oversight

The Slidell Housing Authority, Slidell, LA Did Not Always Follow HUD and Other Requirements When Administering Its Program

Published by the Department of Housing and Urban Development, Office of Inspector General on 2013-03-21.

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

OFFICE OF AUDIT
REGION 6
FT. WORTH, TX




                  Slidell Housing Authority
                          Slidell, LA

                     Section 8 Program




   [Type text]
2013-FW-1003               [Type text]            [Type
                                              MARCH     text]
                                                    21, 2013
                                                        Issue Date: March 21, 2013

                                                        Audit Report Number: 2013-FW-1003


TO:            Cheryl J. Williams, Director, Office of Public Housing, 6HPH

               //signed//
FROM:          Gerald Kirkland, Regional Inspector General for Audit, Ft. Worth Region, 6AGA


SUBJECT:       The Slidell Housing Authority, Slidell, LA, Did Not Always Properly Operate Its
               Section 8 Program


    Attached is the U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General (OIG), final results of our review of the Slidell Housing Authority’s Section 8
program.

    HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.

    The Inspector General Act, Title 5 United States Code, section 8L, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.

   If you have any questions or comments about this report, please do not hesitate to call me at
817-978-9309.
                                           March 21, 2013
                                           The Slidell Housing Authority, Slidell, LA Section 8
                                           Program




Highlights
Audit Report 2013-FW-1003


 What We Audited and Why                    What We Found

We audited the Slidell Housing             While we did not identify any ineligible participants in
Authority based upon our regional risk     our review of 14 sampled files, the Authority did not
analysis and as part of our annual audit   always operate its program in accordance with HUD’s
plan to review public housing agencies’    requirements. Specifically, it (1) did not always
operations. Our overall objective was      maintain supporting documentation for or accurately
to determine whether the Authority         calculate housing assistance payments, (2) had various
operated its Section 8 Housing Choice      documentation issues, (3) created a conflict of interest,
Voucher program in accordance with         and (4) did not process family members’ files
the U.S. Department of Housing and         appropriately. This condition occurred because the
Urban Development’s (HUD)                  Authority did not always follow the requirements
requirements and its administrative        outlined by HUD and its administrative plan and did
plan. The subobjectives were to            not ensure that (1) its staff was adequately trained and
determine whether the Authority            (2) its internal controls including its quality control
ensured that (1) program participants      procedures for the program were sufficient. As a
were eligible to participate in the        result, the Authority incurred payment errors totaling
program and (2) housing assistance         $105,007. The payment errors include $35,460 in
payments were accurate.                    ineligible and $69,462 in unsupported payments and
                                           $85 in housing assistance underpayments.
 What We Recommend

We recommend that the Director of
HUD’s New Orleans Office of Public
Housing require the Authority to (1)
repay $35,460 in ineligible costs to its
program, (2) support or repay $69,462,
(3) reimburse its program participants
$85 for underpayments, (4) correct the
deficiencies identified in the program
participant files, (5) develop and
implement proper internal controls
including quality control procedures,
and (6) provide training to Authority
employees.
                            TABLE OF CONTENTS

Background and Objective                                                3

Results of Audit
      Finding: The Authority Did Not Always Follow HUD and Other        4
      Requirements While Administering Its Program

Scope and Methodology                                                  10

Internal Controls                                                      11

Appendixes
A.    Schedule of Questioned Costs and Funds To Be Put to Better Use   13
B.    Auditee Comments and OIG’s Evaluation                            14
C.    Criteria                                                         21




                                            2
                      BACKGROUND AND OBJECTIVE

The Slidell Housing Authority is a public housing agency created on March 11, 1967, and
chartered under the laws of the State of Louisiana to provide and administer affordable housing
programs for the citizens of Slidell, LA. It is located at 1250 Martin Luther King Jr. Drive in
Slidell, LA, and manages 126 public housing units and 612 Section 8 program vouchers. The
mission of the Authority is to provide safe, sanitary, and decent housing for families within
Slidell and to provide equal access to safe, quality housing for families and elderly residents
throughout the community. The Authority is governed by a five-member board of
commissioners appointed by the mayor of Slidell. Its executive director is hired by the board
and is responsible for the Authority’s day-to-day operations. The Authority has the power to sue
and be sued and make rules and regulations for its own government consistent with the laws of
the State of Louisiana and City of Slidell.

