oversight

Housing Authority of the County of Cook, Chicago, Illinois, Had Weak Controls over Its Section 8 Housing Choice Voucher Program

Published by the Department of Housing and Urban Development, Office of Inspector General on 2006-09-30.

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

                                                                  Issue Date
                                                                           September 30, 2006
                                                                  Audit Report Number
                                                                           2006-CH-1021




TO:         Steven E. Meiss, Director of Public Housing Hub, 5APH


FROM:       Heath Wolfe, Regional Inspector General for Audit, 5AGA

SUBJECT: Housing Authority of the County of Cook, Chicago, Illinois, Had Weak Controls
           over Its Section 8 Housing Choice Voucher Program

                                    HIGHLIGHTS

 What We Audited and Why

             We audited the Housing Authority of the County of Cook’s (Authority) Section 8
             Housing Choice Voucher program (program). The audit was part of the activities
             in our fiscal year 2005 annual audit plan. We selected the Authority based upon a
             risk analysis that identified it as having a high-risk program. Our objective was to
             determine whether the Authority managed its program in accordance with the
             U.S. Department of Housing and Urban Development’s (HUD) requirements.
             This is the second of two audit reports of the Authority’s program.

 What We Found

             The Authority’s program controls had weaknesses in the areas of housing
             assistance payment calculations, the Family Self-Sufficiency Program, and
             household portability. Of the 70 households’ files statistically selected for
             review, the Authority incorrectly calculated housing assistance payments for 26
             and lacked supporting documentation regarding admission and selection for five
             households. This resulted in the Authority paying nearly $28,000 in
             overpayments of program housing assistance and utility allowances and more than
             $47,000 in unsupported housing assistance.

             The Authority failed to adequately use HUD’s Enterprise Income Verification
             system to determine that reported zero-income households had unreported income
           resulting in more than $62,000 in improper housing assistance and utility
           allowance payments. It also did not monitor and correct escrow balances of its
           Family Self-Sufficiency Program participants and accurately account for
           payments related to household portability. The Authority took proper abatement
           actions regarding housing assistance and maintained its waiting lists in
           accordance with HUD’s requirements.

           As a result of the deficiencies previously mentioned, program funds were not
           always used efficiently and effectively, and fewer funds were available to assist
           low- and moderate-income families on the Authority’s waiting list.

What We Recommend

           We recommend that the director of HUD’s Chicago Office of Public Housing
           require the Authority to reimburse its program from nonfederal funds for the
           improper use of program funds, provide support or reimburse its program from
           nonfederal funds for the unsupported housing assistance payments and related
           administrative fees, and implement adequate procedures and controls to address
           the findings cited in this audit report. These procedures and controls should help
           ensure that more than $3 million in program funds are spent on housing assistance
           payments that meet HUD’s requirements.

           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 our discussion draft audit report to the Authority’s executive
           director, its board chair, and HUD’s staff during the audit. We held an exit
           conference with the Authority’s executive director on September 19, 2006.

           We asked the Authority’s executive director to provide comments on our
           discussion draft audit report by September 25, 2006. The Authority’s executive
           director provided written comments dated September 25, 2006. The Authority
           disagreed with some of our findings and recommendations, and provided
           supporting documentation for most of the unsupported housing assistance
           payments cited in our discussion draft audit report. The complete text of the
           written comments, except for two binders of supporting documentation that were
           not necessary to understand the executive director’s comments, along with our
           evaluation of that response, can be found in appendix B of this report. We
           redacted the names of households cited in the executive director’s comments prior
           to including them in this audit report. The Authority provided HUD’s director of
           the Chicago Office of Public Housing with a complete copy of the Authority’s
           written comments plus the two binders of supporting documentation.



                                            2
                              TABLE OF CONTENTS

Background and Objectives                                                              4

Results of Audit

        Finding 1: Housing Assistance Payment Calculations Were Inaccurate             5

        Finding 2: The Authority’s Zero-Income Households Had Unreported Income        8

        Finding 3: Controls over the Authority’s Program Admission and Selection       11
                   Were Generally Effective

        Finding 4: The Authority Did Not Properly Manage Its Family Self-Sufficiency
                   Program                                                             14
        Finding 5: The Authority’s Controls over Household Portability Were Weak       18

Scope and Methodology                                                                  21

Internal Controls                                                                      23

Followup on Prior Audits                                                               25

Appendixes

   A.   Schedule of Questioned Costs and Funds to Be Put to Better Use                 26
   B.   Auditee Comments and OIG’s Evaluation                                          27
   C.   Criteria                                                                       41
   D.   Household Files Missing Documentation                                          43




                                              3
                       BACKGROUND AND OBJECTIVE

The Housing Authority of the County of Cook (Authority) is the second largest public housing
authority in Illinois. It is a municipal corporation established in 1946 under the Illinois Housing
Act to engage in the acquisition, development, leasing, and administration of a low-rent housing
program and other federally assisted programs.

The Authority administers a Section 8 Housing Choice Voucher program (program) funded by
the U.S. Department of Housing and Urban Development (HUD) in 122 suburban communities
in Cook County, Illinois. The Authority provides assistance to low- and moderate-income
individuals seeking decent, safe, and sanitary housing by subsidizing rents with owners of
existing private housing. As of August 7, 2006, the Authority had 10,683 units under contract
with annual housing assistance payments totaling more than $101 million in program funds.

Our objective was to determine whether the Authority managed its program in accordance with
HUD’s requirements. This is the second of two audit reports of the Authority’s program.




                                                 4
                                 RESULTS OF AUDIT

Finding 1: Housing Assistance Payment Calculations Were Inaccurate
The Authority did not always compute housing assistance payments accurately. Of the 70
households’ files statistically selected for review, the Authority failed to calculate correctly 26
(37 percent) households’ housing assistance and utility allowance payments. This occurred
because the Authority lacked adequate procedures and controls to ensure that it followed HUD’s
requirements. As a result, the Authority overpaid nearly $28,000 and underpaid more than
$2,900 in housing assistance and utility allowance payments.


 Incorrect Housing Assistance
 Payment Calculations


               According to HUD’s regulations at 24 CFR [Code of Federal Regulations]
               5.240(c), public housing authorities must verify the accuracy of the income
               information received from program households and change the amount of the
               total tenant payment, tenant rent or program housing assistance payment, or
               terminate assistance, as appropriate, based on such information.

