AUDIT REPORT
Syracuse Housing Authority
Section 8 Housing Choice Voucher Program
Syracuse, New York
2005-NY-1006
August 10, 2005
OFFICE OF AUDIT
New York/New Jersey Region
Issue Date
August 10, 2005
Audit Report Number
2005-NY-1006
TO: Joan K. Spilman, Director, Public Housing Division, 2CPH
FROM: Edgar Moore, Regional Inspector General for Audit, 2AGA
SUBJECT: Syracuse Housing Authority, Syracuse, New York, Needs To Make
Improvements In Administering Its Section 8 Housing Choice Voucher Program
HIGHLIGHTS
What We Audited and Why
We conducted a review of the Syracuse Housing Authority’s (Authority) to
determine whether the Authority is effectively administering its Section 8
Housing Choice Voucher program. We selected the Authority because they were
one of the top three housing authority’s in a Section 8 risk assessment conducted
by the Region.
What We Found
The Authority is in general compliance with applicable laws and regulations as
they relate to its Section 8 Housing Choice Voucher program. However, the
Authority’s controls over certain administrative matters and program operations
need improvement. Specifically, (a) the waiting list was not maintained in
accordance with HUD requirements, (b) recertifications were not conducted in a
timely manner, (c) inaccurate occupancy information was reported to HUD, and
(d) housing units contained minor deficiencies pertaining to housing quality
standards.
What We Recommend
We recommend that the director, Public Housing Division, Buffalo Field Office,
require the Authority to
• Implement procedures to purge its waiting list.
• Implement procedures and controls to ensure that the Section 8
recertification process is conducted in a timely manner.
• Develop and implement a quality control plan to ensure that the
information that is reported to HUD is current and accurate.
• Ensure that the minor housing quality standard deficiencies identified are
corrected within the required timeframes.
For each recommendation without a management decision, please respond and
provide status reports in accordance with HUD Handbook 2000.06, REV-3.
Please furnish us copies of any correspondence or directives issued because of the
audit.
Auditee’s Response
We provided a draft copy of the draft report to Authority officials, who generally
agreed with the findings and recommendations.
The complete text of the auditee’s response, along with our evaluation of that
response, can be found in appendix A of this report.
2
TABLE OF CONTENTS
Background and Objectives 4
Results of Audit
Finding 1: The Authority Needs to Make Improvements in the Administration of its 5
Section 8 Housing Choice Voucher Program
Scope and Methodology 10
Internal Controls 11
Appendixes
A. Auditee Comments and OIG’s Evaluation 13
3
BACKGROUND AND OBJECTIVES
The Syracuse Housing Authority (Authority) was established to provide decent,
safe, and sanitary housing for eligible low- and moderate-income residents of the
City of Syracuse, New York. Our review focused on the Authority’s Section 8
Housing Choice Voucher program, which uses rental vouchers to assist qualified
low-income applicants to lease an existing privately owned apartment or house.
In fiscal year 2004, the Authority administered 2,811 Section 8 vouchers with an
annual budget of $15.5 million and earned administrative fees totaling $1.5
million. The Authority’s books and records for the Section 8 program are
maintained at its Housing Assistance Payments office located at 312 Gifford
Street, Syracuse, New York.
The overall objectives of our review were to determine whether the Authority is
effectively administering its Section 8 Housing Choice Voucher program.
Specifically, we determined whether the Authority (1) implemented Section 8
admission policies that are consistent with U.S. Department of Housing and
Urban Development (HUD) requirements, (2) verified the accuracy of the
information on Section 8 applicants’ applications, as well as Section 8
participants’ recertification forms, (3) properly calculated participants’ housing
assistance payments, (4) accurately reported information to HUD, and (5) ensured
that units provided to participants met HUD’s housing quality standards.