The Authority administers the program to low-income residents in Slidell and Pearl River, LA.
For the program, the Authority provides funds in the form of rental subsidies to owners on behalf
of eligible families. The Authority relies on rents collected from residents and Federal subsidies
it receives from the U.S. Department of Housing and Urban Development (HUD) to administer
the program. HUD provided funding for the Authority’s program as shown in table 1.

                    Table 1: Funding as of October 18, 2012
                     Fiscal year Authorized funds Disbursed funds
                         2010              $1,571,604       $1,571,604
                         2011               2,509,474        2,509,474
                         2012               4,038,856        3,892,216
                    Total                  $8,119,934       $7,973,294

In operating its program, the Authority must comply with its consolidated annual contributions
contract, HUD requirements, and its administrative plan. Our overall objective was to determine
whether the Authority operated its program in accordance with HUD requirements and its
administrative plan. Our subobjectives were to determine whether the Authority (1) ensured that
its program participants were eligible to participate in the program and (2) made accurate
housing assistance payments on behalf of its program participants.




                                                3
                                          RESULTS OF AUDIT


Finding: The Authority Did Not Always Follow HUD and Other
Requirements While Administering Its Program

While we did not identify any ineligible participants in our review of 14 sampled files, the
Authority did not always operate its program in accordance with HUD’s requirements.
Specifically, the Authority did not always maintain required supporting documentation for or
accurately calculate housing assistance payments. In addition, various other documentation
deficiencies existed. Further, the Authority created a conflict of interest and did not properly
process family members’ files. These conditions occurred because the Authority did not always
follow the requirements of HUD and its administrative plan, did not ensure that its staff was
adequately trained, did not have written policies and procedures before July 2011, and did not
have adequate quality control procedures to ensure that it consistently followed HUD
requirements and its administrative plan. As a result, the Authority incurred payment errors
totaling $105,007. The payment errors included $35,460 1 in ineligible and $69,462 in
unsupported payments 2 and $85 in housing assistance underpayments.


    The Authority Destroyed One
    File and Made Housing
    Assistance Underpayments and
    Overpayments


                   We requested 14 sampled files to determine whether the assisted families were
                   eligible to receive program benefits. However, the Authority could not provide
                   one file because the Authority had destroyed it. Regulations at 24 CFR (Code of
                   Federal Regulations) 982.158 required the Authority to maintain documents to
                   support eligibility during the term of each assisted lease and for at least 3 years
                   thereafter. The Authority’s more stringent record retention policy required it to
                   retain these records for 5 years. When asked, the executive director stated that the
                   file was inadvertently shredded. By shredding the file, the Authority could not
                   support $14,510 in housing assistance payments made on behalf of this family
                   between September 2010 and March 31, 2012.

                   For the remaining 13 files, our review of the Authority’s most recent initial or
                   annual reexamination identified errors in two files that resulted in the
                   overpayment or underpayment of housing assistance, as follows:

1
     This amount includes $35,245 in ineligible payments to a landlord who was also a city councilmember and $215 in housing
     assistance overpayments.
2
     This amount includes $54,952 in housing assistance payments on behalf of families that were related to Authority staff or
     board members and $14,510 in housing assistance payments made on behalf of a family that the Authority could not support
     because it destroyed the family’s file.


                                                              4
                        x    For one family, the Authority did not use the correct payment standard
                             when the family reported a change in family size in October 2011.
                             Regulations at 24 CFR 982.505 required the Authority to adjust the
                             payment standard once the family had a change in size or during the next
                             reexamination. However, when the Authority lowered its payment
                             standard in April 2011, it did not apply the lower payment standard during
                             the family’s October 2011 reexamination, resulting in $215 in ineligible
                             housing assistance overpayments.