               From the Authority’s 11,583 active program households as of September 23,
               2005, we statistically selected 70 households’ files to determine whether the
               Authority accurately verified and calculated the income information received
               from the households for their housing assistance and utility allowance payments
               for the period April 1, 2004, through March 31, 2006. Our review was limited to
               the information maintained by the Authority in its households’ files. Of the 70
               files reviewed, 26 had discrepancies in the calculation of income that resulted in
               annual income miscalculations. Two files did not include adequate
               documentation to support the Authority’s income calculation for the households
               (5147 and 24259), and the Authority was unable to locate one household file
               (32374) for review. Therefore, HUD and the Authority lack assurance that the
               housing assistance and utility allowance payments for the three households was
               accurate.

               The Authority miscalculation of households’ income resulted in $27,201 in
               overpayments and $2,911 in underpayments of housing assistance and utility
               allowances. Further, the Authority overpaid $528 and underpaid $15 in utility
               allowances. We provided the Authority’s deputy executive director and the
               director of HUD’s Chicago Office of Public Housing with schedules of the
               overpayments and underpayments of the housing assistance and utility allowances
               for the 26 households.

               The following are examples of the types of errors found:




                                                 5
             •   The Authority miscalculated the annual income for household number 16006
                 due to a miscalculation of income from self-employment. HUD’s Housing
                 Choice Voucher Program Guidebook 7420.10, chapter 9, page 5-19, requires
                 income to be included from self-employment as the net income or the gross
                 income from business less business expenses. However, the Authority used
                 the gross income from business as the annual income for the household’s 2004
                 and 2005 annual certifications. As a result, the Authority underpaid the
                 household’s housing assistance by $1,860 for both years.

             •   The Authority miscalculated the adjusted annual income for household
                 number 25234 due to a miscalculation of medical expenses. The Authority
                 only calculated the medical expenses for the head of household and excluded
                 the medical expenses for the spouse on the 2004 annual certification. As a
                 result, the Authority underpaid the household’s housing assistance by $264 for
                 2004.

             •   The Authority miscalculated the payment standard for household number
                 6070 due to an incorrect unit size. The Authority failed to correct the
                 household’s unit size at the 2004 certification. The household, a single
                 individual, resided in a two-bedroom unit at the 2004 and 2005 certifications.
                 However, an additional household member moved out of the unit on July 1,
                 2004. The household’s recertification was due in December 2004 and the
                 Authority allowed the household to receive the benefits of the two-bedroom
                 unit. As a result, the Authority overpaid the household’s housing assistance
                 by $2,111 for December 2004 through August 2005.

Cause for Miscalculations


             Payments were not always computed accurately because the Authority lacked
             effective prcedures and controls to ensure that all income and expenses were
             properly considered so that accurate housing assistance and utility allowance
             payments could be calculated. The Authority did not use households’ appropriate
             annual or adjusted annual income, unit size, or utility allowances or calculate
             household expenses for payments. It also failed to exercise proper supervision
             and oversight of the certification process. The Authority’s program supervisors
             said they conducted periodic quality control reviews of files to determine whether
             staff accurately calculated households’ housing assistance and utility allowance
             payments. However, the Authority could not provide documentation to support
             the reviews. Periodic quality control reviews are an important step in ensuring
             that the Authority’s housing assistance and utility allowance payments are
             accurate.

Conclusion

             HUD lacked assurance that the Authority used its program funds efficiently and
             effectively since it overpaid $27,729 and underpaid $2,926 in housing assistance


                                              6
          and utility allowance payments. Unless corrections to its certification process are
          realized, we estimate that the Authority could make more than $2.6 million in
          excessive payments over the next year based on the error rate found in our sample
          and the net overpayment of housing assistance and utility allowances. Our
          methodology for this estimate is explained in the Scope and Methodology section
          of this audit report. The Authority could put these funds to better use if proper
          procedures and controls are put in place to ensure the accuracy of housing
          assistance and utility allowance payments.

Recommendations

          We recommend that the director of HUD’s Chicago Office of Public Housing
          require the Authority to

          1A.     Reimburse its program $27,729 ($27,201 in housing assistance and $528
                  in utility allowances) from nonfederal funds for the overpayment of
                  housing assistance and utility allowance payments cited in this finding.

          1B.     Reimburse the applicable households $2,926 ($2,911 in housing assistance
                  and $15 in utility allowances) from its fiscal year 2005 program funds for
                  the underpayment of housing assistance and utility allowance payments
                  cited in this finding.

          1C.     Provide documentation to support the housing assistance and utility
                  allowance payments for the three households (5147, 24259, and 32374)
                  cited in this finding. For any overpayment or underpayment, the
                  Authority should reimburse its program the applicable amount from
                  nonfederal funds or reimburse the applicable household for the appropriate
                  amount.

          1D.     Implement adequate procedures and controls to ensure that its calculations
                  regarding households’ housing assistance and utility allowance payments
                  are correct as required by HUD. These procedures and controls should
                  help to ensure that an estimated $2,619,182 in housing assistance and
                  utility allowance payments are accurate over the next year.




                                           7
Finding 2: The Authority’s Zero-Income Households Had Unreported
                               Income
The Authority did not use HUD’s Enterprise Income Verification system (system) to determine
that reported zero-income households had unreported income. Of the 62 households statistically
selected for review, 25 had unreported income that affected their housing assistance payments.
This occurred because the Authority lacked adequate procedures and controls to perform
appropriate income verification. As a result, it unnecessarily paid housing assistance and utility
allowance payments totaling more than $62,000 for households that were required to meet their
rental obligations.



 Income Verification Not
 Performed

               We statistically selected 62 zero-income households from the Authority’s 779
               zero-income households as of September 23, 2005, to determine whether they had
               income according to HUD’s system for the period April 1, 2005, through June 30,
               2006. Of the 62 households reviewed, 25 had income not reported to the
               Authority but income information was available through HUD’s system.
               Therefore, the Authority provided excessive housing assistance and utility
               allowance payments for households. Our review was limited to the information
               maintained in HUD’s system.