4
RESULTS OF AUDIT
Finding 1: The Authority Needs to Make Improvements in the
Administration of its Section 8 Housing Choice Voucher
Program
The Authority is generally administering its Section 8 Housing Choice Voucher
program in accordance with the program’s requirements. However, we noted
weaknesses in the controls relating to certain program operations that need
improvement. Specifically, (a) the waiting list was not maintained in accordance
with HUD requirements, (b) recertifications were not conducted in a timely
manner, (c) inaccurate occupancy information was reported to HUD, and (d)
housing units contained minor deficiencies pertaining to housing quality
standards. In general, the weaknesses can be attributed to a lack of emphasis by
the Authority on certain procedures and controls. These weaknesses reduce the
overall effectiveness of the Authority’s Section 8 Housing Choice Voucher
program.
Waiting List Not Maintained in
Accordance with HUD
Requirements
The waiting list for the Section 8 Housing Choice Voucher program was not
maintained in accordance with HUD requirements. The waiting list contains
more than 6,000 names of program applicants that have not been purged since
2002. The list has been officially closed since August 2004. According to
Authority officials, purging the waiting list is not a priority. The Authority
contends that the cost of postage that would be incurred to contact applicants on
the waiting list is not beneficial to the Authority’s operations at this time.
The Housing Choice Voucher Program Handbook 1 provides that the waiting list
should be kept as up-to-date as possible to minimize the number of “no-shows”
and ineligible determinations. Depending upon how quickly a public housing
authority’s waiting list turns over, information provided during the application
process, such as a change in address, income, family composition, or change in
circumstances affecting the applicant’s preference status, may become outdated.
Further, the Handbook provides that public housing authorities with long waiting
lists may find that it is not cost effective to purge the entire waiting list and
instead can decide to purge only enough applicants to enable the public housing
authority to have current information only on those applicant families who are
1
HUD Housing Choice Voucher Program Handbook 7420.10g, Chapter 4.5
5
likely to reach the top of the waiting list in the next 12 months. Although purging
can require significant staff time and money, depending upon the extent of the
purge, the public housing authority should analyze the effort required to complete
a purge. If staff is not available but the urgency to purge exists, the public
housing authority may want to consider contracting out this function. Purging the
waiting list to maintain a list of active applicants is more cost effective than
risking decreased leasing rates because of an outdated list.
The negative effect of not purging the waiting list is a possible delay in leasing
activities. When a waiting list is out of date, it can be difficult, if not impossible,
to reach applicants selected. Often the applicant’s status has changed so that the
applicant no longer meets the eligibility or selection criteria. The primary goal
in purging a waiting list is to obtain current information on interested applicants
and to remove applicants no longer interested in or eligible to participate in the
program. The Authority should purge enough applicants to enable it to have
current information only on applicants who are likely to reach the top of the
waiting list in the next 12 months.
Recertifications Were Not
Conducted in a Timely Manner
From our sample of 12 tenant files, we found seven files (58 percent) with
deficiencies in the annual income reexamination process. For the seven program
participants, our review disclosed that the Authority did not conduct the annual
recertification process in a timely manner. This is important because if a tenant’s
income has changed (increased or decreased) late recertifications can lead to
either an over or under subsidy amount being paid. Authority officials
acknowledged that this is a systematic problem and agreed that the recertifications
should be performed in a timely manner; however, they attribute this deficiency to
staffing and budget constraints.
In accordance with 24 Code of Federal Regulations (CFR) 2 and HUD Housing
Choice Voucher Program Handbook 3 , the Authority is required to conduct a
reexamination of family income and composition at least annually. Further, the
guidebook requires the Authority to establish a policy that ensures reexamination
takes place within a 12-month period. As a result, the Authority needs to
implement procedures to ensure that the Section 8 recertification process is
conducted in a timely manner.
2
24 Code of Federal Regulations 982.516(a)
3
HUD Housing Choice Voucher Program Guidebook 7420.10g, chapter 12.1 and 12.2
6
Inaccurate Occupancy
Information Reported to HUD
The Housing Choice Voucher Handbook 4 provides that the Multifamily Tenant
Characteristics System is HUD’s automated system for recording demographic
information about assisted families and data about the units they occupy. HUD
uses this data to monitor and assess each public housing authority’s performance.
