Oklahoma City Housing Authority, Oklahoma City, Oklahoma, Generally Complied with HUD�s Standards

Published by the Department of Housing and Urban Development, Office of Inspector General on 2006-12-08.

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

                                                              Issue Date
                                                                       December 8, 2006
                                                              Audit Report Number

TO:        Jerry D. Hyden
           Program Center Coordinator, Office of Public Housing, 6IPH

           Frank E. Baca
           Regional Inspector General for Audit, Fort Worth Region, 6AGA

SUBJECT: Oklahoma City Housing Authority, Oklahoma City, Oklahoma, Generally
         Complied with HUD’s Standards


 What We Audited and Why

             We conducted a review of the Oklahoma City Housing Authority (Authority) to
             determine whether the Authority operated its Section 8 programs in accordance
             with U. S. Department of Housing and Urban Development (HUD) requirements.
             We selected the Authority because our analysis indicated that it potentially
             overpaid housing assistance payment vouchers for 251 properties. Our review
             was in accordance with our strategic plan and regional goal priorities.

 What We Found

             The Authority generally followed HUD’s requirements. However, we informed
             the director of the Oklahoma City Housing Authority and HUD’s program center
             coordinator of minor deficiencies through a memorandum, dated December 8,
What We Recommend

           Since the Authority generally complied with HUD’s requirements, we do not
           recommend corrective action.

Auditee’s Response

           We provided the Authority with a draft report on November 27, 2006. In its
           December 4, 2006 response, the Authority agreed with the report and will take
           corrective action and implement new internal procedures to prevent future
           problems. We have included the Authority’s response as Appendix A.

                          TABLE OF CONTENTS

Background and Objectives                        4

Results of Audit                                 5

Scope and Methodology                            6

Internal Controls                                7

  A. Auditee Comments and OIG’s Evaluation       8

                     BACKGROUND AND OBJECTIVES

The Oklahoma City Housing Authority (Authority) is a municipal entity organized in 1965 for
the development, operation, and administration of low-rent housing programs. It has a five-
member board of commissioners, which is appointed by the mayor of Oklahoma City. One
public housing resident is on the Authority’s board. The primary purpose of the Authority is to
provide safe, decent, and sanitary housing for low-income families in Oklahoma City,

The Authority has 3,026 public housing units and 4,033 Section 8 vouchers. It also has project-
based units; mainstream vouchers; disaster vouchers; single-room occupancy; project-based
homeless, public housing, and Section 8 homeownership; and family self-sufficiency. We
limited our review to the Authority’s Section 8 housing assistance payment vouchers. The
Authority disbursed more than $19.6 million in Section 8 vouchers in fiscal year 2005, and as of
November 14, 2006, it had disbursed more than $18.6 million in Section 8 vouchers for fiscal
year 2006.

The Authority had the second highest number of potentially overhoused tenants (251) in the state
of Oklahoma. Our objective was to determine whether the Oklahoma City Housing Authority
overhoused Section 8 residents, computed housing assistance payments correctly, and complied
with housing quality standards during inspection of the properties.

                                RESULTS OF AUDIT

The Authority generally followed the U.S. Department of Housing and Urban Development’s
(HUD) requirements in administering its Section 8 programs. It generally performed timely
inspections for housing quality standards, performed reexaminations annually, and ensured that
the properties met HUD housing quality standards. However, of 20 Section 8 tenant files
reviewed, we found some minor errors regarding tenant family composition and housing
assistance payment calculation errors needing correction. The minor errors were not material to
the Authority’s overall operations. We addressed these issues in a separate management letter to
the Authority and HUD’s program center coordinator.

                        SCOPE AND METHODOLOGY

We conducted the survey at the Authority’s office in Oklahoma City, Oklahoma, during August
through October 2006. The survey covered the period from July 1, 2004, through June 30, 2006.
To meet the survey objective, we

   •   Obtained and reviewed background information and criteria related to the Authority’s
       administration of the Section 8 program.

   •   Analyzed data from the HUD Office of Public and Indian Housing Information Center to
       identify tenants the Authority may have overhoused based on the most recent tenant data
       available. During our survey scope, the Authority assisted 4,500 tenants, 251 of whom
       appeared to be overhoused based on family size as compared to the number of bedrooms
       authorized on the Section 8 voucher.

   •   Interviewed Authority staff regarding program operations and controls.

   •   Reviewed a random sample of 20 files of the 251 potentially overhoused tenants to
       determine whether the voucher size was correct and whether the documents in the file
       were consistent with HUD data. If the tenant was overhoused, we recalculated the
       housing assistance payment to identify amounts the Authority overpaid during the survey

   •   Accompanied inspectors on 21 site inspection visits of Section 8 properties to determine
       whether housing quality standards as prescribed by HUD were being met.

   •   Obtained a sufficient knowledge of the internal control environment to identify potential
       weaknesses in those internal controls related to the survey objectives.

We conducted our review in accordance with generally accepted government auditing standards.

                              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.

           •   Compliance with laws and regulations - Policies and procedures that management
               has implemented to reasonably ensure that resource use is consistent with laws
               and regulations.

           We assessed the relevant controls identified above.

 Significant Weakness

           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. We noted no significant
           weaknesses in the Authority’s current internal controls.

Appendix A


Ref to OIG Evaluation   Auditee Comments

Comment 1

                        OIG Evaluation of Auditee Comments

Comment 1   The Authority agreed with the finding and has taken action to implement new
            internal procedures to prevent any future potential overpayment of housing
            assistance payments.