               The following are examples of households with unreported income:

               •   The head of household 700878 had income, according to HUD’s system,
                   totaling $18,352. Since the household had income, the Authority overpaid
                   $589 in housing assistance and $64 in utility allowance per month. The total
                   overpayment for this household was $11,754 from January 2005 to June 2006.

               •   Household 023542 had income, according to HUD’s system, totaling $33,132.
                   Since the household had income, the Authority overpaid $689 in housing
                   assistance and $38 in utility allowance per month. The total overpayment for
                   this household was $8,724 from January to December 2005.

               According to HUD’s Public and Indian Housing Notice 2005-9, as a possible way
               to reduce costs, program households can be required to report all increases in
               income between reexaminations, and public housing authorities can conduct more
               frequent interim income reviews for families reporting no income. The
               Authority’s program operations manual states that tenants who report that they do
               not have any source of income should be questioned closely to ensure that they do
               not have income of any sort and to determine how they expect to pay for
               necessities. Further, the Authority requires it zero-income households to certify
               that any willful failure to report all household income may subject their
               application for eligibility to disqualification.



                                                8
Cause for Overpayments

             The overpayment of $51,244 in housing assistance and $11,121 in utility
             allowances to households that reported zero income but had income occurred
             because the Authority lacked adequate procedures and controls for performing
             appropriate income verification. The Authority did not have procedures requiring
             more frequent reviews of its zero-income households or determining when and
             how the reviews should be conducted. Some of the Authority’s program staff
             used HUD’s system to determine whether households had unreported income.
             The Authority needs to make full use of HUD’s system or other third-party
             income verification for all households at the time of examinations.

             Further, the Authority’s program managers did not conduct periodic supervisory
             reviews to ensure that staff took appropriate steps to determine whether
             households who reported zero income had unreported income. Periodic quality
             control reviews are an important step in ensuring that the Authority’s housing
             assistance and utility allowance payments are accurate.

Conclusion

             HUD lacks assurance that the Authority used its program funds efficiently and
             effectively. Unless corrections to its certification process are realized, we
             estimate that the Authority could make more than $776,000 in excessive housing
             assistance and utility allowance payments over the next year based on the error
             rate found in our sample. Our methodology for this estimate is explained in the
             Scope and Methodology section of this audit report. The Authority could put
             these funds to better use if proper procedures are put in place to ensure the
             accuracy of housing assistance and utility allowance payments.

Recommendations


             We recommend that the director of HUD’s Chicago Office of Public Housing
             require the Authority to

             2A.    Pursue collection from the applicable households or reimburse its program
                    $62,365 ($51,244 in housing assistance and $11,121 in utility allowances)
                    from nonfederal funds for the overpayment of housing assistance and
                    utility allowance payments cited in this finding.

             2B.    Implement adequate procedures and controls to ensure that its households
                    that report zero income do not have income that would result in an
                    overpayment of housing assistance and utility allowances. These
                    procedures and controls should help to ensure that an estimated $776,236
                    in housing assistance and utility allowance payments are accurate over the
                    next year.



                                             9
2C.   Review the remaining 717 (779 minus 62) zero-income households as of
      September 23, 2005, to determine whether they had unreported income.
      For households that received excessive housing assistance and utility
      allowance payments, the Authority should pursue collection and/or
      reimburse its program the applicable amount from nonfederal funds.

2D.   Terminate the program housing assistance to the applicable households
      that certified they had no income when in fact they had income according
      to HUD’s system.




                              10
Finding 3: Controls over the Authority’s Program Admission and
                 Selection Were Generally Effective
The Authority’s controls over program households’ admission and selection were generally
effective. Of the 70 households’ files statistically selected for review, the Authority did not
maintain adequate supporting documentation regarding program eligibility for five households.
This occurred because the Authority needed to improve its procedures and controls over its
household admission and selection process. As a result, HUD and the Authority lacked
assurance that more than $47,000 in program funds supported eligible low- and moderate-
income households.



 Files Lacking Adequate
 Eligibility Documentation

              From the Authority’s 11,583 active program households as of September 23,
              2005, we statistically selected 70 households’ files for review by using EZ Quant
              Dollar Unit Variable Statistical Sampling System software. We reviewed the 70
              files to determine whether the Authority maintained adequate documentation to
              support the households’ admission to and selection for its program. There were
              five documents missing from the 70 files. The following chart details the number
              of items missing by category for the 70 households’ files.


                     Of the 70 files reviewed, there were a total
                               of 5 unsupported items



                            1



                                                         2
                                                                    Citizenship certification
                                                                    Form 9886
                                                                    Annual inspection




                            2




              The Authority must maintain complete and accurate accounts and other records
              for its program in a manner that permits a speedy and effective audit as required
              by 24 CFR [Code of Federal Regulations] 982.158(a). The Authority must keep a



                                                 11
           copy of the executed lease, the housing assistance contract, and the household’s
           application for the term of each assisted lease—and for at least three years
           thereafter.

           HUD requires the Authority to determine a household’s eligibility for the program
           by conducting background verifications and obtaining proof of Social Security
           numbers and certifications of citizenship. Two files did not include a signed
           certification from household members claiming to be U.S. citizens or eligible
           residents, and one of the Authority’s files lacked documentation to support that an
           annual unit inspection was performed within 12 months of its previous inspection.
           Additionally, two files did not include Form 9886, Authorization for the Release
           of Information and Privacy Act Notice. Appendix D of this report shows the
           documentation missing for the 70 households’ files reviewed.

Causes for Unsupported
Documentation

           The Authority needed to improve its procedures and controls over program
           households’ files. Its staff created multiple files from a household’s master file,
           thereby enabling several staff to work on the same file. However, this process
           resulted in missing paperwork or in some instances, a failure to obtain the
           required documentation since the Authority did not have an effective system for
           locating all files for program households. During the audit, the Authority was in
           the process of converting to an electronic system to enable staff to access
           household information electronically and update each file in real time. Once the
           file conversion was completed, the Authority was able to locate most of the
           supporting documentation that was missing during our audit. The Authority
           provided the supporting documentation after our on-site audit work was
           completed.

           The Authority’s program supervisors said they conducted periodic quality control
           reviews of files to determine whether staff obtained required documentation for
           determining households’ eligibility for admission and selection. The Authority
           could not provide documentation to support the reviews. Periodic quality control
           reviews are an important step in ensuring that the Authority’s program household
           files continue to contain required eligibility documentation.

