OFFICE OF AUDIT
REGION 6
FORT WORTH, TX
St. Charles Parish Housing Authority
Boutte, LA
Section 8 Housing Choice Voucher Program
2014-FW-1003 July 2, 2014
Issue Date: July 2, 2014
Audit Report Number: 2014-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 St. Charles Parish Housing Authority, Boutte, LA, Mismanaged Its Section 8
Housing Choice Voucher Program
Attached is the U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General’s (OIG) final results of our review of the St. Charles Parish Housing
Authority’s Section 8 Housing Choice Voucher 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 8M, 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.
July 2, 2014
The St. Charles Parish Housing Authority, Boutte, LA,
Mismanaged Its Section 8 Housing Choice Voucher
Program
Highlights
Audit Report 2014-FW-1003
What We Audited and Why What We Found
We audited the St. Charles Parish The Authority did not operate its program in
Housing Authority based upon our accordance with HUD’s requirements. Specifically, it
regional risk analysis and as part of our (1) did not ensure that housing assistance and utility
annual audit plan to review public reimbursement payments were eligible and supported,
housing agencies’ operations. Our (2) did not maintain adequate documentation to
objective was to determine whether the support subsidy payments, and (3) did not review its
Authority operated its Section 8 utility allowance standards annually. In addition, it did
Housing Choice Voucher program in not enforce HUD’s housing quality standards. These
accordance with the U.S. Department of conditions occurred because the Authority (1) lacked
Housing and Urban Development’s adequate written procedures and controls, (2) failed to
(HUD’s) requirements and its exercise proper supervision and oversight, and (3) did
administrative plan. not ensure that it adequately trained its staff on
program requirements and systems. As a result, the
What We Recommend Authority made $16,350 in ineligible overpayments
and $1,325 in underpayments, paid $18,391 for
properties that did not meet HUD’s housing quality
We recommend that the Director of standards and could not support $570,834 of housing
HUD’s New Orleans Office of Public assistance and utility reimbursement payments. These
Housing require the Authority to (1) errors also caused an underutilization of the
repay $34,741 from non-Federal funds, Authority’s vouchers, preventing it from using
(2) support or repay $570,834 from program funds to better serve program participants and
non-Federal funds, and (3) implement provide assistance to households on its waiting list.
controls and procedures and train staff. Additionally, the Authority may have placed an undue
Additionally, the Director should (1) burden on participants for increased utility costs and
adjust the Authority’s Section 8 could not provide reasonable assurance that it used
Management Assessment Program HUD funds effectively and efficiently or to fully
scores and (2) consider new benefit program participants. Lastly, the Authority
management strategies to improve the subjected program participants to substandard living
Authority’s operations to ensure that conditions for those units not in compliance with
program funds are better used to assist HUD’s housing quality standards.
the Authority’s program participants
and households on the waiting list.
TABLE OF CONTENTS
Background and Objective 3
Results of Audit
Finding 1: The Authority Did Not Ensure Payments Were Eligible and Supported 4
Finding 2: The Authority Did Not Enforce HUD’s Housing Quality Standards 10
Scope and Methodology 16
Internal Controls 18
Appendixes
A. Schedule of Questioned Costs 20
B. Auditee Comments and OIG’s Evaluation 21
C. Summary of Payment Deficiencies 27
D. Summary of File Documentation Deficiencies 30
2
BACKGROUND AND OBJECTIVE
The St. Charles Parish Housing Authority is a public agency, chartered under the laws of the
State of Louisiana to provide safe and sanitary dwelling accommodations and administer
affordable housing programs to the citizens of St. Charles Parish, LA. The Authority manages
129 public housing units and is authorized 400 Section 8 vouchers. The Authority’s mission is
to provide decent, safe, sanitary, and drug-free housing for low- to moderate-income families
throughout the Parish. The Authority is governed by a five-member board of commissioners
appointed by the Parish council members. The Authority’s executive director manages the
Authority’s day-to-day operations. The Authority is located at 200 Boutte Estates Drive, Boutte,
LA.
Congress authorized the Section 8 Housing Choice Voucher program in 1974 to provide rental
subsidies for eligible families, including single persons, residing in newly constructed,
rehabilitated, and existing rental and cooperative apartment projects. The program assists very
low-income families, the elderly, and the disabled in affording decent, safe, and sanitary housing
in the private market.
