oversight

The Fairmont-Morgantown Housing Authority, Fairmont, WV, Did Not Always Administer Its Housing Choice Voucher Program in Accordance With Applicable Program Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2018-02-12.

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

         Fairmont-Morgantown Housing
            Authority, Fairmont, WV
                  Housing Choice Voucher Program




Office of Audit, Region 3          Audit Report Number: 2018-PH-1001
Philadelphia, PA                                    February 12, 2018
To:            Russell DeSouza, Acting Director, Office of Public Housing, Baltimore Field
               Office, 3BPH
               //signed//
From:          David E. Kasperowicz, Regional Inspector General for Audit, Philadelphia
               Region, 3AGA
Subject:       The Fairmont-Morgantown Housing Authority, Fairmont, WV, Did Not Always
               Administer Its Housing Choice Voucher Program in Accordance With Applicable
               Program Requirements


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 Fairmont-Morgantown Housing Authority’s
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 website. 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
215-430-6734.
                    Audit Report Number: 2018-PH-1001
                    Date: February 12, 2018

                    The Fairmont-Morgantown Housing Authority, Fairmont, WV, Did Not
                    Always Administer Its Housing Choice Voucher Program in Accordance
                    With Applicable Program Requirements



Highlights

What We Audited and Why
We audited the Fairmont-Morgantown Housing Authority’s Housing Choice Voucher program
because (1) we received a complaint alleging that the Authority did not follow program
requirements, (2) the Authority administered 1,117 vouchers and received more than $5.2 million in
funding for fiscal year 2016, and (3) we had not audited its program. Our audit objective was to
determine whether the Authority adequately administered its Housing Choice Voucher program in
compliance with U.S. Department of Housing and Urban Development (HUD) requirements
regarding participant eligibility and applicant selection. This is the first of two reports on the
Authority’s program.

What We Found
The Authority did not comply with HUD’s and its own requirements when administering its
Housing Choice Voucher program. Specifically, it (1) did not conduct criminal background
checks of applicants and participants through State or local law enforcement or court records of
the local jurisdiction, (2) made housing assistance payments for ineligible participants, (3) did
not always obtain written citizenship declarations and properly report family citizenship status,
and (4) did not maintain an accurate waiting list for applicant selection. As a result, the
Authority (1) made unsupported housing assistance payments totaling more than $4.9 million,
(2) made ineligible housing assistance payments totaling $19,520, (3) did not maintain and report
correct family citizenship status, and (4) did not treat program applicants fairly and consistently.

What We Recommend
We recommend that HUD require the Authority to (1) provide documentation to show that adult
members of households for whom the Authority made housing assistance payments totaling
more than $4.9 million were not engaged in drug-related or violent criminal activity or repay its
program from non-Federal funds for any amounts it cannot support and if the participants are
deemed ineligible, follow applicable regulations to terminate or modify assistance; (2) repay its
program $19,520 from non-Federal funds for the ineligible housing assistance payments; (3)
correct the errors identified by the audit; and (4) develop and implement controls to ensure that it
follows policies and procedures required by its administrative plan. We also recommend that the
Director of HUD’s Baltimore Office of Public Housing refer the Authority to the Office of Fair
Housing and Equal Opportunity for a review of the Authority’s waiting list to ensure that all
areas comply with HUD requirements.
Table of Contents
Background and Objective......................................................................................3

Results of Audit ........................................................................................................4
         Finding: The Authority Did Not Always Administer Its Housing Choice Voucher
         Program in Accordance With Applicable Program Requirements ............................. 4

Scope and Methodology ...........................................................................................8

Internal Controls ....................................................................................................10

Appendixes ..............................................................................................................11
         A. Schedule of Questioned Costs .................................................................................. 11

         B. Auditee Comments and OIG’s Evaluation ............................................................. 12




                                                             2
Background and Objective
The Fairmont-Morgantown Housing Authority is a quasi-governmental agency that administers the
Housing Choice Voucher program for four counties in West Virginia: Marion, Monongalia, Preston
and Taylor. This program provides rental assistance to low-income families, the elderly, and the
disabled to enable them to afford decent, safe, and sanitary housing in the private market through
Federal funds from the U.S. Department of Housing and Urban Development (HUD). A five-
member board of commissioners governs the Authority. The Authority’s offices are located at 103
12th Street, Fairmont, WV.
Under the Section 8 Housing Choice Voucher program, HUD authorized the Authority to provide
tenant-based leased housing assistance payments to 1,117 eligible households in fiscal years 2016
and 2017. HUD authorized the Authority the following financial assistance for housing choice
vouchers for fiscal years 2016 and 2017.