HUD Funds Not Effectively
Used

           The Authority paid $43,435 in unsupported housing assistance for five of the 70
           households during the period April 1, 2004, through August 31, 2005. Further,
           the Authority received $4,028 in program administrative fees related to the five
           households. Since the Authority lacked documentation to support the payment of
           the five households’ housing assistance, HUD and the Authority lacked assurance
           that the assistance benefited eligible low- and moderate-income households.



                                            12
Recommendations

          We recommend that the director of HUD’s Chicago Office of Public Housing
          require the Authority to

          3A.     Provide supporting documentation or reimburse its program $47,463
                  ($43,435 in housing assistance payments plus $4,028 in related
                  administrative fees) from nonfederal funds for the unsupported housing
                  assistance payments and related administrative fees for the five
                  households cited in this finding.

          3B.     Implement adequate procedures and controls to ensure that it maintains all
                  required documentation in program household files to support housing
                  assistance and utility allowance payments in accordance with HUD’s
                  requirements.




                                          13
Finding 4: The Authority Did Not Properly Manage Its Family Self-
                         Sufficiency Program
The Authority failed to meet HUD’s requirements regarding the administration of its Family
Self-Sufficiency Program. The Authority’s Family Self-Sufficiency Program did not (1) have a
coordination committee or hold regular meetings to discuss ways to secure commitments of
public and private resources for its operation, (2) verify whether participating households were
employed or seeking employment, and (3) provide households with annual escrow account
statements. Further, 10 of 26 households reviewed had their escrow account balances
inaccurately calculated at least once during the scope of our audit. These deficiencies occurred
because the Authority lacked adequate procedures and controls over its Family Self-Sufficiency
Program. As a result, the Authority’s Family Self-Sufficiency Program was not operating as
HUD intended, and the Authority overfunded households’ escrow accounts by more than $1,600
and underfunded them by more than $2,700 plus applicable interest.



 Program Coordination
 Committee

              As of July 2006, the Authority had not established a coordination committee for
              its Family Self-Sufficiency Program. The Authority’s special program manager
              said the Authority had not held applicable meetings since March 2004 although it
              planned to meet quarterly. According to 24 CFR [Code of Federal Regulations]
              984.202, each participating public housing authority must establish a program
              coordination committee, the functions of which will be to assist the authority in
              securing commitments of public and private resources for the operation of the
              Family Self-Sufficiency Program within the authority’s jurisdiction, including
              assistance in developing the action plan and in program implementation.

 Actively Seeking Employment


              The Authority did not followup on households to determine whether they were
              employed or seeking employment in accordance with 24 CFR [Code of Federal
              Regulations] 984.303(b)(4). Two organizations provided services to the
              Authority’s Family Self-Sufficiency Program households.

              One of the organizations provided quarterly cumulative statistics and a report
              regarding the households’ employment or education status to the Authority.
              However, the Authority did not document the information from these reports in
              the households’ files or use the information from these reports for monitoring
              purposes. The organization had not provided the Authority with any written
              reports on the households’ employment status as of July 2006. However, the
              organization provided reports to the Authority when it inquired about the job or
              education status of a household. However, the Authority did not document the
              information it received from the organization in the households’ files.



                                               14
Escrow Account Statements


           The Authority did not correctly calculate the escrow balances for the participating
           households. There was a total of $1,605 plus earned interest overfunded and
           $2,711 plus earned interest underfunded to the households’ escrow accounts. In
           addition, households were not aware of the balances in their accounts since they
           did not receive annual statements.

           We reviewed a sample of 26 of the Authority’s 190 participating households’ files
           as of December 2005 and determined that 10 households had their escrow
           accounts credited inaccurately, at least once, between April 1, 2004, and August
           31, 2005. In addition, there were two households (28852 and 702827) for which a
           determination of their escrow balances of $40,592 ($11,405 and $29,187,
           respectively) could not be verified because the Authority was unable to provide
           supporting documentation from the households’ files. The following table details
           the overfunded and underfunded escrow accounts for the 10 households.


                             Incorrect escrow accounts
                      Household
                       number          Overfunded      Underfunded
                          347             $190
                         3499                               $268
                         4539                                 90
                         4766               383
                         9549               852
                        12961               180
                        21397                                 522
                        21571                                 387
                        41307                               1,054
                        41334                                 390
                        Totals            $1,605           $2,711

           For example, the escrow account for household number 41307 was underfunded
           by $1,054 plus any accrued interest because the Authority failed to update the
           escrow credit from the previous certification. Effective April 1, 2005, the
           Authority calculated the household’s earned income and escrow credit to be zero.
           At the next certification, effective July 1, 2005, the household’s earned income
           increased to $24,500, and the Authority should have increased the escrow credit
           to $527. However, the Authority kept it at zero, a difference of $527 per month
           for two months. This resulted in the underfunding of the account by $1,054. As
           of December 31, 2005, the household’s escrow account was $4,048 and it should
           have been $5,102.




                                           15
Cause for Deficiencies

             The deficiencies occurred because the Authority lacked adequate procedures and
             controls over its Family Self-Sufficiency Program. The Authority relied on its
             computer system to generate the escrow account credits for its households. The
             computer system used information from HUD Form 50058 to calculate the
             escrow account credit. The Authority’s program staff did not perform a quality
             control review of the information contained on the forms for accuracy to ensure
             that the amount of earned income was correct when determining the escrow
             account credit.

             The Authority’s Family Self-Sufficiency Program staff performed reviews of each
             household’s escrow account to ensure that the accounts were credited. However,
             the reviews did not include performing a verification of the annual income or
             allowances to ensure that the escrow credits were accurate since this was the
             responsibility of the Authority’s program staff. Therefore, the Family Self-
             Sufficiency Program staff relied upon the Authority’s program staff to have
             already verified the accuracy of the households’ earned income data from their
             annual recertifications or interim examinations.

Conclusion

             The Authority did not effectively manage its Family Self-Sufficiency Program.
             As a result, escrow credits were out of balance and households were not aware of
             the amounts credited to their accounts. In addition, the Authority did not closely
             monitor to ensure that all households complied with applicable employment
             requirements. Participants who do not comply with the Family Self-Sufficiency
             Program’s requirements should be terminated so that other households may
             participate. Allowing households to stay on the Family Self-Sufficiency Program
             when they were unemployed and not seeking employment prevented other
             households that wanted to actively participate from doing so.