                        x    For another family, the Authority applied an incorrect utility allowance.
                             Regulations at 24 CFR 982.517(a) required the Authority to maintain a
                             utility allowance schedule for all utilities paid on behalf of its residents.
                             While the Authority had a utility allowance schedule, it did not follow it
                             and made $15 in housing assistance underpayments.
              .
    Other Documentation Issues
    Existed


                   Although they did not impact the housing assistance payments, 13 files contained
                   various other documentation deficiencies. These types of issues could impact
                   eligibility and, therefore, showed problems with the Authority’s initial and
                   reexamination practices. As shown in table 2, the deficiencies included limited
                   background checks, no sex offender registry or landlord eligibility checks, failure
                   to ensure that the housing assistance payments contract ran concurrently with the
                   lease term, and failure to perform a rent reasonableness assessment before
                   executing the housing assistance payments contract. 3 The Authority did not use
                   HUD’s limited denial of participation and excluded parties lists to prescreen its
                   landlords for eligibility before October 2012. However, once we notified the
                   Authority of this issue, it began screening its landlords, and as of December 2012,
                   all of its landlords were eligible to participate.

                   Table 2
                                                   Deficiency                                      Number of files with
                                                                                                      deficiencies
                     Lack of sex offender registration check                                               13
                     Landlords not prescreened before execution of housing assistance                      13
                     payments contract
                     Inadequate or unavailable criminal background checks 4                                   7
                     Housing assistance payments contract not concurrent with the                             1
                     lease
                     Rent reasonableness determination made after execution of the                            1
                     housing assistance payments contract


3
     See appendix C for the applicable criteria.
4
     Although located in Saint Tammany Parish, the Authority limited the criminal background checks to the City of Slidell’s
     jurisdiction.


                                                               5
    The Authority Created a
    Conflict of Interest


                   The Authority identified a potential conflict of interest with a program landlord
                   who was a city councilmember. We determined that the councilmember was
                   elected to the city council in 2006 to represent and make decisions for the
                   Authority’s district. Regulations at 24 CFR 982.161 and the Authority’s
                   administrative plan prohibited it from entering into a contract with persons 5 who
                   exercised functions or responsibilities with respect to its programs. However, the
                   Authority executed an inappropriate housing assistance payments contract with
                   the councilmember in October 2008. From November 2008 through October
                   2012, the Authority made $35,245 in ineligible payments to the councilmember.
                   The Authority did not make any payments after October 2012 because the
                   councilmember terminated the family’s lease due to nonpayment of rent.

    Family Members Received
    Questionable Program Benefits


                   The Authority paid questionable program benefits on behalf of four families that
                   had members who were related to Authority staff members or a board member.
                   Three of the four families remained on the program as of January 2013, as shown
                   in table 3.

                   Table 3
                            Family relationship                 Entry into the program           Status of participation
                     Public housing manager’s daughter         November 24, 2003                      Terminated 6
                     Program manager’s daughter                December 29, 2006                         Current
                     Program manager’s sister                  November 1, 2009                          Current
                     Board member’s niece                      July 1, 2009                             Current 7

                   As shown in table 4, between April 2010 and March 2012, the Authority made a
                   total of $54,952 in questionable housing assistance payments on behalf of the
                   related families.




5
     This includes public officials and members of governing bodies.
6
     The family was terminated in March 2012 due to a failed criminal background check.
7
     The family had a portable voucher from another housing agency that it used to transfer to the Authority’s program in
     November 2011.


                                                               6
                                 Table 4
                                            Family relationship            Amount
                                  Public housing manager’s daughter           $18,188
                                  Program manager’s daughter                   16,840
                                  Program manager’s sister                     15,889
                                  Board member’s niece                          4,035
                                  Total                                       $54,952

                Review of the four families’ most recent annual reexaminations showed that the
                Authority made minor errors in calculating the assistance for two of the families,
                which resulted in the underpayment of housing assistance.

                     x   The Authority did not use the correct household income amount when it
                         calculated the assistance for the board member’s niece, resulting in $40 in
                         housing assistance underpayments.

                     x   The Authority did not use the correct utility allowance when it calculated
                         the assistance for the program manager’s daughter, resulting in $30 in
                         housing assistance underpayments. The Authority also created a conflict
                         by allowing the program manager to approve her daughter’s housing
                         assistance payments contract amendments.

                In addition, various other documentation issues existed in the files for each of
                these families, as shown in table 5.