                              Year            Annual budget authority
                              2016                    $5,218,631
                              2017                     5,954,270

The Authority did not administer any project-based vouchers.
HUD regulations at 24 CFR (Code of Federal Regulations) 982.54(c) require the Authority to
administer its program in accordance with its administrative plan.
Our audit objective was to determine whether the Authority adequately administered its Housing
Choice Voucher program in compliance with HUD requirements regarding participant eligibility
and applicant selection.




                                                 3
Results of Audit

Finding: The Authority Did Not Always Administer Its Housing
Choice Voucher Program in Accordance With Applicable Program
Requirements
The Authority did not always administer its program in compliance with HUD’s and its own
requirements regarding participant eligibility and applicant selection. Specifically, the Authority
did not (1) conduct criminal background checks through State or local law enforcement or court
records when the household member lived in the local jurisdiction for the previous 3 years, (2)
properly prorate assistance for only the eligible members of families headed by noncitizen
students, (3) always obtain written citizenship declarations and properly report family citizenship
status, and (4) maintain an accurate waiting list for applicant selection. These conditions
occurred because (1) the Authority wanted to reduce costs and believed basic, free internet
research was suitable for conducting criminal record checks, (2) its staff was not always aware of
requirements, and (3) it lacked controls to ensure that it followed policies and procedures
required by its administrative plan. As a result, the Authority (1) made unsupported housing
assistance payments totaling more than $4.9 million 1, (2) made ineligible housing assistance
payments totaling $19,520, (3) did not maintain and report correct family citizenship status, and
(4) did not treat applicants fairly and consistently.

The Authority Did Not Conduct Criminal Background Checks as Required
The Authority did not conduct criminal background checks on adult household members through
State or local law enforcement records or court records when the household member lived in the
local jurisdiction for the previous 3 years as required by section 3.2 of its administrative plan.
There was no documentation in the 10 participant files reviewed to show that the Authority
conducted criminal background checks in accordance with its policy. This occurred because, as
a cost-saving measure, the Authority relied on basic, free internet research to conduct criminal
record checks of applicants and participants instead of following its policy. The basic, free
internet searches did not provide all of the required information that would have been provided
had the Authority obtained State or local law enforcement records or court records.
Regulations at 24 CFR 982.553(a)(2)(ii) allow the Authority to prohibit admission to its program
if it determines that any household member is currently engaged in or had engaged in, during a
reasonable timeframe before admission, the following: (1) drug-related activity; (2) violent
criminal activity; (3) other criminal activity that may threaten the health, safety, or right to
peaceful enjoyment of the premises by other residents or those residing in the vicinity; and (4)
other criminal activity, which may threaten the health or safety of the owner, property staff, or
persons performing an administrative function on behalf of the public housing agency. The


1
    Unsupported costs are those costs for which we cannot determine eligibility at the time of the audit. In this case,
    the Authority lacked documentation to show that it conducted required criminal background checks.


                                                           4
Authority’s policy states that it will deny assistance to a family because of drug-related or violent
criminal activity by family members. The policy also states that this check will be made through
State or local law enforcement or court records for cases in which the individual lived within the
Authority’s jurisdiction for the last 3 years and the Authority may use other law enforcement
agencies or the Federal Bureau of Investigation’s National Crime Information Center.
The Authority’s former executive director incorrectly believed that the method the Authority
used was acceptable; however, the Authority was searching for alternative ways to perform
criminal background checks. Because the Authority did not comply with the terms of its policy,
it made more than $4.9 million in unsupported housing assistance payments from September
2016 to August 2017 on behalf of 1,101 program participants that were active in the program as
of August 2017.