The U.S. Department of Housing and Urban Development (HUD) provides program funding to
the Authority in the form of rental subsidies to owners on behalf of eligible families. The
Authority relies on the Federal subsidies and administrative fees it receives from HUD as a
primary source of funding to pay the landlords, provide utility reimbursements to participants,
and administer the program. HUD provided funding for the Authority’s program as shown in
table 1.
Table 1:
Fiscal year Authorized funds Disbursed funds Administrative fees
2011 $1,895,464 $1,895,464 $158,131
2012 1,601,460 1,601,460 137,450
2013 477,408 421,590 131,611
Total $3,974,332 $3,918,514 $427,192
In operating its program, the Authority must comply with its consolidated annual contributions
contract, HUD regulations, and its administrative plan.
Our objective was to determine whether the Authority operated its program in accordance with
HUD requirements and its administrative plan.
3
RESULTS OF AUDIT
Finding 1: The Authority Did Not Ensure Payments Were Eligible and
Supported
The Authority did not properly administer program assistance. Specifically, it (1) did not ensure
that housing assistance and utility reimbursement payments were eligible and supported, (2) did
not maintain adequate documentation to support subsidy payments, and (3) did not review its
utility allowance standards annually. These conditions occurred because the Authority did not
have adequate internal controls. Specifically, it did not (1) have adequate written procedures for
calculating housing assistance and utility reimbursement payments and maintaining supporting
documentation, (2) perform sufficient quality control reviews of participant files, (3) follow its
written standards when determining subsidy and utility amounts, (4) adequately train its staff on
program requirements and associated computer systems, and (5) provide adequate oversight to
ensure that it complied with program requirements. As a result, the Authority overpaid $16,350,
underpaid $1,325, and paid $570,834 in unsupported payments for housing assistance and utility
reimbursements. In addition, these errors caused an underutilization of the Authority’s vouchers,
preventing it from using program funds to better serve program participants and provide
assistance to households on its waiting list seeking program assistance. Further, the Authority
may have placed an undue burden on participants for increased utility costs and could not
provide reasonable assurance that it used HUD funds effectively and efficiently or to fully
benefit program participants.
The Authority Made Ineligible
and Unsupported Payments
Review of the reexaminations for 85 sampled monthly housing assistance
payments found that all 85 payments contained errors. The Authority is required
to verify the accuracy of the income information received from program
households and change the amount of the total household payment, household
rent, or program housing assistance payment or terminate the housing assistance,
as appropriate, based on this information. 1
However, for 10 of the sampled payments, the Authority either did not use the
correct payment and utility allowance amounts or miscalculated income, resulting
in $16,350 in ineligible overpayments and $1,325 of underpayments. In one
instance, contrary to HUD’s requirements, 2 the Authority excluded overtime pay
1
24 CFR (Code of Federal Regulations) 5.240(c)
2
24 CFR 5.609(b)(1)
4
and used only the average hours worked times the base rate of pay, causing an
overpayment of $342 each month during the reexamination period.
For the remaining 75 sampled payments, the Authority did not maintain 1 or more
documents 3 needed to support $426,310 in subsidy payments. Specifically, the
Authority did not
• Verify income or obtain income or expense documentation for 34 payments.
• Conduct annual or interim reexaminations for nine participants.
• Keep the files after participants stopped receiving program benefits for four
participants.
• Complete an annual housing quality standards inspection of 56 units. For
one, the Authority received a letter from a participant on July 11, 2013,
complaining of substandard and dangerous living conditions and the lack of
a housing quality standards inspection for 3 years. 4 For example, the
participant’s letter stated that the air conditioner had been broken for 100
days, the home was infested with insects, the door frames were rotted, the
house piers had sunk (causing the house to lean to one side), and the
sheetrock was falling from the ceiling. The Authority conducted a special
inspection on July 12, 2013; however, on July 30, 2013, it received another
letter from the participant stating that he had vacated the premises due to the
living conditions. The Authority did not take actions against the landlord to
improve the participant’s living conditions as required by HUD. 5
See appendix C for a summary of all of the deficiencies for each participant file
reviewed.
The Authority Did Not
Maintain Adequate
Documentation
We reviewed an additional 14 participant files to determine whether the Authority
maintained complete documentation. For these 14 files, the Authority did not
maintain 1 or more documents 6 needed to support $144,524 in subsidy payments.