Table 5
                                              Program        Program     Public housing    Board
                                              manager’s      manager’s     manager’s      member’s
              Issue identified                  sister       daughter      daughter        niece
Inadequate criminal background checks             X             X                            X
Lack of sex offender registration check           X             X              X             X
Landlords not prescreened before                  X             X              X             X
execution of housing assistance payments
contract
Housing assistance payments contract not                                       X             X
concurrent with the lease
Missing documentation                                                                        X
Rent reasonableness determination made                                                       X
after execution of the housing assistance
payments contract
Housing quality standards inspection after                                     X
lease date




                                                      7
             Due to the potential conflicts and as a best practice, the Authority should have
             obtained an independent full review of all of the family members’ files to (1)
             ensure that the examination and qualification process was fair; (2) clear any
             errors, omissions, and appearances of conflicts or favoritism; and (3) provide
             reasonable assurance that the $54,952 and any additional funds paid on behalf of
             these family members was fully supported.

The Authority Did Not Have
the Proper Controls


             The Authority did not have the proper controls, as it did not properly train its
             staff, did not always follow the requirements of HUD’s and its administrative plan
             requirements and did not have adequate internal controls. Authority staff
             members stated that they could not remember the last time they received formal
             training. In addition, the executive director did not seek formal guidance from
             HUD or terminate the councilmember’s contract when she became aware of the
             conflict of interest. Further, the Authority did not have written policies and
             procedures before July 2011.

             Lastly, the Authority’s administrative plan lacked adequate quality control
             procedures. For instance, the plan did not establish specific supervisory practices
             for reviewing program participants’ files to detect errors. Also, although the
             program manager randomly reviewed files in an attempt to ensure compliance, the
             administrative plan did not outline procedures for those reviews, such as the
             frequency of the reviews or the number of files or elements that should be
             reviewed. Having these procedures should improve the Authority’s program and
             its compliance with HUD requirements.

Conclusion

             While we did not identify any ineligible participants in our review of 14 sampled
             files, the Authority did not always operate its program in accordance with HUD’s
             requirements. Specifically, the Authority had various errors and issues within its
             program, including the lack of required supporting documentation, documentation
             deficiencies, and conflicts of interest. These conditions occurred because the
             Authority disregarded requirements of HUD and its administrative plan, did not
             ensure that its staff was adequately trained, did not have written policies and
             procedures before July 2011, and did not have adequate quality control
             procedures. As a result, the Authority incurred payment errors totaling $105,007.
             The payment errors include $35,460 in ineligible and $69,462 in unsupported
             payments and $85 in housing assistance underpayments.




                                              8
Recommendations

          We recommend that the Director of HUD’s New Orleans Office of Public
          Housing require the Authority to

           1A. Provide documentation to support housing assistance payments totaling
               $14,510 or reimburse its Section 8 Housing Choice Voucher program
               from non-Federal funds for the payments it cannot support.

           1B. Reimburse its Section 8 Housing Choice Voucher program from non-
               Federal funds $215 for the overpayment of housing assistance.

           1C. Reimburse the applicable family from Section 8 Housing Choice Voucher
               program funds $15 for the underpayment of housing assistance.

           1D. Reimburse its Section 8 Housing Choice Voucher program from non-
               Federal funds $35,245 for ineligible costs paid to a city councilmember.

           1E. Obtain a HUD-approved independent full review of the four families that
               had members who were related to Authority staff or a board member to
               support housing assistance payments totaling $54,952 or reimburse its
               Section 8 Housing Choice Voucher program from non-Federal funds for
               any unsupported payments. The review should include compliance with
               all requirements since the families’ initial entry into the program. If the
               payments are supported, the Authority should reimburse the applicable
               families from its Section 8 Housing Choice Voucher program funds $70
               for the underpayment of housing assistance.

           1F. Correct the deficiencies in the participants’ files and make corrections to
               the housing assistance payments as appropriate.

           1G. Develop and implement quality control procedures to ensure that housing
               assistance payments are correctly calculated and supported with the
               required documentation.

           1H. Provide appropriate training to ensure that responsible Authority personnel
               understand HUD program requirements.

            1I. Improve internal controls related to landlord eligibility and conflicts of
                interest.




                                           9
                               SCOPE AND METHODOLOGY

We conducted our audit at the Authority’s office and the HUD Office of Inspector General’s
(OIG) office in New Orleans, LA, between September 2012 and January 2013.

