The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Lake Metropolitan Housing Authority’s (Authority) Section 8 Housing Choice Voucher program (program). The Authority was selected for audit based upon a congressional request from the Honorable Steven C. LaTourette. Our objective was to determine whether the Authority administered its program in accordance with HUD’s requirements and its program administrative plan regarding the enforcement of housing quality standards. This is the second of multiple audit reports that may be issued regarding the Authority’s program.

The Authority’s program administration regarding housing unit conditions was inadequate. Of the 53 housing units statistically selected for inspection that did not receive a quality control inspection by the Authority, 51 did not meet HUD’s housing quality standards, and 38 had exigent health and safety violations that existed at the time of the Authority’s previous inspections. As a result, more than $42,000 in program funds was spent on units that were not decent, safe, and sanitary. The Authority also received nearly $5,000 in inappropriate program administrative fees. Based on our statistical sample, we estimate that over the next year, HUD will pay more than $903,000 in housing assistance for units with housing quality standards violations that had not received a quality control inspection.

Further, of the 27 housing units that received a quality control inspection by the Authority, 26 did not meet HUD’s housing quality standards, and 15 had exigent health and safety violations that existed at the time of the Authority’s previous inspections. As a result, more than $39,000 in program funds was spent on units that were not decent, safe, and sanitary. The Authority also received nearly $4,000 in inappropriate program administrative fees.

We informed the Authority’s executive director and the Director of HUD’s Cleveland Office of Public Housing of minor deficiencies through a memorandum, dated September 23, 2009.

We recommend that the Director of HUD’s Cleveland Office of Public Housing require the Authority to reimburse its program from nonfederal funds for the improper use of more than $81,000 in program funds and implement adequate procedures and controls to address the finding cited in this audit report. These procedures and controls should help to ensure that more than $903,000 in program funds is spent on housing units that meet HUD’s requirements.

This electronic audit report has been posted to our website and may be viewed directly via this link.  This PDF version will allow you to print the report to your local printer.

http://www.hud.gov/utilities/intercept.cfm?/offices/oig/reports/files/ig1051001.pdf