Issue Date
November 13, 2003
Audit Case Number
2004-PH-1001
TO: Malinda Roberts, Director of Public Housing, Philadelphia Area Office, 3APH
FROM: Daniel G. Temme, Regional Inspector General for Audit, Mid-Atlantic, 3AGA
SUBJECT: Bucks County Housing Authority
Utilization of Tenant-Based Section 8 Funds
Doylestown, Pennsylvania
INTRODUCTION
We audited the Bucks County Housing Authority’s (Authority) Tenant-Based Section 8
Program. The objective of the audit was to determine whether the Authority is adequately
administering its Section 8 Program to ensure available funds are fully utilized to assist
the maximum number of eligible families under the Program.
To accomplish our audit objective, we:
• Reviewed applicable Federal and U.S. Department of Housing and Urban
Development (HUD) regulations to gain an understanding of Section 8 Program
requirements.
• Interviewed responsible staff from the Authority’s Section 8 Department and from
HUD’s Pennsylvania Office of Public Housing.
• Examined the Authority’s policies, procedures, files, records, plans, and reports.
• Reviewed the Authority’s system of management controls over Section 8
utilization.
We conducted the audit from June 2003 to August 2003 and covered the Authority’s
operations from October 1999 to April 2003. The audit complied with generally accepted
government auditing standards.
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.
Should you or your staff have any questions, please contact John Buck, Assistant
Regional Inspector General for Audit, at (215) 656-3401, extension 3486.
SUMMARY
We found, for the most part, that the Authority is administering its Section 8 Program in
an efficient manner. However, we found several areas where the Authority can improve
its operations. These areas include: re-evaluating staffing levels to determine if they are
adequate; developing a landlord outreach program to keep current landlords informed of
changes to the Program and to encourage new landlords to enter the Program; creating
and providing desk manuals to its Section 8 employees to aid in performing their specific
tasks; and developing a formal training plan to identify needed training and provide
employees with current and adequate training.
BACKGROUND
The Authority was organized under the laws of the Commonwealth of Pennsylvania in
1941 to provide low-rent housing for qualified applicants in accordance with the rules
and regulations prescribed by HUD and other Federal agencies. The Authority’s Section
8 Housing Choice Voucher Program uses rental vouchers to assist qualified low-income
applicants to lease an existing privately owned house or apartment.
The Annual Contributions Contract provides a housing authority with funds for housing
assistance and program administration, and establishes its responsibilities in
administering the funds. By accepting HUD funds, the housing authority agrees to:
comply with the requirements of the U.S. Housing Act of 1937 and all HUD regulations
and other requirements; comply with its HUD-approved Administrative Plan; and
proceed expeditiously with the Program.
The following chart shows the Authority’s Section 8 resources from 2000 to 2003:
2
Certificates Vouchers Total
Fiscal Year (In millions) (In millions) (In millions)
2000 $.6 $9.9 $10.5
2001 $.04 $12.3 $12.3
2002 - $15.3 $15.3
2003 - $17.2 $17.2
Under the Section 8 Management Assessment Program (SEMAP), HUD measures
housing authority utilization at the end of each housing authority’s fiscal year. HUD
expects high performing housing authorities to maintain an average utilization rate at or
above 98 percent, with standard performance between 95 to 97 percent. As of
December 31, 2002, the Authority’s utilization rate had dropped to 83 percent.
FINDING 1
The Authority Generally Administered Its Section 8 Program Effectively
Although the Authority utilized only 83 percent 1 of its available Section 8 vouchers, we
found, for the most part, the Authority administered its Section 8 Program effectively.
We found the Authority’s utilization rate dropped from 95 percent in 1998 to 83 percent
by the end of 2002 because it was unable to use all of the additional 1,284 vouchers HUD
provided from two apartment complexes opting to drop the Section 236 Program2. In
large part, we attributed the Authority’s difficulty in leasing-up the vouchers to Bucks
County’s very tight housing market, high rents, and a lack of available housing.
However, during our review we did identify a number of areas where the Authority could
improve its operations. These areas include: re-evaluating staffing levels to determine if
they are adequate; developing a landlord outreach program to keep current landlords
informed of changes to the Program and to encourage new landlords to enter the
Program; creating and providing desk manuals to its Section 8 employees to aid in
performing their specific tasks; and developing a formal training plan to identify needed
training and provide employees with current and adequate training.
