oversight

Section 8 Housing Choice Voucher Program, City of Niagra Falls, NY404, Niagra Falls, NY

Published by the Department of Housing and Urban Development, Office of Inspector General on 2004-12-14.

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

                                                  U. S. Department of Housing and Urban Development
                                                                           New York/New Jersey Office
                                                                        Jacob K. Javits Federal Building
                                                                          26 Federal Plaza – Room 3430
                                                                             New York, NY 10278-0068




                                                                           MEMORANDUM NO:
                                                                                2005-NY-1801
December 14, 2004


MEMORANDUM FOR: Joan K. Spilman, Director, Public Housing Division, 2CPH


FROM: Alexander C. Malloy, Regional Inspector General for Audit, 2AGA


SUBJECT: Section 8 Housing Choice Voucher Program
         City of Niagara Falls, NY404
         Niagara Falls, NY

                                       INTRODUCTION

We completed an audit survey of the City of Niagara Falls’ Section 8 Housing Choice Voucher
program. The primary objective of our survey was to assess the City of Niagara Falls’
management controls and procedures over the administration of its Section 8 program to
determine whether any areas need additional audit coverage. The purpose of the assessments was
to determine whether the City of Niagara Falls (1) verified the accuracy of the information on
Section 8 applicants’ applications, as well as Section 8 participants’ recertification forms; (2)
properly calculated the amount of participants’ housing assistance payments; (3) ensured that
participants were provided decent, safe, and sanitary housing; and (4) ensured that it is accurately
reporting information to the U. S. Department of Housing and Urban Development (HUD).

The survey results show that the areas reviewed during our survey do not warrant additional
audit coverage. However, the results disclosed that the City of Niagara Falls’ controls over
complying with HUD’s reporting requirements are weak. The results of this disclosure are
contained in this memorandum with recommendations for corrective action. We provided a draft
copy of the report to the City of Niagara Falls, who generally agreed with the findings and
recommendations and declined to provide written comments to the draft report.

In accordance with HUD Handbook 2000.06, REV-3, within 60 days, please provide us for each
recommendation in this memorandum, 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 the report is
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issued for any recommendation without a management decision. Also, please furnish us copies
of any correspondence or directives issued because of our review.

                               METHODOLOGY AND SCOPE

We performed our onsite work at the City of Niagara Falls Leased Housing Office and the HUD
Buffalo Field Office. Generally, the survey covered the period between January 1, 2003, and
August 31, 2004; however, it was extended as necessary. Our onsite survey work was conducted
between September and November 2004.

We interviewed members of HUD’s staff and employees of the City of Niagara Falls. Also, we
reviewed program records maintained at HUD and the City of Niagara Falls.

                                       BACKGROUND

The City of Niagara Falls administers Section 8 programs consisting of a voucher program with
788 vouchers and a moderate rehabilitation grant with 15 units. Also, the City of Niagara Falls
manages 349 vouchers of the New York State Division of Community Renewal’s Section 8
program in Niagara County, NY. Our survey focused on the 788 vouchers. For these vouchers,
the City of Niagara Falls has been authorized $3,278,661, of which $2,900,929 was disbursed
during fiscal year 2004. The Section 8 program’s waiting list consists of 1,100 applicants.

                                     SURVEY RESULTS

Our survey results show that the City of Niagara Falls is generally administering its Section 8
program in accordance with the program’s requirements. However, the survey results disclosed
weaknesses over the controls relating to HUD’s reporting requirements. We found that incorrect
Social Security numbers were entered into, and participants’ actions were not recorded in
HUD’s Multifamily Tenant Characteristics System.