The Handbook further states that HUD requires public housing authorities to
submit data for the following actions: voucher issuance/expiration, new
admissions, reexaminations, portabilities, changes of unit, and end of program
participation. The data is used to score five indicators in the Section 8
Management Assessment Program and provide documentation for budget reviews
and funding decisions. Accordingly, incorrect data or tenant information can lead
to wrong determinations being made by HUD regarding tenant eligibility,
subsidy, etc.
HUD’s Section 8 Management Assessment Program is used to evaluate the
performance of housing authorities. It is a gauging tool designed to
• Determine whether the program is assisting eligible families to afford
decent, safe, and sanitary housing (including correct assistance
determination),
• Gauge the performance in crucial areas and ascertain program integrity
and accountability,
• Identify management capabilities/deficiencies and target assistance
where needed, and
• Assess whether the housing authority affirmatively promotes fair
housing.
Our review of the January 2005 Section 8 indicators disclosed that the Authority
had a late inspection rate of 9 percent. However, review of tenant files noted that
inspections were performed in a timely manner. Our review determined that the
inspection rate was incorrect as a result of inaccurate occupancy information
reported to HUD. The Authority’s computer system contained data pertaining to
non-program participants; i.e., the names and addresses of former Housing Choice
Voucher program participants of the Authority. Since these non-program
participants were not removed from the Authority’s system, former tenants no
longer participating in the program are reflected in HUD’s systems. Authority
officials agreed that the inspection rate was incorrect due to outdated information
pertaining to non-program participants in the Section 8 Management Assessment
Program data. Authority officials stated that it was not considered a priority to
update the information; however, at the completion of our review, the Authority
was in the process of resolving this issue.
4
HUD Housing Choice Voucher Program Guidebook 7420.10g, chapter 19
7
The Authority needs to ensure that the occupancy information reported to HUD is
current and accurate at all times. To accomplish this task, the Authority should
implement a quality control plan to ensure that the information that is reported to
HUD is current and accurate. Further, the Authority needs to match its rent roll
and system data to information in HUD’s system periodically and reconcile all
differences. As such, unless corrective action is taken, HUD will continue to have
access to inaccurate and incomplete data, which can negatively impact HUD’s
ability to properly assess the Authority’s performance.
Housing Units Contained Minor
Housing Quality Standards
Deficiencies
Based on our sample of 12 units, we found four units (33 percent) with minor
housing quality standards violations. Three of the four units had deficiencies that
were easily correctable. Examples of some of the deficiencies include batteries
removed from smoke detectors, peeling paint, missing and/or broken floor tiles,
and low water pressure in the kitchen. Only one unit had serious concerns
pertaining to gas leaking from the stove that required immediate repair. An
inspector employed by the Authority, who accompanied us on the unit
inspections, agreed with our observations.
Housing quality standards for the Section 8 program are established in 24 Code of
Federal Regulations 5 . All program housing must meet the housing quality
standards requirements throughout the tenancy period. The federal regulations 6
further requires housing authorities to inspect each leased unit at least annually to
determine whether HUD’s standards are met. Housing authorities must conduct
supervisory quality control inspections.
Our review determined that the Authority has adequate inspection procedures in
place and overall the units were in good condition. Our review of tenant files
disclosed that the Authority is diligent in making sure violations noted during
prior year inspections are corrected. For example, when the batteries were
removed from a smoke detector, Authority files contained documented evidence
that the units were reinspected to ensure compliance. In continuing with this
practice, the Authority needs to ensure that the minor housing quality standards
deficiencies we identified are corrected before they become a serious concern for
the well being of the Section 8 participants. According to the Authority inspector,
the landlords of the four units noted during our review will be informed of the
needed corrections. Further, the four units will be reinspected to ensure that the
repairs were made. If not, the housing assistance payment to the landlord will be
suspended.