Opt-out Voucher Influx
In 1998, HUD considered the Authority a standard performer with a utilization rate of 95
percent. Because Creekside Apartments opted out of the Section 236 Program and
Center Square Apartments’ new owners did not want to participate in the Section 236
Program, HUD provided the Authority with a total of 932 opt-out and 352 preservation
Section 8 Housing Choice Program vouchers from 1999 through 2002. The Authority
1
As of December 31, 2002
2
Rental and Cooperative Housing for Lower Income Families Program – Section 236 of the National
Housing Act
3
used 550 of these vouchers for the residents of the two developments. This left the
Authority with 734 vouchers because the remaining residents did not respond to the
Authority’s request for income verifications, or the Authority determined they were
ineligible or already provided Section 8 assistance. Due to the influx of these additional
vouchers, the Authority’s utilization rate dropped to 83 percent. The Authority’s
available and leased units from 1999 through 2003 are summarized below:
Certificates/ SEMAP Unit
Fiscal Year Certificates/Vouchers Vouchers Utilization Rate
Ending per ACC3 Leased (percent)
12/31/1999 2,001 1,883 93
12/31/2000 2,400 2,017 83
12/31/2001 2,400 2,195 90
12/31/2002 3,047 2,517 83
12/31/2003 3,399 N/A4 N/A4
In September 2001, the Authority tried to return to HUD 500 vouchers that it could not
use. At that time, HUD did not have procedures for voluntary voucher reductions, so the
Authority withdrew its request and tried to issue as many of the vouchers as possible. On
June 7, 2002, HUD issued PIH Notice 2002-14, Procedures for Voluntary Reduction of
Baseline Units. This Notice provided procedures for voluntary reduction of housing
choice voucher baseline units that housing authorities had not used in their jurisdiction.
Based on this Notice, the Authority again requested HUD take back 500 vouchers.
However, after discussions with HUD program staff in January 2003, the Authority
withdrew its request and agreed to analyze HUD’s recommendations on program
improvements to use the additional vouchers despite a tight housing market.
Housing Market Conditions
The Authority attributed the difficulty in leasing-up the additional vouchers HUD
provided to the tight housing market in Bucks County. The 2000 Census Bureau and an
independent housing study corroborated the Authority’s assertion of a tight housing
market. The Census Bureau rental vacancy rate for Bucks County was 4.2 percent and an
independent housing study, dated September 2000, reported an even lower vacancy rate
of 1.8 percent. The independent study also acknowledged that a "normal" vacancy rate
that allows adequate room for turnover is generally considered to be 5-7 percent. Further,
we noted that the Authority already took some positive steps to solve the challenges
confronting them. To address the high rent problem, the Authority requested and
3
Figure represents the number of units (vouchers) under contract at the beginning of the Authority’s fiscal
year.
4
Current fiscal year. Data is not finalized.
4
received exception rents for 19 townships and boroughs in Bucks County. In addition, in
August 2002, the Authority hired an additional intake employee in an effort to use the
500 unused vouchers. However, we believe the Authority can take additional measures
to improve utilization.
Staffing Levels
The Authority needs to re-evaluate its staffing levels in the Occupancy Department to
reduce the number of unused vouchers and increase its utilization rate. The Occupancy
Department issues about 80 vouchers a month and leases-up about 40 vouchers a month.
However, about 40 families leave the Program each month. As a result, the Authority is
not making any progress in reducing the 500 unused vouchers. The Occupancy
Department consists of three employees who process all incoming applications.
Currently, one of the employees is on indefinite sick leave. The Authority intends to hire
an additional staff person in the Occupancy Department on a trial basis, and plans to re-
evaluate the situation in six months to determine the effect of the additional employee on
their utilization rate.
Landlord Outreach
Our review disclosed the Authority does not have a formal landlord outreach program. In
June 2003, the Authority attended a landlord outreach event which the Bucks County
Housing Group sponsored. The Authority also held a meeting in Quakertown to encourage
new landlords to enter the Section 8 Program, but only a handful of landlords attended.
Because available housing is a problem in Bucks County, the Authority needs to be more
aggressive in this area by contacting and encouraging more landlords to participate in the
Program. HUD’s Housing Choice Voucher Program Guidebook provides various
techniques on how to attract new landlords. Further, the Authority should contact current
landlords to advise them of changes to the Program and to identify problems they may have.
Also, the Authority should determine why landlords leave the Program, which could help to
identify ways to improve operations, correct any problems noted, and keep landlords in the
Program.
Desk Manuals
We also found that the Authority does not have desk manuals for all positions in the
Section 8 Department. Although the Authority has a policies and procedures manual, it
does not detail the steps employees need to perform their specific duties. This may have
attributed to errors we found with key data entered into the Authority’s Management
Information System. Also, one employee stated he was told he was filing paperwork
incorrectly and another relied on personal notes of other employees as guidance in
performing his duties. Having a desk manual is important for the staff to perform their
duties consistently. Interviewed employees stated that having a job-related desk manual
would be beneficial in performing their jobs.