3
24 CFR 982.158
4
For this unit, the Authority passed the unit during the initial inspection in 2010 and did not conduct an
inspection for 2011 or 2012.
5
HUD Guidebook, section 10.7
6
24 CFR 982.158
5
Specifically, the Authority
• Paid for units that failed its housing quality standards inspection 7 and did
not require the landlord to repair the deficiencies identified, 8
• Did not perform annual reexaminations or obtain appropriate income
documentation 9,
• Did not use third-party sources to verify household income.
• Did not document annual housing quality standards inspection 10 for 1 or
more years,
• Did not maintain documentation showing that it conducted an annual
reexamination, 11
• Did not document a rent reasonableness assessment, or
• Did not document housing assistance payments contract and lease.
The Authority also did not ensure that it always
• Conducted rent reasonableness assessments before executing the lease or
housing assistance payments contract. 12 For one participant, the Authority
conducted the assessment almost 3 months after it executed the agreements.
• Issued a housing voucher to participants to ensure compliance with occupancy
standards. 13
• Ensured that the voucher size corresponded to its occupancy standards. 14 In
one instance, the Authority issued a three-bedroom voucher for a one-person
household.
• Ensured that it executed the housing assistance payments contract within 60
calendar days from the beginning of the lease term. 15
• Performed or obtained criminal background checks on household members. 16
See appendix D for a summary of the deficiencies identified for each participant
file reviewed.
7
24 CFR 982.305(a)(2)
8
24 CFR 982.404(a)
9
24 CFR 982.516
10
24 CFR 982.405(a)
11
24 CFR 982.516
12
24 CFR 982.305(a)(4)
13
Authority’s Section 8 administrative plan
14
Authority’s Section 8 administrative plan
15
24 CFR 982.305(c)
16
24 CFR 982.553
6
The Authority Did Not Review
Utility Allowance Standards
Annually
The Authority is required to review its schedule of utility allowances annually to
ensure that rates remained in line with the normal patterns of consumption and the
current utility rates. Any change of 10 percent or more required a revision to the
Authority’s policy. HUD also required the Authority to maintain documentation
supporting that it performed this annual review and any revisions made. 17
However, the Authority had not reviewed its utility allowance standard schedule
since 2010. Considering the rising costs of living over the past 4 years, the
Authority may have placed an undue burden on participants by making them pay
more than required for utility costs.
The Authority Lacked
Adequate Procedures and
Controls
The Authority lacked adequate written procedures and controls to ensure that it
calculated payments correctly and maintained adequate documentation. It did not
follow its utility and payment standard policies. In addition, its administrative
plan, which had not been updated since 2004, did not include procedures for (1)
closing or reopening the waiting list and (2) establishing and revising its payment
standards. 18 It also did not establish controls for processing checks, determining
rent reasonableness, calculating income, and determining the required frequency
for performing criminal background checks on participants. The Authority’s only
written program policy was its administrative plan, which did not include
necessary procedures and controls.
Further, the executive director failed to exercise proper oversight. Specifically,
she failed to perform adequate supervisory quality control reviews of files. 19 The
executive director used a one sheet checklist to check only for specific documents
in randomly reviewed files, causing the executive director to miss the errors
identified in this finding. Including an area to document verifications of income
and other calculations; and to check for compliance with program requirements,
would improve the adequateness and effectiveness of the reviews. In addition, the
executive director had not established a written policy for the reviews that
included procedures such as how to detect errors, the required frequency of the
reviews, or the number of files or elements that should be reviewed.
17
24 CFR 982.517
18
24 CFR 982.54
19
HUD Guidebook, section 22.3
7
Lastly, the Authority did not ensure that its staff received adequate training on
program requirements or systems. When asked why the utility policy had not
been updated, the executive director did not know that the Authority is required to
perform an annual documented review and update as applicable. The executive
director also did not have access to the Authority’s Housing Choice Voucher
program system, PHA-web, 20 and did not know how to use the system. To add to
this problem, the program manager had not attended housing quality standards
training since 2007.
Conclusion
As a result of its procedural and control weaknesses, the Authority made $16,350
in ineligible overpayments and $1,325 in underpayments for 10 participants, and
$570,834 in unsupported housing assistance and utility reimbursement payments
for 89 participants. All of the errors made by the Authority contradict its perfect
score of 100 for its 2012 Section Eight Management Assessment Program
(SEMAP) score.