The Authority Made Housing Assistance Payments for Ineligible Noncitizen Students
The Authority did not properly prorate assistance for only the eligible members of families
headed by noncitizen students. HUD regulations at 24 CFR 5.522 prevent assistance to any
person who is determined to be a noncitizen student and to family members who accompany the
student to the United States but allow for prorating assistance for eligible family members.
Section 10.3 of the Authority’s administrative plan states that noncitizen students on student
visas, although in the country legally, are not eligible to be admitted to its program. The
Authority did not properly prorate assistance for three families that had a noncitizen student as
the head of household and had children who were born in the United States at the time of their
admission into the program. As a result, the Authority made ineligible housing assistance
payments totaling $19,520. This condition occurred because the responsible employees were
unaware of the requirement to prevent assistance to noncitizen students but prorate assistance
based on their eligible family members.

The Authority Did Not Always Obtain Written Citizenship Declarations and Properly
Report Family Citizenship Status
The Authority did not obtain a written citizenship declaration for all members of its participants’
families. HUD regulations at 24 CFR 5.508(c)(1) require that for each family member, a written
declaration be made as to his or her citizenship or immigrant status and for each child, the
declaration be signed by the adult residing in the unit responsible for the child. Section 10.3 of
the Authority’s administrative plan requires it to obtain this declaration before admission or at
the first reexamination. We reviewed the 16 families that the Authority reported to HUD as
noncitizens and found that a member of 2 families did not submit a written citizenship
declaration to the Authority at either the time of the family’s application or during
recertifications. One of the two persons was a United States’ citizen, the other was not but had
eligible immigration status. This condition occurred due to staff errors. The Authority
incorrectly reported to HUD the citizenship status of two other families as noncitizen, although
documentation in the participant file showed their United States citizenship. This condition
occurred due to data entry errors and a lack controls to ensure the accuracy of information the
Authority reported to HUD. As a result of these conditions, the Authority did not maintain and
report correct family citizenship status.




                                                  5
The Authority Did Not Always Maintain an Accurate Waiting List for Applicant Selection
The Authority did not always accurately record disability preference points for applicants on its
waiting list. Of eight applications reviewed indicating that a disabled person was a household
member, the Authority awarded preference points to none of the applicants when they were
placed on the waiting list. Also, of 12 applicants reviewed, to whom the Authority awarded
disability preference points, the files for 2 applicants lacked documentation to show that the
Authority verified their disability before admitting them to the program. The Authority’s
administrative plan required that it give preference to applicants with a family member who was
either disabled, working, a West Virginia resident, or displaced. Section 4.10 of HUD’s Housing
Choice Voucher Guidebook 7420.10G required the Authority to verify the preference based on
current circumstances before accepting the family into the program. These conditions occurred
because the Authority lacked controls to ensure that it awarded and verified preference points to
applicants before providing assistance as required.
Conclusion
The Authority did not comply with HUD’s and its own requirements when administering its
program. It (1) did not conduct criminal background checks of applicants and participants
through State or local law enforcement as required, (2) made housing assistance payments for
ineligible participants in its program, (3) did not always obtain written citizenship declarations
and properly report family citizenship status, and (4) did not maintain an accurate waiting list for
applicant selection. As a result, it (1) made unsupported housing assistance payments totaling
more than $4.9 million, (2) made ineligible housing assistance payments totaling $19,520, (3)
did not maintain and report correct family citizenship status, and (4) did not treat program
applicants fairly and consistently.

Recommendations
We recommend that the Director of HUD’s Baltimore Office of Public Housing require the
Authority to
         1A.     Conduct criminal record background checks in accordance with its policies and
                 procedures to ensure that adult members of households for whom the Authority
                 made housing assistance payments totaling $4,920,685 2 were eligible to
                 participate in the program or repay its program from non-Federal funds for any
                 amount that it cannot support. If the participants are deemed ineligible, the
                 Authority should follow applicable regulations to terminate or modify assistance.
         1B.     Develop and implement controls to ensure that criminal records checks are
                 conducted, according to policy, at application and when family composition
                 changes.
         1C.     Repay its program $19,520 from non-Federal funds for the ineligible housing
                 assistance payments made.


2
    This amount does not include $30,848 in housing assistance payments that the Authority made for the members
    of the 10 households that we reviewed. The searches of public and non-public records that we conducted on the
    members of the 10 households did not disclose any violent or drug-related criminal activity.


