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 22 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. 23
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)