In addition, overpaying for and not adequately supporting housing and utility
reimbursement payments prevented it from freeing up additional funds to use for
program assistance and fully utilizing its authorized vouchers. Specifically, the
Authority had 400 authorized vouchers to subsidize rents for eligible households.
As of March 27, 2013, the Authority had 1,093 households on its waiting list for
program assistance. However, between October 2012 and September 2013, it
used an average of only 198 vouchers per month 21, thereby causing a significant
underutilization of its vouchers and preventing it from better using program funds
to assist program participants and households on the waiting list. In addition, the
Authority could not provide HUD with reasonable assurance that it used program
funds effectively and efficiently or to fully benefit program participants.
20
PHA-web is Web-based software to assist housing authorities in managing their programs.
21
This amount is averaged over 12 months between October 2012 and September 2013.
8
Recommendations
We recommend that the Director of HUD’s New Orleans Office of Public
Housing require the Authority to
1A. Reimburse its program $16,350 from non-Federal funds for the
overpayment of housing assistance and utility reimbursement
payments.
1B. Reimburse the appropriate households $1,325 from program funds for
the underpayment of housing assistance and utility reimbursement.
1C. Support or reimburse its program $570,834 from non-Federal funds for
payments that lacked supporting documentation.
1D. Implement a written policy that ensures compliance with requirements
to include, but not limited to, procedures and controls to ensure (1)
subsidy payments are eligible and supported, (2) that appropriate
documentation is obtained and maintained, (3) that supervisory quality
control reviews are adequately conducted and documented, and (4)
that program staff is adequately trained on the program requirements
and systems.
1E. Review its schedule of utility allowances and develop and implement
policies to conduct this review annually.
The Director should also
1F. Review the Authority’s SEMAP 22 scores and adjust them as necessary
based upon the deficiencies identified in this report.
1G. Evaluate new management strategies for improving the Authority’s
Housing Choice Voucher program, including options such as possibly
consolidating the Authority’s program with that of another housing
authority through an executed interagency agreement or hiring a
contract specialist to execute the program.
22
SEMAP measures the performance of the public housing agencies that administer the Housing Choice Voucher
program in 14 key areas. SEMAP helps HUD target monitoring and assistance to agencies’ programs that need
the most improvement.
9
Finding 2: The Authority Did Not Enforce HUD’s Housing Quality
Standards
The Authority did not conduct adequate inspections to enforce HUD’s housing quality standards.
Of 14 units inspected, 13 did not meet HUD’s housing quality standards, and 12 materially failed
to meet HUD’s standards. The Authority’s inspector did not identify 191 housing quality
standards violations that existed in the 12 units when they conducted their inspections. The
violations occurred because the Authority did not (1) have adequate procedures and controls to
ensure that it met housing quality standards requirements, (2) conduct independent quality
control reviews of housing quality inspections after the program manager’s assessment, and (3)
ensure that its staff had recent training on how to conduct housing quality standards inspections.
As a result, the Authority spent $18,391 on units that did not meet HUD’s housing quality
standards and subjected program participants to substandard living conditions, because of the
housing quality standard violations that created unsafe living conditions.
Housing Units Did Not Meet
HUD’s Housing Quality
Standards
We selected 14 units from a universe of 32 units that passed an Authority housing
quality inspection between August 1 and October 31, 2013. The 14 units were
selected to determine whether the Authority ensured that the units in its program
met housing quality standards. We inspected the units from November 19 to
November 21, 2013.
Of the 14 units inspected, 13 (93 percent) had a total of 191 housing quality
standards violations, of which 185 predated the Authority’s last inspections. Of
these, 12 units had 184 violations and were considered to be in material
noncompliance with housing quality standards, since they had exigent health and
safety violations, multiple violations that predated the Authority’s previous
inspections, or a combination of both, creating unsafe living conditions. The
Authority is required to ensure that all program-assisted housing meet housing
quality standards requirements both at commencement of and throughout the
assisted tenancy. 23 Table 2 categorizes the 191 housing quality standards
violations in the 13 units that failed our housing quality standards inspections.