                                                         6
      1D.    Correct the errors in the files of the noncitizen families identified by the audit.
      1E.    Develop and implement controls to ensure that it follows policies and procedures
             found in its administrative plan for verification of citizenship or eligible
             noncitizen status.
      1F.    Develop and implement controls to ensure that assistance is properly prorated for
             eligible family members of noncitizen students.
      1G.    Review the citizenship documentation for all adult household members residing in
             assisted housing and verify correct entry to applicable HUD systems.
      1H.    Correct the waiting list errors identified by the audit.
      1I.    Develop and implement controls to ensure that it follows policies and procedures
             to award and verify preference points for program applicants as required by its
             administrative plan.
      1J.    Train staff on the requirements for which it will develop and implement controls
             as a result of the recommendations made in this audit report.
We recommend that the Director of HUD’s Baltimore Office of Public Housing
      1K.    Refer the Authority to the Office of Fair Housing and Equal Opportunity for a
             review of the Authority’s waiting list to ensure that all areas comply with HUD
             requirements.




                                                7
Scope and Methodology
We conducted the audit from April through December 2017 at the Authority’s office located at
103 12th Street, Fairmont, WV, and our office located in Pittsburgh, PA. The audit covered the
period January 1, 2016, through April 15, 2017, but was expanded to include data from HUD’s
Public and Indian Housing Information Center and the Authority’s housing assistance payment
register and waiting lists through August 2017 as noted below.
For the period January 1, 2016, to April 15, 2017, we selected a nonstatistical sample of 10
participant files for review. We selected 5 files from 33 participants who were admitted during
the first 30 days (January 1 to January 30, 2016) and 5 files from the 61 participants who were
admitted during the last 30 days of this period (March 17 to April 15, 2017). Although our
sample was nonstatistical, the results applied to the entire universe of active participants as of
August 2017. The Authority confirmed that the condition that we identified in the sample of 10
files existed in all of the other active files because it was knowingly not complying with the
policy in its administrative plan to conduct criminal background checks on adult household
members through State or local law enforcement records. The Authority made more than $4.9
million in unsupported housing assistance payments from September 2016 to August 2017 on
behalf of 1,101 program participants that were active in the program as of August 2017.
For our review of noncitizen students participating in the Authority’s program, we obtained a
report of all heads of household receiving assistance through its program for the period
January 1, 2016, through July 31, 2017, from HUD’s Public and Indian Housing Information
Center. We sorted the 1,468 heads of household by the citizenship data field and found 15
eligible noncitizens, 1 ineligible noncitizen, and 1,452 eligible citizens. We selected all 16
noncitizens for testing. For these noncitizens, we expanded our audit period to obtain the
amount of assistance payments each received from admission to the program, the earliest being
October 2002, through the housing assistance payment register, dated September 2017.
For our review of the Authority’s waiting list, we obtained the waiting lists used by the
Authority, dated March 27, May 8, and July 6, 2017. We compared these waiting lists to a
participant listing, dated August 12, 2017, determining that 63 participants were admitted to the
program. We identified and removed 33 duplicates from this universe because the applicant was
a dependent of a current participant, appeared on multiple waiting lists, or was listed more than
once due to data entry errors. Additionally, we filtered the applicant data through the disability
category to identify 12 participants who claimed and were awarded disability preference points.
Finally, using the July 6, 2017, waiting list, we identified eight applicants who claimed disability
but were not awarded preference points. Therefore, our universe of 20 applicants claiming
disability for review consisted of 12 who were awarded preference and 8 who were not.
To accomplish our objective, we
   •   Reviewed applicable laws, regulations, the Authority’s administrative plan, HUD’s
       program requirements at 24 CFR 982, HUD’s Housing Choice Voucher Guidebook
       7420.10 G, and other guidance.



                                                  8
   •   Reviewed participant files and data, waiting lists, inspection reports, board meeting
       minutes, participant application files, audited financial statements for fiscal years 2015
       and 2014, organizational chart, and other program records.
   •   Reviewed HUD’s Public and Indian Housing Information Center data and monitoring
       reports for the Authority.
   •   Performed searches of public and non-public record databases.
We also interviewed Authority employees and HUD staff.
To achieve our audit objective, we relied in part on computer-processed data from the
Authority’s computer system, including participant information, housing assistance payment
registers, and waiting lists. Although we did not perform a detailed assessment of the reliability
of the data, we did perform a minimal level of testing and found the data to be adequate for our
purposes.
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(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




                                                 9
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 objective:

•   Effectiveness and efficiency of program operations – Policies and procedures that
    management has implemented to reasonably ensure that a program meets its objectives.
•   Validity and reliability of data – Policies and procedures that management has implemented
    to reasonably ensure that valid and reliable data are obtained, maintained, and fairly
    disclosed in reports.
•   Compliance with applicable laws and regulations – Policies and procedures that management
    has implemented to reasonably ensure that program participants comply with program 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) 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 Deficiency
Based on our review, we believe that the following item is a significant deficiency:
•   The Authority lacked controls to ensure that it complied with applicable program
    requirements.