5
24 Code of Federal Regulations 982.401
6
24 Code of Federal Regulations 982.405
8
Conclusion
Weaknesses in the controls relating to program operations, validity and reliability
of data, and compliance with regulations reduce the overall effectiveness of the
Housing Choice Voucher program. Although the weaknesses are attributable to a
lack of emphasis on certain procedures and controls, the Authority needs to
strengthen its controls over the (1) maintenance of the waiting list, (2)
recertification process, (3) reporting of occupancy data, and (4) correction of
minor housing quality standards deficiencies.
Recommendations
We recommend that the director, Public Housing Division, Buffalo Field Office,
require the Authority to:
1A. Develop and implement procedures to purge its waiting list to enable the
Authority to have current information on applicants who are likely to
reach the top of the waiting list in the next 12 months.
1B. Implement procedures and controls to ensure that the Section 8
recertification process is conducted in a timely manner.
1C. Develop and implement a quality control plan to ensure that the
information that is reported to HUD is current and accurate.
1D. Ensure that the minor housing quality standards deficiencies identified are
corrected within the required timeframes.
9
SCOPE AND METHODOLOGY
Our review focused on the Authority’s Section 8 Housing Choice Voucher
program. To accomplish our objectives, we
• Reviewed applicable HUD requirements and regulations.
• Interviewed HUD field office staff, as well as employees of the
Authority.
• Obtained an understanding of the Authority’s management controls as
they related to our objectives.
• Reviewed accounting records and files, financial statements, general
ledgers, year-end settlement statements, and program records
maintained at HUD and the Authority.
• Reviewed 12 of the Authority’s Section 8 client files to verify the
accuracy and completeness of the records, and to test the Authority’s
assistance level determinations.
• Examined inspection records maintained by the Authority and
conducted housing unit inspections related to the above 12 clients
files.
The review covered the period between January 1, 2004, and January 31, 2005;
however, it was extended as necessary. We performed our work from March
through June 2005. The review was conducted in accordance with generally
accepted government auditing standards.
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INTERNAL CONTROLS
Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:
• Effectiveness and efficiency of operations,
• Reliability of financial reporting, and
• Compliance with applicable laws and regulations.
Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined the following internal controls were relevant to our audit objectives:
• Program operations - Policies and procedures that management has
implemented to reasonably ensure that a program meets its objectives.
• Controls over the validity and reliability of data - Policies and procedures
that management has implemented to reasonably ensure that valid and
reliable data are obtained, maintained, and fairly disclosed in reports.
• Compliance with laws and regulations - Policies and procedures that
management has implemented to reasonably ensure that resource use is
consistent with laws and regulations.
• Safeguarding of resources - Policies and procedures that management has
implemented to reasonably ensure that resources are safeguarded against
waste, loss, and misuse.
We assessed the relevant controls identified above.
A significant weakness exists if management controls do not provide reasonable
assurance that the process for planning, organizing, directing, and controlling
program operations will meet the organization’s objectives.
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Significant Weaknesses
Based on our review the following items are significant weaknesses:
• Policies and procedures were not implemented to ensure that the waiting
list is current and purged regularly (see finding).
• Policies and procedures were not implemented to ensure that tenant
recertifications were completed in a timely manner (see finding).
• Quality Control procedures were not developed to ensure that occupancy
information submitted to HUD was current and accurate (see finding).
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Appendix A
AUDITEE COMMENTS AND OIG’S EVALUATION
Auditee Comments
Comment 1
13
Comment 2
Comment 2
14
Comment 2
15
OIG Evaluation of Auditee Comments
Comment 1 The Authority’s proposed action to purge the list for the number of applicants
expected to reach the top within the next twelve months is responsive to our audit
finding. However, although purging can require significant staff time and money,
depending upon the extent of the purge; purging the waiting list to maintain a list
of active applicants is more cost effective than risking decreased leasing rates
because of an outdated list.
Comment 2 The Authority’s proposed actions are responsive to our report.
16
Syracuse Housing Authority, Section 8 Housing Choice Voucher Program, Syracuse, New York
Published by the Department of Housing and Urban Development, Office of Inspector General on 2005-08-10.
Below is a raw (and likely hideous) rendition of the original report. (PDF)