23
24 CFR 982.401
10
Table 2:
Violation category Number of violations Number of units
Other interior 47 12
Electrical 34 10
Security 12 7
Heating equipment 12 8
Window 11 7
Water heater 11 7
Wall 9 7
Plumbing/sewer/ water supply 8 3
Sink 6 3
Exterior surface 5 3
Smoke detector 5 4
Fire Exits 5 3
Tub/shower 4 3
Stair/rail/porch 4 4
Site/neighborhood 3 2
Floor 2 2
Toilet 2 2
Roof/gutter 2 2
Garbage/debris/ refuge disposal 2 2
Interior Air Quality 2 2
Ceiling 1 1
Range/refrigerator 1 1
Food preparation/storage 1 1
Foundation 1 1
Manufactured Home Tie Downs 1 1
Total 191
We provided our inspection results to the Authority and HUD’s New Orleans
Office of Public Housing during the audit.
The following pictures depict some of the violations we noted in the 12 units that
materially failed to meet HUD’s housing quality standards.
11
Inspection #1: Leaking J trap caused mold and mildew to form
under the sink.
Inspection #11: Top and sides of the hot water heater were
corroded due to improper installation.
Inspection #2: Closet heat system was surrounded by personal
items posing a fire hazard.
12
Inspection #4: Heating and electrical systems had exposed
electrical wiring.
Inspection #13: Lightweight extension cord stretched from the
main home to the storage shed to supply power posing a potential
electrical hazard.
The Authority Lacked
Adequate Procedures and
Controls
The Authority did not have adequate procedures to ensure compliance with
HUD’s requirements. The Authority only had one inspector, the program
manager, who was responsible for conducting the housing quality inspections.
Although the program manager used the HUD created housing quality standard
checklist and the Authority’s program administrative plan stated that it would
13
comply with HUD’s requirements, 24 the program manager did not perform
adequate inspections to ensure that units met HUD requirements. Further, the
program manager has not attended housing quality standards training since 2007.
In addition, the executive director failed to exercise proper oversight by not
conducting independent quality control reviews. Although the executive director
randomly inspected units in an attempt to ensure compliance, the program
manager who conducted the inspections accompanied her, thus preventing
independence. In addition, the checklist used by the executive director did not
have adequate steps for checking and identifying missed noncompliance items.
As related to procedures for those follow-up reviews, the administrative plan did
not outline steps to ensure the detection of errors, the frequency of the
inspections, or the number of inspections to be conducted.
Conclusion
The Authority’s program participants were subjected to substandard living
conditions because of the housing quality standard violations that created unsafe
living conditions. Due to the Authority not having adequate controls and
procedures, it inspected and passed program units that did not meet HUD’s
housing quality standards. Additionally, the Authority did not properly use the
$18,391 in housing assistance payments disbursed for the 12 units that materially
failed to meet HUD’s housing quality standards.
Recommendations
We recommend that the Director of HUD’s New Orleans Office of Public Housing
require the Authority to
2A. Certify, along with the owners, that the applicable housing quality
standards violations have been corrected for the 13 units cited in this
finding.
2B. Reimburse its program $18,391 from non-Federal funds for the 12 units
that materially failed to meet HUD’s housing quality standards.
2C. Implement procedures and controls to ensure that all program units meet
HUD’s housing quality standards.
2D. Implement procedures and controls to ensure that supervisory quality
control inspections are appropriately conducted and documented.
24
24 CFR 982.401
14
2E. Ensure that its inspection staff attends training and understands housing
quality standard requirements.
15
SCOPE AND METHODOLOGY
We conducted our audit at the Authority’s office in Boutte, LA, and the HUD Office of Inspector
General’s (OIG) office in New Orleans, LA, between November 2013 and March 2014. Our
audit scope covered the Authority’s Section 8 Housing Choice Voucher program for the period
April 1, 2011, through November 30, 2013. We expanded the scope as necessary to accomplish
our audit objective.
To accomplish our objective, we
• Reviewed relevant regulations and program guidance.
• Reviewed the Authority’s organizational chart and written policies for the program.
• Reviewed the Authority’s audited financial statements, HUD monitoring reports, and
board meeting minutes.
• Interviewed Authority staff.
• Reviewed the Authority’s program participant files.
Housing assistance and utility reimbursement payment review - Using the Authority’s housing
assistance payment registers and a stratified random sample with a 95 percent confidence level,
we statistically selected a sample of 85 of the Authority’s monthly housing assistance payments
from a universe of 6,399 payments, totaling more than $3.7 million, made during the audit
period. We reviewed the corresponding participant files for these 85 payments to determine
whether the Authority appropriately calculated the housing assistance and utility reimbursement
payments. For questioned costs, we applied the error to the most recent reexamination through
the end of the eligibility period. Through the file reviews, we assessed the reliability of the
computer-processed housing assistance payment data and determined that the data were
generally reliable.
