oversight

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)

       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.




                                10
                             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.




                                               11
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).




                                           12
       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