HA Not Operating Its Section 8 Project-Based Voucher Program According to HUD Requirements

October 7, 2009
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When HUD’s Office of Inspector General (OIG) conducted the first of a two-part audit of the Michigan State Housing Development Authority’s (MSHDA’s) Section 8 project-based voucher program, it found a lack of documentation to support the authority’s selection and approval of program projects. As a result, the MSHDA could not support any of the five projects it had approved since January 1, 2007, which were eligible for more than $1 million in program assistance and nearly $85,000 in program administrative fees. As a result, the OIG auditors estimated that over the next 12 months, the MSHDA will receive more than $70,000 in program funds for improper administrative fees.

The auditors also found that while program units generally met HUD’s housing quality standards, there were still some flaws. Of the 60 program units selected for inspection, 23 did not meet minimum housing quality standards, and four materially failed due to 23-hour exigent health and safety hazards that predated the MSHDA’s previous inspections. As a result, more than $5,700 in program funds was spent on units that were not decent, safe, and sanitary.

The auditors recommended that authority reimburse its program from nonfederal funds for the improper use of more than $85,000 in program funds, provide documentation or reimburse its program more than $1 million from nonfederal funds for the unsupported payments, and implement adequate controls and procedures so that all units meet HUD’s housing quality standards.

n HUD Audit report 2009-CH-1019, 9/30/09.