Comprehensive file review - Using HUD’s Public and Indian Housing Information Center 25
data as of September 30, 2013, we selected a nonstatistical sample of 14 of the Authority’s 196
current program participants for a comprehensive file review. We reviewed the files for the 14
program participants to determine whether the Authority maintained documentation to support
subsidy payments. For questioned costs, we applied the error to the scope of our audit period as
applicable. Through file reviews, we assessed the reliability of the computer-processed tenant
data and determined that the data were generally reliable.
Housing quality standards inspections - Using the Authority’s housing quality standards
inspection reports, we selected a nonstatistical sample of 14 from a total of 32 housing quality
standards inspections completed and passed by the Authority between August 1 and October 31,
25
HUD’s Public and Indian Housing Information Center maintains and gathers data about all of HUD’s public
and Indian housing inventory of housing agencies, developments, buildings, units, housing authority officials,
HUD offices and field staff, and its users.
16
2013. Between November 19 and 21, 2013, we inspected the 14 units to determine whether the
Authority ensured that its program units complied with HUD’s housing quality standards. We
used the results documented in the inspection reports to identify the severity of the violations and
units that were in material noncompliance. For units that failed and were considered in material
noncompliance, we questioned assistance from the date of the Authority’s inspection through
November 30, 2013. Through unit inspections, we assessed the reliability of the computer-
processed housing quality standards inspection data and determined that the data were generally
reliable.
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.
17
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
• Effectiveness and efficiency of operations,
• Reliability of financial reporting, and
• 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
objectives:
• 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; specifically, policies and
procedures intended to ensure that the Authority complied with HUD
regulations and its administrative plan in operating its Section 8 Housing
Choice Voucher program.
• Relevance and reliability of information - Policies and procedures in place
to reasonably ensure that participant file and housing assistance payment
errors were reduced and housing quality standards were enforced.
• Compliance with applicable laws and regulations - Policies and
procedures in place to reasonably ensure that housing assistance payment
disbursements, housing quality standards, and participant file
documentation were complete and accurate and complied with applicable
laws and regulations.
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)
18
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.
Significant Deficiencies
Based on our review, we believe that the following items are significant deficiencies:
• The Authority lacked adequate controls to ensure that housing assistance
and utility reimbursement payments were always accurate, properly
calculated, eligible, and supported (see finding 1).
• The Authority did not have adequate controls in place to ensure that
HUD’s housing quality standards were identified and enforced (see
finding 2).
• The Authority lacked adequate policies and procedures to administer its
program, and its policies did not always comply with applicable laws and
regulations (see findings 1 and 2).
19
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
Recommendation Funds to be put
Ineligible 1/ Unsupported 2/ to better use 3/
number
1A $16,350
1B $1,325
1C $570,834
2B 18,391
Total $34,741 $570,834 $1,325
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 Office of Inspector General (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.
20
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
Comment 1
21
Ref to OIG Evaluation Auditee Comments
Comment 2
22
Ref to OIG Evaluation Auditee Comments
Comment 3
Comment 1
23
Ref to OIG Evaluation Auditee Comments
24
Ref to OIG Evaluation Auditee Comments
25
OIG Evaluation of Auditee Comments
Comment 1 The Authority generally agreed with our conclusions and stated that it has been
working towards improving its programs through a series of agency process and
procedures improvements. The Authority asserted that it has implemented
various new policies and procedures, hired new staff, is training its staff, and has
plans for further improvement. The Authority also asserted that it has completed
the re-inspection of the 13 failed units cited in the report and will certify along
with the landlords that the violations have been corrected. With its written
response, the Authority provided its written policies for HQS, rent reasonableness
and rent calculation. However, we did not assess the validity or adequacy of these
policies, as these policies will be evaluated by HUD staff. We appreciate the
Authority’s efforts in improving its processes and resolving the errors identified
in the report. The Authority should work with HUD to resolve recommendations
1A, 1B, 1C, 1D, 1E, 2A, 2B, 2C, 2D, and 2E.