Incorrect Social Security Numbers Were Entered into the Multifamily Tenant
Characteristics System

We found that the Social Security numbers for three Section 8 participants were incorrectly
entered into HUD’s Multifamily Tenant Characteristics System. For two of the participants, the
City of Niagara Falls entered incorrect Social Security numbers into its own computer system
and uploaded them into the HUD system. In both cases, the City of Niagara Falls made the
changes in its own system but failed to ensure that the corrections were recorded in the HUD
system. The Director of the Section 8 program indicated that officials of the program believed
that they performed the correct procedures for a Social Security number change in the City of
Niagara Falls’ system. However, the HUD system rejected the submissions because there were
no records of the correct Social Security numbers in the HUD system. The Director has been
communicating with HUD officials to determine how to properly reflect the changes.

Regarding the third participant, we found that the City of Niagara Falls entered an invalid Social
Security number into the Multifamily Tenant Characteristics System. The error was not



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discovered throughout the time the participant received Section 8 benefits. Based on these
results, we examined the current information in the Multifamily Tenant Characteristics System
and found that four participants were entered into the system twice with different Social Security
numbers. The Social Security numbers differed by one digit for each duplicate participant. We
provided a list of the duplicate participants to the City of Niagara Falls so the necessary
corrections can be made.

Two negative effects of an incorrect Social Security number are (1) participants can receive
Section 8 benefits from more than one public housing authority without being readily detected
and (2) information, such as income, can not be properly verified when performing computer
matching of data in computer systems of other agencies, such as the Social Security
Administration, the Internal Revenue Service, and the New York State Department of Social
Services.

Participants’ Actions Were Not Recorded in the Multifamily Tenant Characteristics
System

For three cases, we found that participants’ actions were not recorded in the HUD Multifamily
Tenant Characteristics System. In one case, the participant had ended participation in the
program; however, that action was not recorded in the HUD system. The City of Niagara Falls
recorded the action in its own computer system, which did not upload the data into the HUD
system. The Director is working with their computer system software personnel to determine
why this occurred. The City of Niagara Falls assumed that actions recording the end of
participants’ participation were correctly reflected in the HUD system since those participants
were removed from the City of Niagara Falls’ system.

Regarding the other two cases, earlier participant actions were not recorded in the Multifamily
Tenant Characteristics System. The Director of the Section 8 program believes that in one case,
the data was not uploaded to the HUD system due to a software upgrade. In the other case, the
Director believes that an error was made when the information was originally uploaded to the
HUD system. The City of Niagara Falls made the correction in its system; however, the
information was not automatically transmitted to the HUD system. The Director is working with
HUD officials to determine how to record the transactions.

HUD requires public housing authorities to input participants’ actions, including voucher
issuance, voucher expiration, annual reexamination, end of participation, and others, in the
Multifamily Tenant Characteristics System. At least one participant action should occur yearly
and be entered into the system. We pulled information from the Multifamily Tenant
Characteristics System and found 38 instances in which the system indicated that no participant
action had taken place within a year. At the time of our survey completion, the City of Niagara
Falls was performing the work necessary to resolve this issue.

The “Housing Choice Voucher Program Guidebook” provides that the Multifamily Tenant
Characteristics System is the Department’s automated system for recording demographic
information about assisted families and data about units they occupy. It states further that HUD
uses the data to monitor and assess each public housing authority’s performance. We believe that



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the City of Niagara Falls needs to ensure that the information in the Multifamily Tenant
Characteristics System is current and accurate at all times. To accomplish this task, the City of
Niagara Falls should implement a quality control plan to ensure that the information that is
reported to HUD is current and accurate. Further, the City of Niagara Falls needs to match its
rent roll and system data to the information in the HUD system periodically and reconcile all
differences.

                                   RECOMMENDATIONS

We recommend that the Director of the Public Housing Division, Buffalo Field Office,

   1A. Ensure that the City of Niagara Falls develop and implement a quality control plan that
       includes a periodic matching of its system to the Multifamily Tenant Characteristics
       System.

Should you or your staff have any questions, please contact Garry Clugston, Assistant Regional
Inspector General for Audit, at (716) 551-5755, extension 5901.




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