To accomplish our objective, we

    x   Reviewed relevant laws, regulations, and program guidance.
    x   Interviewed HUD and Authority staff.
    x   Reviewed the Authority’s audited financial statements.
    x   Reviewed the Authority’s board meeting minutes.
    x   Reviewed the Authority’s program administrative plan and policies.
    x   Reviewed the Authority’s program participant files.

Our sampling frame for the universe included 443 program families as of March 31, 2012, which
included regular housing assistance payment, port in, and port out participants. Of the 443
families, we excluded 18 port out families since those families were outside the Authority’s
jurisdiction, resulting in a universe of 425 families with housing assistance payment
disbursements totaling more than $7.9 million. We used a simple random statistical sample with
a random number seed of seven to statistically select files for 80 families with disbursements
totaling more than $1.1 million. For the initial review, we selected files for 14 families, with
disbursements totaling $211,914, to determine eligibility. Since we did not identify any
significant issues that affected eligibility in our review of the 14 files, we decided not to review
the remaining 66 files. Through the file reviews, we determined that the disbursement data were
generally reliable.

We expanded our eligibility review to include additional files as a result of potential conflicts of
interest 8 identified by Authority staff. Since we had certainty that issues existed and the universe
was relatively small, we completed a 100 percent review of (1) four files associated with the
potential conflicts involving employees and (2) a housing assistance payment analysis associated
with one landlord. The disbursements associated with these reviews totaled $72,157 within our
audit scope. Through file reviews, we determined that the disbursement data were generally
reliable.

Our audit scope covered April 1, 2010, through March 31, 2012. We expanded the scope as
necessary to accomplish our audit objective. We conducted the audit in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objective. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objective.


8
    These potential conflicts involved a councilmember and the Authority’s (1) program manager’s sister and daughter, (2)
    public housing manager’s daughter, and (3) board member’s niece.


                                                             10
                              INTERNAL CONTROLS

Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

   x   Effectiveness and efficiency of operations,
   x   Reliability of financial reporting, and
   x   Compliance with applicable laws and regulations.

Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.


 Relevant Internal Controls

               We determined that the following internal controls were relevant to our audit
               objective:

                  x   Effectiveness and efficiency of operations - Policies and procedures in
                      place to reasonably ensure that program activities were conducted in
                      accordance with applicable laws and regulations.

                  x   Compliance with applicable laws and regulations - Policies and
                      procedures in place to reasonably ensure that housing assistance payment
                      disbursements and participant file documentation complied with
                      applicable laws and regulations.

                  x   Relevance and reliability of information - Policies and procedures in place
                      to reasonably ensure that participant file errors and housing assistance
                      payment errors were reduced and valid and reliable program data were
                      maintained.

               We assessed the relevant controls identified above.

               A deficiency in internal control exists when the design or operation of a control does
               not allow management or employees, in the normal course of performing their
               assigned functions, the reasonable opportunity to prevent, detect, or correct (1)
               impairments to effectiveness or efficiency of operations, (2) misstatements in
               financial or performance information, or (3) violations of laws and regulations on a
               timely basis.



                                                 11
We evaluated internal controls related to the audit objectives in accordance with
generally accepted government auditing standards. Our evaluation of internal
controls was not designed to provide assurance regarding the effectiveness of the
internal control structure as a whole. Accordingly, we do not express an opinion
on the effectiveness of the Authority’s internal control.




                                12
                                    APPENDIXES

Appendix A

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

         Recommendation           Ineligible 1/    Unsupported 2/   Funds to be put
             number                                                 to better use 3/
                 1A                                      $14,510
                 1B                    $215
                 1C                                                              $15
                 1D                  35,245
                 1E                                       54,952                  70

        Totals                      $35,460              $69,462                 $85

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 the audit. Unsupported
     costs require 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. These amounts include
     reductions in outlays, deobligation of funds, withdrawal of interest, costs not incurred by
     implementing recommended improvements, avoidance of unnecessary expenditures
     noted in preaward reviews, and any other savings that are specifically identified. In this
     instance, it represents the amount of underpayments that should be made to the
     appropriate family.