Recommendations

             We recommend that the director of HUD’s Chicago Office of Public Housing
             require the Authority to

             4A.    Establish a coordination committee as required by HUD’s regulations.

             4B.    Maintain documentation in participating households’ files of their
                    employment or job-seeking status to ensure that they meet their contract of
                    participation and remove any households not employed or not actively
                    seeking employment.




                                             16
4C.   Reduce the escrow accounts for the five Family Self-Sufficiency Program
      households that were inaccurately credited for the $1,605 cited in this
      finding and any accrued interest.

4D.   Reimburse its seven Family Self-Sufficiency Program households’ escrow
      accounts that were not credited the $2,711 cited in this finding plus any
      interest.

4E.   Implement adequate procedures and controls regarding its Family Self-
      Sufficiency Program to ensure that participating households’ annual
      income calculations are accurate and complete, escrow credits are
      reviewed for accuracy, and households receive annual statements.

4F.   Provide adequate documentation to support the $40,592 deposited to the
      two households’ escrow accounts cited in this finding and adjust or
      reimburse the account(s) as appropriate.




                              17
Finding 5: The Authority’s Controls over Household Portability Were
                                Weak
The Authority had weaknesses in the accuracy of payments it made to receiving housing
authorities for port-out households and did not ensure that payments for port-in households were
accurate and received within prescribed timeframes. In addition, the Authority continued to
receive portability receipts for port-ins after absorbing the households. These weaknesses
occurred because the Authority did not adequately reconcile reports to track portability payments
and receipts and was not timely in notifying all housing authorities when it absorbed households.
As a result, the Authority made net overpayments of $2,938 for port-out households and needs to
return $10,336 in housing assistance payments for households that were absorbed.



 Port-Out Payments

              Our review of 25 randomly selected port-out households’ files showed that the
              Authority underpaid and overpaid receiving housing authorities for port-out
              households’ housing assistance. The Authority underpaid one receiving housing
              authority $138 and overpaid three receiving housing authorities $3,076. The total
              payment error was $3,214, and the net effect on housing assistance payments was
              an overpayment of $2,938.

              According to 24 CFR [Code of Federal Regulations] 982.355, the Authority must
              promptly reimburse the receiving housing authority for the full amount of the
              housing assistance payments made by the receiving housing authority for the
              portable households. Since the Authority did not always reimburse the receiving
              housing authority the correct amount of housing assistance payments, the
              Authority and HUD lack assurance that the port-out payments were correct.

 Receipts for Port-Ins
 Delinquent

              The Authority did not receive payments from housing authorities for port-in
              households within 30 days of the initial billing and by the fifth working day of
              each month for all subsequent payments in accordance with HUD’s requirements.
              Of the 67 port-in households’ files reviewed, the Authority initially billed housing
              authorities for 24 in 2005. For these 24 port-in households, the Authority did not
              receive payments within 30 days of the initial billing for 16 (67 percent). For
              subsequent payments, the Authority did not receive payments for 31 of the 67 (46
              percent) port-in households by the fifth working day of the month. Most of the
              late payments were from the Chicago Housing Authority (15 of the 16 initial
              billings and 25 of the 31 subsequent payments). This resulted in large payments
              being received by the Authority. For example, in January 2005 and April 2006,
              the Chicago Housing Authority sent checks for $614,252 and $78,030,
              respectively.



                                               18
           The controller said that the Authority did not always notify housing authorities
           about late payments and it had not notified HUD as of June 2006. The
           Authority’s position was that it had sufficient program funds to cover any
           shortfalls due to abatements of housing assistance, moves, or other pending
           actions that would delay housing assistance payments.

           As of January 2006, there was $48,199 in outstanding housing assistance
           payments and administrative fees from housing authorities for port-in households.
           The Authority received payment for all but $18,766 by April 10, 2006. However,
           of the $48,199 in outstanding payments as of January 2006, only $33,683
           appeared on the Authority’s aging report. We identified the remaining
           outstanding payments by comparing the expected payments (from HUD Form
           52665 in the households’ files) to the Authority’s cash receipts reports. Of the
           $18,766 in outstanding payments as of April 10, 2006, only $12,656 appeared on
           the aging report due to differences in the amounts recorded on the aging and cash
           receipts reports. There was no evidence that the Authority routinely reconciled
           these two reports.

           The Authority needs to monitor the accuracy and timeliness of payments for port-in
           households by reconciling its cash receipts and aging reports on a periodic basis and
           notifying authorities of any late payments that are due. This will help to ensure that
           the Authority pursues program funds appropriately.

Payments for Absorbed
Portability Households

           Our review of 1,174 port-in households that the Authority had absorbed as of
           February 2006 showed that it still received payments for 25 households as of
           March 2006 because it failed to notify all affected housing authorities. The total
           payment received by the Authority for the 25 households in March 2006 was
           $10,336.

           According to HUD’s Public and Indian Housing Notices 2004-12 and 2005-28, if
           the Authority absorbs a household for which it has been billing or if it terminates
           the housing assistance payments for any reason, the Authority should provide
           adequate notice of the effective date of the absorption or termination to avoid
           having to return a payment. In no event should the Authority fail to notify the
           initial housing authority later than 10 working days following the effective date of
           the termination of billing arrangements. Since the Authority continued to receive
           payments for absorbed households, the Authority and HUD lack assurance that
           the Authority provided adequate notice of households’ absorptions to initial
           housing authorities regarding port-in payments.




                                             19
Recommendations


          We recommend that the director of HUD’s Chicago Office of Public Housing
          require the Authority to

          5A.     Pay the receiving housing authorities the $138 underpaid for port-out
                  households cited in this finding.

          5B.     Request reimbursement from the receiving authorities for the $3,076 in
                  overpaid housing assistance for port-out households cited in this finding.

          5C.     Perform periodic reconciliations of household portability information
                  forms with check listings by vendor reports to identify any discrepancies
                  with port-out payments made.

          5D.     Reconcile its cash receipts and aging reports for portability receipts on a
                  recurring basis to pursue discrepancies and notify authorities of any late
                  payments due.