5
Training
The Authority does not have a formal training plan, requiring employees to submit
training requests, nor does it track the training that it provides to employees. The
Authority provides training to new employees when they are first hired and periodically
trains the Section 8 Coordinator on changes to the Program. The Section 8 Coordinator
then returns and disseminates the information to the rest of the staff. Although the
Authority updates the employees’ guidebooks when necessary, the Authority should
provide employees adequate and necessary training regarding changes in the Program.
The Section 8 Coordinator stated that the Authority could develop a training plan that
provides for training given to new employees. This would also include periodically
providing training to the entire staff to update them on changes in the Program. The
Executive Director also stated that the Authority would improve their documentation of
training that it provides to its employees.
AUDITEE COMMENTS
We discussed the draft finding with responsible Authority personnel and the Executive
Director during the audit. On October 6, 2003, we provided a discussion draft of the audit
report to the Executive Director. The Executive Director declined a formal exit conference.
We received the Authority’s written comments on October 24, 2003 and updated comments
on October 29, 2003.
In its response, the Authority described actions it had taken or was taking on all of our
audit recommendations. The Authority stated it had reevaluated its staffing needs and on
October 6, 2003 hired a Management Aide to work in the application department. It
expects the new Aide to certify an additional 40 Section 8 applicants each month. On
September 18, 2003, the Authority also promoted a staff member to the position of
Assistant Section 8 Coordinator for Continued Occupancy to take over many of the
routine administrative tasks that the Section 8 Coordinator currently performs. The
Authority anticipates that this will allow the Coordinator to more aggressively contact
and encourage landlords to participate in the Program. The Authority is also developing
desk manuals for the staff and expects to complete them by November 30, 2003.
Regarding our recommendation to develop a formal training plan, the Authority stated
that the Section 8 Coordinator periodically attends training, and is responsible for
disseminating the information to the Section 8 staff. The Coordinator will now document,
by a memo to the staff, any Program changes she has learned during her training. The
Authority also stated it would continue to send all new employees to a course for initial
training and a broad overview of the Section 8 Program.
OIG EVALUATION OF AUDITEE COMMENTS
We considered the Authority’s comments in preparing the final report and included the
full narrative portion of the Authority’s response as Appendix A.
6
The Authority’s response described several measures it has implemented that should help
it improve its operations. We agree that hiring a new Management Aide for the
Application Department should help the Authority increase the number of applicants it
certifies each month. Additionally, establishing an Assistant Section 8 Coordinator for
Continued Occupancy should allow the Section 8 Coordinator to more aggressively
pursue landlord outreach. Further, developing the desk manuals should provide the
Authority with a corporate knowledge base and provide Section 8 employees with
necessary instructions for performing their day-to-day functions. Lastly, we agree the
Authority will help ensure its Section 8 staff is kept up-to-date on Section 8 Program
changes by documenting them in a memo to its staff. However, we continue to believe a
formal training plan is needed to assist the Authority in effectively planning and
conducting its overall training needs.
RECOMMENDATIONS
We recommend that the Philadelphia Area Office of Public Housing require the Bucks
County Housing Authority to:
1A. Re-evaluate staffing levels to determine if they are adequate to lease-up the 500
remaining vouchers.
1B. Develop a landlord outreach program to keep current landlords informed of Program
changes and to encourage new landlords into the Program.
1C. Develop desk manuals that provide detailed guidance on job performance for all
Section 8 positions.
1D. Develop a formal training plan to identify needed training and provide employees
with current and adequate training.
7
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.
We determined policies, procedures, control systems, and other management tools
implemented to ensure the Section 8 Program met its utilization goal were relevant to our
audit objective. It is a significant weakness if management controls do not provide
reasonable assurance that the process for planning, organizing, directing, and controlling
program operations will meet an organization’s objectives.
Based on our review, we believe the following items are significant weaknesses:
The Authority did not:
• Evaluate staffing levels to determine if they are adequate to lease-up its
remaining vouchers.
• Develop a landlord outreach program to maximize the number of landlords
participating in the Section 8 Program.
• Develop desk manuals containing detailed guidance for performing Section
8 functions.
• Develop a formal training plan to identify and provide current and adequate
training to employees.
8
Appendix A
AUDITEE COMMENTS
9
10
11
Bucks County Housing Authority, Utilization of Section 8 Funds Doylestown, Pennsylvania
Published by the Department of Housing and Urban Development, Office of Inspector General on 2004-11-13.
Below is a raw (and likely hideous) rendition of the original report. (PDF)