                                              13
Appendix B

     AUDITEE COMMENTS AND OIG’S EVALUATION




                      14
Comment 1




            15
Comment 2

Comment 2




Comment 2



Comment 2




            16
Comment 2




Comment 2




            17
Comment 3




Comment 2




            18
Comment 4




Comment 2

Comment 2




Comment 2




            19
                         OIG Evaluation of Auditee Comments

Comment 1   The Authority acknowledged that one out of over 400 files was inadvertently
            shredded as part of their purging process. Our review only covered 14 sampled
            files; thus, we cannot attest to the Authority's assertion that only one file was
            shredded. The Authority also believed that their recreation of the HUD form
            50058 could be sufficient to support the housing assistance payments to the
            landlord on behalf of this family. However, regulations at 24 CFR 982.158
            specifically required the Authority to maintain documentation to support the form
            50058, including a copy of the executed lease, the housing assistance payment
            contract, and the application from the family. The Authority should provide the
            final supporting documentation to support the payments made on behalf of this
            family.

            Lastly, the Authority asserted that it has scanned over 40 percent of its active files
            and plans to revise it administrative plan. We appreciate the Authority's efforts in
            improving its processes and resolving the errors identified.

Comment 2   The Authority generally agreed with the conclusions and explained that it has
            taken steps to resolve the errors. The Authority also asserted that it intended to
            use the results in the report to develop operating procedures and train its staff.
            We appreciate the Authority's efforts in resolving the errors identified and
            improving its processes. The Authority should work with HUD to resolve
            recommendations 1B, 1C, 1E and 1F.

Comment 3   The Authority agreed that the city councilmember's participation as a landlord in
            the program constitutes a conflict of interest. However, the Authority asserted
            that it wants to obtain an opinion from the HUD field office on the matter. As
            stated in the report, regulations at 24 CFR 982.161 and the Authority's
            administrative plan prohibited it from entering into a contract with persons who
            exercised functions or responsibilities with respect to the programs. Therefore,
            we stand by our original conclusions and recommendation 1D.

Comment 4   We agree that the sister of the housing choice voucher program manager was
            arrested, rather than convicted; and that the felony charges were dropped or not
            pursued by the district attorney. Therefore, we removed that verbiage from the
            report.




                                              20
Appendix C

                                         CRITERIA

The following sections of the Code of Federal Regulations apply to program participant
eligibility and housing assistance payment calculations (finding 1):

   x   24 CFR 5.855 explains that a public housing authority may prohibit admission of a
       household to federally assisted housing under its standards if it determines that any
       household member is currently engaging in or has engaged in during a reasonable time
       before the admission decision drug-related criminal activity or violent criminal activity.
   x   24 CFR 5.905(a)(1) states that a public housing authority that administers a Section 8 or
       public housing program under an annual contributions contract with HUD must carry out
       background checks necessary to determine whether a member of a household applying
       for admission to any federally assisted housing program is subject to a lifetime sex
       offender registration requirement under a State sex offender registration program. This
       check must be carried out with respect to the State in which the housing is located and
       with respect to States where members of the applicant household are known to have
       resided.
   x   24 CFR 965.502(e) explains that the public housing authority’s determination of utility
       allowances is final and valid unless found to be arbitrary, capricious, or otherwise not in
       accordance with the law.
   x   24 CFR 965.503 explains that separate allowances must be established for each utility
       and for each category of dwelling units determined by the public housing authority to be
       reasonably comparable as to factors affecting utility use.
   x   24 CFR 982.158 states that the public housing authority must keep during the term of
       each assisted lease and for at least 3 years thereafter (1) a copy of the executed lease, (2)
       the housing assistance payments contract, and (3) the application from the family.
       Further, the Authority must keep the following records for at least 3 years: records that
       provide income, racial, ethnic, gender, and disability status data on program applicants
       and participants.
   x   24 CFR 982.161 states that neither the housing authority nor any of its contractors or
       subcontractors may enter into any contract or arrangement in connection with the tenant-
       based programs in which any of the following classes of persons has any interest, direct
       or indirect, during tenure or for 1 year thereafter: (1) any present or former member or
       officer of the housing authority (except a participant commissioner); (2) any employee of
       the housing authority or any contractor, subcontractor, or agent of the housing authority
       who formulates policy or who influences decisions with respect to the programs; (3) any
       public official, member of a governing body, or State or local legislator who exercises
       functions or responsibilities with respect to the programs; or (4) any member of the
       Congress of the United States.
   x   24 CFR 982.305(a)(b) states that the Authority must have inspected the unit and
       determined that the unit satisfies housing quality standards before the beginning of the
       lease term. Additionally, the housing authority may not give approval for the family to