          5E.     Repay the applicable housing authorities for the $10,336 in payments
                  received for absorbed port-in households cited in this finding.

          5F.     Implement adequate procedures and controls over its portability process to
                   include but not limited to notifying housing authorities for port-in
                   households that will be absorbed so that housing assistance payments are
                   not obligated unnecessarily.




                                           20
                         SCOPE AND METHODOLOGY

To accomplish our objective, we reviewed:

               •   Applicable laws, regulations, and HUD program requirements at 24 CFR [Code
                   of Federal Regulations] Parts 5, 982, and 984; HUD’s Public and Indian
                   Housing Notice 2005-9; HUD’s Housing Choice Voucher Guidebook 7420.10;
                   HUD’s reports and files for the Authority’s program; the Authority’s program
                   administrative plan effective May 2000; and its operations manual; and

               •   The Authority’s accounting records, annual audited financial statements for the
                   periods ending March 31, 2004, and 2005; general ledgers, bank statements and
                   cancelled checks for April 2004 through August 2005, program household files,
                   board meeting minutes for January 2004 through December 2005, organizational
                   chart, and program annual contributions contract with HUD.

We downloaded electronic data for the Authority’s program households as of September 23,
2005. We also interviewed the Authority’s employees, program households, and HUD staff.

From the Authority’s 11,583 active program participant households as of September 23, 2005,
we statistically selected 70 households’ files for review by using EZ Quant Dollar Unit Variable
Statistical Sampling System software. We reviewed the 70 files to determine whether the
Authority maintained adequate documentation to support the households’ admission and
selection for its program. We also reviewed the 70 files to determine whether the Authority
accurately verified and calculated the income information received from the households for their
housing assistance and utility allowance payments for the period April 1, 2004, through March
31, 2006. The Authority incorrectly calculated payments for 26 of the 70 files reviewed. This
resulted in total miscalculation of payments by $30,655—to include overpayments of $27,729
and underpayments of $2,926 in housing assistance and utility allowances.

Unless the Authority improves its calculation process, we estimate that it could make $2,619,182
in future excessive housing assistance and utility allowance payments. We determined this
amount by multiplying 2.93 percent (the percent of the total housing assistance and utility
allowance for the 70 households’ files in the sample that received excessive payments) times
$89,391,864 (the total payments for the population of households served). We determined the
2.93 percent by annualizing the net excessive payments of $24,803 ($27,729 in overpayments
minus $2,926 in underpayments) for our sample of 70 households divided by the $596,690 in
housing assistance and utility allowance payments for one year.

We determined an estimate of $776,236 in future housing assistance overpayments due to
underreporting of income by zero-income households during the next 12 months. To do this, we
applied a 10.5 percent error rate found during our review of 62 statistically selected zero-income
households’ files to the estimated average annual housing assistance payments disbursed by the
Authority for all of its zero-income households ($7,392,720). We determined this error rate by
dividing the overpaid housing assistance payments ($62,365) by the total housing assistance
payments made for the 62 households in our sample ($593,931) for the review period of January



                                                21
2005 through June 2006. We calculated the Authority’s average annual housing assistance
expense by annualizing the total payments made to the 779 zero-income households in our
sample’s population as of September 2005 ($616,060 times 12).

We performed our on-site audit work from November 2005 to June 2006 at the Authority’s former
program office, located at 310 South Michigan, Chicago, Illinois. The audit covered the period
April 1, 2004, through August 31, 2005. This period was expanded as necessary to accomplish our
objective.

We performed our audit in accordance with generally accepted government auditing standards.




                                              22
                             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,
   •   Compliance with applicable laws and regulations, and
   •   Safeguarding resources.

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 objective:

              •       Program operations - Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

              •       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 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 internal controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.




                                               23
Significant Weakness

           Based on our review, we believe the following item is a significant weakness:

           •   The Authority lacked adequate procedures and controls over calculations of
               households’ housing assistance and utility allowance payments, income
               verification for reported zero-income households, administration of the
               Family Self-Sufficiency Program; and household portability (see findings 1, 2,
               4, and 5).




                                            24
                       FOLLOWUP ON PRIOR AUDITS

This is the second audit of the Authority’s program by HUD’s Office of Inspector General (OIG).
The first audit report (report number 2006-CH-1012) issued on July 11, 2006, included three
findings. The three findings are not repeated in this audit report. The most recent independent
auditor’s report for the Authority covered the year ending March 31, 2005, and resulted in no
findings.




                                               25
                                   APPENDIXES

Appendix A

              SCHEDULE OF QUESTIONED COSTS
             AND FUNDS TO BE PUT TO BETTER USE

          Recommendation                                         Funds to be put
              number          Ineligible 1/    Unsupported 2/    to better use 3/

                 1A               $27,729
                 1B                                                        $2,926
                 1D                                                     2,619,182
                 2A                 62,365
                 2B                                                      776,236
                 3A                                   $47,463
                 4C                                                         1,605
                 4D                                                         2,711
                 4F                                    40,592
                 5A                                                          138
                 5B                                                        3,076
                 5E                                                       10,336
                Totals            $90,094             $88,055         $3,416,210


1/   Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
     that the auditor believes are not allowable by law; contract; or federal, state, or local
     policies or regulations.

2/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of audit. Unsupported costs
     required a 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.

3/   Recommendations that funds be put to better use are estimates of amounts that could be
     used more efficiently if an OIG recommendation is implemented. This includes
     reduction in outlays, deobligation of funds, withdrawal of interest subsidy costs not
     incurred by implementing recommended improvements, avoidance of unnecessary
     expenditures noted in preaward reviews, and any other savings that are specifically
     identified.




                                              26
Appendix B

        AUDITEE COMMENTS AND OIG’s EVALUATION

Ref to OIG Evaluation   Auditee Comments




Comment 1




                         27
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 3




                         28
Ref to OIG Evaluation   Auditee Comments




Comment 4




Comment 5




Comment 6




Comment 7




                         29
Ref to OIG Evaluation   Auditee Comments




Comment 8




Comment 9




Comment 10


Comment 11




                         30
Ref to OIG Evaluation   Auditee Comments




Comment 12




Comment 13




                         31
Ref to OIG Evaluation   Auditee Comments




                         32
Ref to OIG Evaluation   Auditee Comments




Comment 14




                         33
Ref to OIG Evaluation   Auditee Comments




                         34
Ref to OIG Evaluation   Auditee Comments




                         35
Ref to OIG Evaluation   Auditee Comments




                         36
                         OIG Evaluation of Auditee Comments

Comment 1   We would like to take this opportunity to commend the Authority on its continued
            efforts and commitment toward improving its program operations.