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Appendixes

Appendix A


                          Schedule of Questioned Costs
                  Recommendation
                                   Ineligible 1/ Unsupported 2/
                      number
                          1A                               $4,920,685
                          1C               $19,520


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.




                                              11
Appendix B
             Auditee Comments and OIG’s Evaluation



Ref to OIG    Auditee Comments
Evaluation




                               12
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation




Comment 1




                               13
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation



Comment 2




Comment 3




Comment 4




                               14
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation



Comment 5




Comment 5



Comment 5



Comment 6
Comment 7

Comment 5



Comment 8




                               15
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation


Comment 9
Comment 10




                               16
                         OIG Evaluation of Auditee Comments


Comment 1   The Authority stated that it conducted criminal background checks on all
            applicants, using web-based services and published digital records of local law
            enforcement and verified that all participants had records that qualified them to
            participate in the program. It also stated that it found its searches to be effective
            in meeting the requirements in its administrative plan, although it acknowledged
            that it did not document the results of its criminal background checks. The
            Authority acknowledged that it did not document its criminal background checks
            although it asserted that it completed them in part with sex offender registry
            searches it conducted and that it described as “well-documented” in its files.
            During the audit, when we addressed this issue with the Authority, its former
            executive director and staff stated that free websites were used, instead of State or
            local law enforcement or court records, as required by its administrative plan and
            that efforts were being made to find alternative methods in order to comply with
            the administrative plan. According to regulations at 24 CFR 982.54(c), housing
            authorities must administer the program in accordance with their administrative
            plan. As stated in the audit report, there was no documentation in the 10
            participant files we reviewed to show that the Authority conducted criminal
            background checks in accordance with its policy. As a cost-saving measure, the
            Authority relied on basic, free internet research to conduct criminal record checks
            of applicants and participants instead of following its policy. The basic, free
            internet searches did not provide all of the required information that would have
            been provided had the Authority obtained State or local law enforcement records
            or court records. To date, the Authority has not provided any evidence including
            request letters, emails, or invoices to show that it conducted criminal background
            checks as required.
Comment 2   The Authority acknowledged that it made data entry errors. However, it
            disagreed with an error because it felt that it maintained sufficient documentation
            in the participant file to show that it verified the applicant’s disability prior to
            admitting the applicant into the program. The Authority believes that this clerical
            error does not justify our conclusion that the Authority did not treat program
            applicants fairly and consistently.
            The Authority’s comments address only part of the audit results. The Authority’s
            comments do not address the part of our review that showed that it did not award
            disability preference points to eight applicants although they claimed disability.
            These eight applicants would have been listed higher on the Authority’s waiting
            list had it awarded the preference points to them. Accordingly, the applicants
            could have been admitted into the program sooner. Our overall conclusion, based
            on review of 20 applicants claiming disability, was that the Authority did not treat
            program applicants fairly and consistently. As part of the audit resolution