                                                21
       lease a dwelling unit or execute a housing assistance payments contract until the housing
       authority has determined that the unit has been inspected by the housing authority and
       meets housing quality standards.
   x   24 CFR 982.306(a) states that the public housing authority must not approve an assisted
       tenancy if the public housing authority has been informed (by HUD or otherwise) that the
       owner is debarred, suspended, or subject to a limited denial of participation under 24
       CFR Part 24.
   x   24 CFR 982.309(b)(1) explains that the term of the housing assistance payments contract
       begins on the first day of the lease term and ends on the last day of the lease term.
   x   24 CFR 982.505 states that that if the amount on the payment standard schedule is
       decreased during the term of the housing assistance payments contract, the lower
       payment standard amount generally must be used to calculate the monthly housing
       assistance payment for the family beginning on the effective date of the family’s second
       regular reexamination following the effective date of the decrease in the payment
       standard amount. Irrespective of any increase or decrease in the payment standard
       amount, if the family unit size increases or decreases during the housing assistance
       payments contract term, the new family unit size must be used to determine the payment
       standard amount for the family beginning at the family’s first regular reexamination
       following the change in family unit size.
   x   24 CFR 982.507(a)(1) states that the public housing authority may not approve a lease
       until it determines that the initial rent to owner is a reasonable rent.
   x   24 CFR 982.517(a) requires the public housing authority to maintain a utility allowance
       schedule for all tenant-paid utilities, the cost of tenant-supplied refrigerators and ranges,
       and other tenant-paid housing services. The Authority must give HUD a copy of the
       utility allowance schedule, and the Authority must provide any information or procedures
       used in preparation of the schedule when requested.

The following sections of HUD Guidebook 7420.10G apply to tenant eligibility and housing
assistance payment calculations (finding 1):

   x   Chapter 5.7 explains that a public housing authority may deny assistance to a family if
       any member of the family has committed drug-related criminal activity or violent
       criminal activity as long as the illegal use or possession for personal use occurred within
       1 year before the date the public housing authority provides notice to the family to deny
       assistance. In determining whether to deny assistance based on drug-related criminal
       activity or violent criminal activity, the public housing authority may deny assistance if
       the preponderance of evidence indicates that a family member has engaged in such
       activity, regardless of whether the family member has been arrested or convicted.
   x   Chapter 7.4 states that if the public housing authority lowers its payment standards, the
       payment standard in effect on the effective date of the housing assistance payments
       contract will remain in effect until the family moves to another unit or has a change in its
       family size or composition or until the second annual reexamination after the public
       housing authority decreases its payment standard.
   x   Chapter 9.2 explains that a public housing authority must determine rent reasonableness
       before entering into a housing assistance payments contract. A public housing authority



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    must not execute a housing assistance payments contract until it has documented that the
    charged rent is reasonable.
x   Chapter 11.11 states that during the term of the assisted tenancy and for at least 3 years
    thereafter, the public housing authority must keep on file a copy of the housing assistance
    payments contract, including the tenancy addendum, and the lease. The family receives
    an original of the lease and copy of the tenancy addendum. The owner receives an
    original of the lease and housing assistance payments contract, including the tenancy
    addendum.
x   Chapter 11.2 states that before executing a housing assistance payments contract and
    processing housing assistance payments, the public housing authority must determine that
    the owner of the assisted unit is eligible to participate in the Housing Choice Voucher
    program. The term “owner” may include a principal or other interested party.
x   Chapter 11.3 states that the term of the housing assistance payments contract must run
    concurrently with the term of the lease, including any extensions of the lease term.
    Occasionally, families move into units before housing assistance payments contract
    execution, and some owners require these families to sign a lease before moving into the
    unit. In these situations the public housing authority must request that the owner and
    authority execute a new lease once the housing assistance payments contract is signed.
x   Chapter 18.2 states that the public housing authority is responsible for establishing and
    maintaining a utility allowance schedule that provides reasonable allowances for
    tenant-paid utilities. The utility allowance schedule must include the utilities and
    services necessary to provide housing that complies with housing quality standards.




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