Comment 2   We reviewed the Authority’s supporting documentation for background
            verifications and adjusted finding 3.

Comment 3   We reviewed the supporting documentation provided by the Authority and
            determined that the verification of citizenship was still not provided for household
            numbers 9615 and 11277.

Comment 4   We reviewed the Authority’s supporting documentation regarding households’
            birth certificates and adjusted finding 3.

Comment 5   We reviewed the Authority’s supporting documentation regarding households’
            annual unit inspections and made adjustments to finding 3.

Comment 6   We reviewed the Authority’s supporting documentation regarding households’
            proof of Social Security numbers and made appropriate adjustments to finding 3.

Comment 7   We reviewed the Authority’s supporting documentation regarding households’
            annual applications and Form 9886, and adjusted finding 3. However, the
            Authority still lacked an application for household number 9299, and Form 9886
            for households 5147 and 27884.

Comment 8   We reviewed the Authority’s supporting documentation regarding households’
            Form 50058 and adjusted finding 3.

Comment 9   We reviewed the Authority’s supporting documentation for household 43002 and
            we disagree. The Authority was not consistent in the manner in which it averaged
            the monthly amount of child support received by the household. We based our
            calculation of the income from child support on the amount and frequency
            provided by the Illinois Department of Public Aid.

            Based on the Authority’s and our calculations of the housing assistance payment
            at the 2005 certification, the Authority should have paid $4,650 in housing
            assistance payments. However, when we checked the housing assistance payment
            schedule, it showed a total of $7,513 as the total amount paid in housing
            assistance payments.

            Based on the housing assistance payment schedule, the Authority overpaid $2,863
            in housing assistance payments. The Authority corrected this error and reissued
            new checks, but we could not determine whether the initial checks issued by the
            Authority were voided.




                                             37
                           OIG Evaluation of Auditee Comments

Comment 10 We disagree with the Authority’s calculation of income for household 10176.
           According to the documents provided, the household’s hourly rate decreased from
           $10 to $8 per hour effective January 4, 2005. On January 15, 2005, the earned
           income was $493 (61.63 hours times $8). As of the January 30, 2005, pay period,
           the household earned $640 (80 hours time $8). The Authority used the income
           earned during January 2005 and multiplied by 12 months for an annual income of
           $13,596. Based on the income earned on the January 30, 2005, paycheck (which
           was a full paycheck compared to the earnings on January 15, 2005) the household
           worked a 40 hour week and was paid semi-monthly (24 pay periods times $640
           average pay for half month) making the annual income $15,360. The Authority
           could have consulted the household’s employer regarding the number of hours
           worked during a pay period if this was unclear.

Comment 11 We reviewed the Authority’s supporting documentation for household 29782 and
           determined the Authority used the income from child support per the household’s
           and the provider of child support’s self-certification. However, we based our
           calculation of income from child support on the third-party verification conducted
           by the Authority. The Authority conducted third-party verification through the
           Department of Human Services. This third-party verification was kept with the
           other documents used for the 2004 certification. The documentation provided by
           the Authority was not dated, so we could not determine whether it was current.

Comment 12 We reviewed the Authority’s supporting documentation for household 9512,
           agree with the results, and made the appropriate revisions to our audit report.

Comment 13 We agree that HUD’s Public and Indian Housing Notice 2005-9 only suggests
           ways the Authority may reduce costs to its program. The Authority’s program
           operations manual states that tenants who report they do not have any source of
           income should be questioned closely to confirm they do not have income of any
           type, and to determine how they expect to pay for necessities. As a prudent
           management tool, the Authority should review the income of its zero-income
           tenants more frequently.

Comment 14 We only included unearned income in computing the total annual income. We
           did not include unearned income for the purpose of calculating the escrow credits.

              Household 347
              We disagree with the Authority’s calculated annual income. Five of the prior six
              pay periods before the certification the household earned $919. We used this as
              the biweekly pay amount. For one pay period, the household earned $980 that the
              Authority averaged with $919 to get a biweekly pay amount of $949. We do not
              agree with this methodology and maintain that the escrow account was
              overfunded by $190.




                                              38
             OIG Evaluation of Auditee Comments

Household 3499
We agree with the Authority that the escrow account was underfunded by $268
and made the appropriate adjustments to our audit report.

Household 3603
We agree that the escrow account was not underfunded for this household and
made the appropriate adjustments to our audit report.

Household 4539
We agree that the escrow account was underfunded by $90 and made the
appropriate adjustments to our audit report.

Household 4766
For the period April 1, 2004, through March 31, 2005, the Authority agreed that
the amount of earned income should be $20,312, but stated that this resulted in an
escrow credit of $191 a month. The actual escrow credit that it produced was
$167 a month, and the account was overfunded by $288 each month for April 1,
2004, through March 31, 2005.

For the period April 1, 2005, through August 31, 2005, the Authority used three
quarters of income to calculate the income for the household. We disagree with
the Authority using three quarters and determined that the escrow credit was
overfunded by $95 from April 1, 2005, through August 31, 2005. In total, the
escrow account was overfunded by $383.

Household 9549
The Authority agreed with our calculation that the escrow account was
overfunded by $852 for this household.

Household 12961
We agree with the Authority. There was a difference in income calculations. The
escrow account was overfunded by $180. We have made the appropriate
adjustments to our audit report.

Household 21397
The Authority agreed the escrow account was underfunded by $522.

Household 14208
We agree with the Authority that the escrow account for this household was not
underfunded and have made the appropriate adjustments to our audit report.

Household 21397
The Authority agreed with our calculation that the escrow account was
underfunded by $1,054.