                                               17
            process, the Authority can provide documentation to HUD to support its
            arguments.
Comment 3   The Authority believes that we overstated in an alarming manner the nature and
            gravity of the audit by reporting millions of Federal dollars as unsupported
            payments. It disagreed with the recommendation because it asserted that it
            conducted criminal background checks on all applicants through a variety of
            internet searches, newspapers and court records. It asserted that our review of 10
            files provided reasonable assurance that the checks it performed were adequate.
            We did not overstate the effect of the Authority’s failure to document that it
            conducted criminal background checks in accordance with its administrative plan.
            Based on our review of 10 files and the statements made by the Authority’s
            former executive director and staff, we reasonably concluded that the Authority
            did not conduct criminal background checks as required. Moreover, in its written
            response to this report, the Authority acknowledged that it did not document its
            criminal background checks. Without any evidence to show that the criminal
            background checks were conducted as required, our categorization of the related
            payments as “unsupported” is appropriate because unsupported costs are those
            costs charged to a HUD-financed or HUD-insured program or activity for which
            we cannot determine eligibility at the time of the audit. The Authority can
            support the costs by providing documentation to show that adult household
            members had no drug-related or violent criminal activity that would disqualify
            them from participating in the program.
Comment 4   The Authority stated that it has implemented a criminal background check form to
            document that it performed criminal background checks before admitting
            applicants into the program. It also stated that it has made some changes to its
            administrative plan to clearly define how criminal background checks are done.
            We commend the Authority for being proactive. As part of the audit resolution
            process, HUD will evaluate the Authority’s corrective actions to determine
            whether they satisfy the recommendation.
Comment 5   The Authority indicated that it will take action to address the recommendation.
            As part of the audit resolution process, HUD will evaluate the Authority’s
            corrective actions to determine whether they satisfy the recommendation.
Comment 6   The Authority stated that it made the necessary corrections noted in the report.
            As part of the audit resolution process, HUD will evaluate the Authority’s
            corrective actions to determine whether they satisfy the recommendation.
Comment 7   The Authority did not provide a comment for recommendation 1I.
Comment 8   The Authority, although it acknowledged that this recommendation was addressed
            to the Director of HUD’s Baltimore Office of Public Housing for action, stated
            that it disagrees with this recommendation because the number of errors related to
            the preference issue was less than 1 percent of the preferences it issued. It was


                                              18
              not negligent actions but data entry errors that caused the errors identified by the
              audit. It also stated that it has implemented quality control procedures and feels
              confident that these minimal key stroke errors will be eliminated in the future.
              Based on our review of files for 20 applicants claiming disability, we found
              problems in 10 files. Specifically, in eight files, the applications indicated that a
              disabled person was a household member, but the Authority awarded no
              preference points to the applicants when they were placed on the waiting list.
              Files for 2 applicants to whom the Authority awarded disability preference points
              lacked documentation to show that the Authority verified their disability before
              admitting them to the program. We found that these conditions occurred because
              the Authority lacked controls to ensure that it awarded and verified preference
              points to applicants before providing assistance as required. Because we found
              issues in half of the files we reviewed, we considered it appropriate to make a
              recommendation to the Director of HUD’s Baltimore Office of Public Housing to
              refer the Authority to the Office of Fair Housing and Equal Opportunity. If the
              Authority’s statements that it is committed to the delivery of a well-managed
              program, as well as the delivery of the highest quality service to its program
              participants and HUD, are accurate, then it should be receptive to a review by the
              Office of Fair Housing and Equal Opportunity to ensure that all areas of its
              waiting list comply with HUD requirements.
Comment 9     The Authority stated that the “Highlights” section of the report overstated and
              negatively exaggerated our characterization of it and its management of the
              Housing Choice Voucher program.
              The “Highlights” section of the report does not overstate or exaggerate our
              characterization of the Authority and its management of the Housing Choice
              Voucher program. Based on our audit objective, the “What We Found” section of
              the “Highlights” fairly and correctly reports that the Authority did not comply
              with HUD’s and its own requirements when administering its Housing Choice
              Voucher program, and specifically, that it (1) did not conduct criminal
              background checks of applicants and participants through State or local law
              enforcement or court records of the local jurisdiction, (2) made housing assistance
              payments for ineligible participants, (3) did not always obtain written citizenship
              declarations and properly report family citizenship status, and (4) did not maintain
              an accurate waiting list for applicant selection. Based on the audit results, we
              made 10 reasonable recommendations to the Authority. These recommendations
              are intended to correct conditions identified by the audit and help the Authority
              improve its program. Moreover, in its written comments to the report, the
              Authority acknowledged that it made errors in administering its program and
              indicated that it would take, or that it had already taken, action to address the
              majority of the recommendations.
Comment 10 The Authority stated that during interviews and meetings with the auditors, the
           finding and recommendations were described as typical of other programs across



                                                19
the country. Our audits generally identify problems. The extent of the problems
reported depends on the management and control environment of the entity being
audited. Our audit reports frequently include findings with ineligible and
unsupported costs because auditees did not comply with applicable program
requirements and did not maintain documentation to support its use of funds.




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