-DE-1003
Finding 2




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2004-DE-1003                28
Management Controls
In planning and performing our audit, we obtained an understanding of the management controls
that were relevant to our audit. Management is responsible for establishing effective
management controls. Management controls, include the plan of organization, methods and
procedures adopted by management to ensure that its goals are met. Management controls
include the processes for planning, organizing, directing, and controlling program operations.
They include the systems for measuring, reporting, and monitoring program performance.



 Management Controls                We determined the following management controls were
 Assessed                           relevant to our audit objectives:

                                    •      Tenant Accounts Receivable System;

                                    •      Occupancy System;

                                    •      Low-Rent Unit Condition/Utilization, and;

                                    •      Section 8 Housing Choice Voucher Program
                                           Administrative Sytem.

 Assessment Procedures              We used the following audit procedures to evaluate the
                                    management controls:

                                    •      Reviewed records and files maintained by the HUD
                                           Region 8 Office of Public Housing for both the
                                           GHA and WCHA;

                                    •      Interviewed Greeley and Weld County Housing
                                           Authorities officials and employees;

                                    •      Toured low-rent public housing units managed by
                                           the GHA;

                                    •      Interviewed HUD Region 8 Office of Public
                                           Housing officials and employees;

                                    •      Reviewed GHA and WCHA management systems,
                                           records, and files; and

                                    •      Reviewed applicable Federal and Housing
                                           Authority policies and procedures to gain an
                                           understanding of their requirements.

                                    It is a significant weakness if management controls do not
                                    provide reasonable assurance that the process for planning,



                                          29                                    2004-DE-1003
Management Controls

                          organizing, directing, and controlling program operations
                          will meet an organization's objectives.

 Significant Weaknesses   Our review indicates the two Housing Authorities lacked
                          the management controls necessary over the administration
                          of their admissions and continued occupancy programs to
                          ensure that they:

                          •      Properly determine applicant eligibility and rent
                                 proration;

                          •      Properly implement the GHA Income Disregard
                                 Program;

                          •      Properly implement the Low-Rent Housing
                                 Program waiting list procedures;

                          •      Properly administer repayment agreements;

                          •      Properly establish and collect security deposits from
                                 GHA Low-Rent Program tenants; and

                          •      Correctly determine WCHA monthly administrative
                                 fees.




2004-DE-1003                    30
Follow Up on Prior Audits
This is the first time that the Greeley Housing Authority and Weld County Housing Authority
have been reviewed by the HUD Region 8 Office of Inspector General for Audit. However, the
HUD Region 8 Office of Public Housing conducted a monitoring review of both Housing
Authorities. The HUD Region 8 Office of Public Housing issued their Management Review
Report on December 10, 2001 and it contained five findings with related recommended
corrective actions. The Management Review Report also contained six observations. The five
findings deal with:

   1. The Family Self-Sufficiency Program;

   2. Tenant Files;

   3. Units failed Housing Quality Standards Inspections;

   4. Resident on the Housing Board of Commissioners; and

   5. Waiting Lists.




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Follow Up on Prior Audits




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2004-DE-1003                       32
Issues Needing Further Study and Consideration
During our review, several areas relating to the accounting for tenant service charges and tenant
account receivables were identified that need further review and corrective action. These two
areas are discussed below:

   Tenant Service Charges: The Greeley Housing Authority (GHA) is not always charging its
   Low-Rent housing tenants for services rendered. During our review of work orders for
   damages caused by the tenant beyond normal wear and tear on four dwelling units, these
   deficiencies were noted:

   •   In one instance, no work order was established for the maintenance work; and

   •   In two instances, work order charges were not recorded against the applicable tenant.

   We also noted that the Housing Authority is not recording work order charges to the tenant’s
   account in a timely manner. Charges for unit repairs from 14 work orders were not made to
   the tenants’ account from 30 to 196 days after the work order service was provided.
   Establishing tenant receivables related to maintenance work orders more than six months
   after the work was completed means the Housing Authority does not have an accurate
   accounting of their tenant receivable assets at any single point in time. In addition, Low-
   Rent public housing tenants could vacant their assigned unit prior to the tenant receivable
   being established, thus creating a potential for loss.

   Tenant Accounts Receivable: The GHA and the Weld County Housing Authority has not
   been recording its accounts receivable balances from its Section 8 Housing Choice Voucher
   Program tenants on the appropriate accounting records. Instead, receivables from its Section
   8 Housing Choice Voucher Program tenants are being maintained on an unofficial
   accounting record kept by the particular Housing Authority’s program administrator. As
   such the identity, control and tracking of the Housing Authorities’ tenant receivables is
   greatly diminished.

Further analysis and corrective action is needed in connection with these two areas.
Accordingly, these are being presented for HUD’s further review and action as considered
necessary.




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Issues Needing Further Study and Consideration




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2004-DE-1003                             34
                                                                                        Appendix A

Schedule of Questioned Costs
Recommendation                                                                       Unsupported
   Number                             Type of Questioned Cost                           Costs 1/

      1D                              Income Disregard Program                          $7,226

      1E                              Security Deposits                                 $1,100

      2B                              Repayment Agreement                               $1,040

      2C                              Administrative Fees                               $ 704

1/ Unsupported costs are costs charged to a HUD-financed or HUD-insured program or
   activityand eligibility cannot be determined at the time of audit. The costs are not supported by
   adequate documentation or there is a need for a legal or administrative determination on the
   eligibility of the costs. Unsupported costs require a future decision by HUD program officials.
   This decision, in addition to obtaining supporting documentation, might involve a legal
   interpretation or clarification of Departmental policies and procedures.




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Appendix A




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                          Appendix B


Auditee Comments




                   37   2004-DE-1003
Appendix B




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       Appendix B




39   2004-DE-1003
Appendix B




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       Appendix B




41   2004-DE-1003
Appendix B




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       Appendix B




43   2004-DE-1003
Appendix B




2004-DE-1003   44
                                                                                  Appendix B




(Supporting documentation provided by the auditee was too voluminous to include in the audit
report. These documents were provided to the HUD Region 8 Office of Public Housing under
separate cover.)




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Appendix B




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2004-DE-1003                46
                                                                          Appendix C

Distribution Outside of HUD
The Honorable Susan M. Collins, Chairman, Committee on Government Affairs
The Honorable Joseph Lieberman, Ranking Member, Committee on Government Affairs
The Honorable Thomas M. Davis, III, Chairman, Committee on Government Reform
The Honorable Henry A. Waxman, Ranking Member, Committee on Government Reform
Elizabeth Meyer, Senior Advisor, Subcommittee on Criminal Justice
Clinton C. Jones, Senior Counsel, Committee on Financial Services
Kay Gibbs, Committee on Financial Services
Mark Calabria, Committee on Banking, Housing, and Urban Affairs
W. Brent Hall, U.S. General Accounting Office
Steve Redburn, Chief Housing Branch, Office of Management and Budget
Linda Halliday, Department of Veterans Affairs, Office of Inspector General




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