                                39
             OIG Evaluation of Auditee Comments

Household 21571
For the period April 1, 2004, through April 31, 2005, the Authority agreed that the
escrow account was underfunded by $521. However, beginning May 1, 2005, the
Authority stated that we failed to include child support payments. We obtained a
document showing that child support payments ended September 24, 2004.
Therefore, we do not agree with the Authority’s position. The household’s
income must be based on employment, not child support. This resulted in an
escrow credit of $495 from April 1, 2005, to July 31, 2005, and was overfunded
by $134. As a result, the escrow account was underfunded in total by $387.




                                40
Appendix C
                                         CRITERIA

Finding 2
HUD’s regulations at 24 CFR [Code of Federal Regulations] 5.240 state that the responsible
entity must verify the accuracy of the income information received from the family and change
the amount of the total tenant payment, tenant rent, or Section 8 housing assistance payment or
terminate assistance, as appropriate, based on such information.

HUD’s Housing Choice Voucher Program Guidebook 7420.10, chapter 5, pages 5-31 through
32, states that the medical expense deduction is permitted only for households in which the head
or spouse is at least 62 years of age or disabled (elderly or disabled households). If the
household is eligible for a medical expense deduction, the medical expenses of all family
members may be counted. Medical expenses are expenses anticipated to be incurred during the
12 months following certification or reexamination, which are not covered by an outside source
such as insurance. The medical allowance is not intended to give a family an allowance equal to
the past year’s expenses but to anticipate regular ongoing and anticipated expenses during the
coming year.

Finding 3
HUD’s regulations at 24 CFR [Code of Federal Regulations] 982.551(b) states that (1) the
family must supply any information that the Authority or HUD determines is necessary in the
administration of the program, including submission of required evidence of citizenship or
eligible immigration status; (2) the family must supply any information requested by the
Authority or HUD for use in a regularly scheduled reexamination or interim reexamination of
family income and composition in accordance with HUD requirements; and (3) the family must
disclose and verify Social Security numbers and must sign and submit consent forms for
obtaining information.

HUD’s regulations at 24 CFR [Code of Federal Regulations] 982.553(a)(2)(i) state that the
Authority must establish standards that prohibit admission to the program if any member of the
household is subject to a lifetime registration requirement under a state sex offender registration
program. In this screening of applicants, the Authority must perform criminal history
background checks necessary to determine whether any household member is subject to a
lifetime sex offender registration requirement in the state where the housing is located and in
other states where the household members are known to have resided.

HUD’s Housing Choice Voucher Program Guidebook 7420.10, chapter 5, page 12, states that
participation in the program places an obligation on the family to provide information required
by HUD and the Authority when requested and to cooperate in efforts to verify the information
provided. Disclosure of Social Security numbers and signatures on HUD’s release authorization
form are minimum program requirements.




                                                41
The Authority must require applicants and program participants to disclose the Social Security
numbers of all family members age six or older, as a condition of admission and continued
assistance. Persons who have not been assigned a Social Security number must execute a
certification stating that no Social Security number has been assigned. This process need occur
only one time for each family member. New family members, age six or older, should be
required to disclose or certify at the time the change in family composition is reported to the
Authority or the next annual recertification after a family member reaches age six. A parent or
guardian must provide the certification for a minor.

The Authority must document the Social Security number disclosed by each family member. If
the family member cannot produce an original Social Security card issued by the Social Security
Administration, the Authority may accept one of the following as verification if it includes the
Social Security number: a driver’s license with Social Security number; identification card issued
by a federal, state, or local agency; identification card issued by a medical insurance company or
provider (including Medicare and Medicaid); or identification card issued by an employer or
trade union.

The Authority’s operations manual states that new program applicants are required to provide a
copy of documentation of the Social Security numbers of all household members. This also
applies to persons who are added to households of current participants for each household
member age six or older. New applicants cannot be offered assistance until the requirements are
met. If they refuse to provide the necessary documentation or certification they should be sent a
letter of ineligibility.

HUD’s regulations at 24 CFR [Code of Federal Regulations] 982.201(a) state that the Authority
may only admit an eligible family to the program. To be eligible, the applicant must be a
“family” and must be a citizen or a noncitizen who has eligible immigration status.

HUD’s Housing Choice Voucher Program Guidebook 7420.10, chapter 5, page 3, states that
eligibility for federal housing assistance is limited to United States citizens and applicants who
have eligible immigration status. Persons claiming eligible immigration status must present
appropriate immigration documents that must be verified by the Authority through the
Immigration and Naturalization Service. Every applicant household for (and participant in) the
program must sign a certification for every household member, either claiming status as a United
States citizen or an eligible alien or stating the individual’s choice not to claim eligible status and
acknowledge ineligibility.

Finding 4
HUD’s regulations at 24 CFR [Code of Federal Regulations] 984.305(a)(3), state that each
authority will be required to make a report, at least once annually, to each Family Self-
Sufficiency Program participant on the status of the family’s account. At a minimum, the report
will include (i) the balance at the beginning of the reporting period, (ii) the amount of the
family’s rent payment that was credited to the family self-sufficiency account during the
reporting period, (iii) any deductions made from the account for amounts due the Authority
before interest is distributed, (iv) the amount of interest earned on the account during the year,
and (v) the total in the account at the end of the reporting period.




                                                  42
          Appendix D

                     HOUSEHOLD FILES MISSING DOCUMENTATION
                                                                                                        Authorization
                                                                                                        for Release of
                            Citizenship        Birth        Annual      Proof of Social                  Information       Annual
                            certification   certificates    housing        Security                      and Privacy     certification
                               for all        for all       quality       numbers-                       Act Notice         (HUD            Total
Household    Background     household       household      standards    everyone over      Annual       (HUD Form           Form         unsupported
 number         check        members        members        inspection         six         application       9886)          50058)         payments
  5147       Not required       Yes            Yes            Yes             Yes            Yes           No (1)            Yes           6,604
  9299       Not required       Yes            Yes            Yes             Yes            No             Yes              Yes           13,271
  9615       Not required       No             Yes            Yes             Yes            Yes             Yes             Yes           12,126
 11277       Not required       No             Yes            Yes             Yes            Yes             Yes             Yes           5,260
 27884       Not required       Yes            Yes            Yes             Yes            Yes             No              Yes           10,202
Totals                           2               0             0              0               1               2               0          $47,463



          (1) – Missing documentation for one of the two years reviewed.

          Not required – Households were on the program prior to background checks being required.




                                                                         43