Comment 2 We agree that there were duplications in the missing files cited in the report. Due
to the voluminous nature of the Authority’s participant files, we did not review or
confirm the existence of the file that the Authority stated that it had located in
storage. Therefore, we revised the number of missing participant files from 7 to
4, instead of 3, in finding 1 and Appendix C. The Authority should work with
HUD to resolve this issue.
Comment 3 The Authority asserted that its financial auditor reviewed three files during the
same period as our review. The Authority asserted that the financial auditor
identified similar issues to that which was reported, but the issues did not affect
the housing assistance payments HAP or tenant’s portion of the rent. However,
the Authority did not provide documentation or further detail to substantiate this
claim.
26
Appendix C
SUMMARY OF PAYMENT DEFICIENCIES
Count Missing Incorrect Incorrect Missing Incorrect Missing Missing Annual or No file Excess
housing utility payment income or income lease or voucher interim payments
quality allowance standard expense calculation housing reexaminati made after
standards used documents assistance on not termination
inspection payments complete
contract
1 X
2 X X X X X X
3 X X X X X
4 X X
5 X X X X
6 X X X
7 X X X
8 X X
9 X X X
10 X X X
11 X X X X
12 X X X
13 X X
14 X
15 X X X X
16 X X X
17
18 X X X X
19 X X X X
20 X X X
21 X X X
22 X X
23 X X X
24 X
25 X X X
26 X X X
27 X X X X
28 X X X X X
29 X X
30 X X X X
27
Count Missing Incorrect Incorrect Missing Incorrect Missing Missing Annual or No file Excess
housing utility payment income or income lease or voucher interim payments
quality allowance standard expense calculation housing reexaminati made after
standards used documents assistance on not termination
inspection payments complete
contract
31 X X X X
32 X X X X
33 X X X
34 X X X X
35 X X
36 X X X X X X
37 X X X X
38 X X X
39 X X X
40 X X X X
41 X X
42 X X
43 X X X
44 X X
45 X X X
46 X X
47 X X X X X
48 X X X
49 X X X X
50 X X
51 X
52 X X X X
53 X X
54 X X X
55 X X X X
56 X X X
57 X
58 X X
59 X X X
60 X X X X X
61 X X X
62 X X
63 X X X X X
64 X X X X X
65 X X X X
66 X X X
28
Count Missing Incorrect Incorrect Missing Incorrect Missing Missing Annual or No file Excess
housing utility payment income or income lease or voucher interim payments
quality allowance standard expense calculation housing reexaminati made after
standards used documents assistance on not termination
inspection payments complete
contract
67 X
68 X X X
69 X X X
70 X X
71 X X X
72 X X X
73 X X X
74
75 X X X X
76 X X X
77 X X X
78 X X X X
79 X X X X
80 X X X X X
81 X X X
82 X X X X
83 X X X X X
84
85 X X X X
Totals 57 54 51 35 24 15 9 9 4 4
29
Appendix D
SUMMARY OF FILE DOCUMENTATION DEFICIENCIES
Types of deficiencies (see legend below table)
Count 1 2 3 4 5 6 7 8 9 10 11
1 X X X
2 X X
3 X X X
4 X X X
5 X X
6 X X X
7 X X X X X
8 X X X
9 X X X X
10 X X X X
11 X X X
12 X X
13 X X X
14 X X
Totals 8 10 11 5 2 1 1 1 1 1 1
Deficiencies legend:
1. Housing quality standards inspection was not completed and passed before the execution of
the lease or housing assistance payments contract.
2. Rent reasonableness assessment was not conducted before the execution of the lease or
housing assistance payments contract.
3. Annual housing quality standards inspection was not conducted.
4. Reexaminations of family income and composition were not conducted annually.
5. Copy of voucher was not maintained.
6. Voucher size did not correspond to occupancy standards.
7. Housing assistance payments contract was not executed within 60 calendar days from the
beginning of the lease term.
8. No criminal background check of the family was conducted.
9. Landlord did not make repairs, and the unit did not pass inspection after the unit initially
failed the housing quality standards inspection.
10. Rent was not reasonable.
11. There was no verification of income from a third-party source.
30
The St. Charles Parish Housing Authority, Boutte, LA, Mismanaged Its Section 8 Housing Choice Voucher Program
Published by the Department of Housing and Urban Development, Office of Inspector General on 2014-07-02.
Below is a raw (and likely hideous) rendition of the original report. (PDF)