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D.C. Housing Authority told to return funds

- The Washington Times - Thursday, August 2, 2007

Federal regulators are asking the D.C. Housing Authority to return hundreds of thousands of dollars in questionable expenses and say the authority has kept poor records on how it disbursed more than $18 million in public-housing vouchers, according to a new government audit.

The authority also paid some tenants without performing annual checks to see whether they remained eligible, according to the inspector general for the Department of Housing and Urban Development.

The inspector general said he also found "major errors" involving cases in which the authority failed to take into account some housing recipients' income or overtime when calculating housing-assistance payments.

In addition, there was no evidence in seven cases the authority performed background checks for violent crimes or drug activity.

There was no evidence of criminal activity or fraud within the authority, according to the audit, which was highly critical of the authority's administrative practices.

However, federal auditors say the authority must prove it correctly paid $309,914 in housing-assistance payments for tenants whose files were missing or incomplete. Otherwise, the authority should return the federal money, according to the report.

The audit found city officials failed to annually recertify 57 percent of the 8,835 tenants considered eligible for housing assistance. The authority spent more than $18 million in housing assistance for the uncertified tenants, according to the audit.

"The authority failed to comply with HUD's regulations and its program-administrative plan regarding housing assistance payments," auditors wrote in their final report, which was released earlier to the agency in July.

Authority spokeswoman Dena Michaelson said yesterday officials have fixed many of the problems uncovered in the audit.

"Their findings were a good springboard for us to re-evaluate our program and take a look at the way we were doing things," Miss Michaelson said. "There were some things they pointed out that we agreed to in terms of building a little more quality control."

Miss Michaelson said the authority is reviewing the inspector general's recommendation seeking the return of the roughly $300,000.

In a written response to the report, the authority stated it spends $298 million to provide housing for low-income residents, and that the roughly $300,000 in question was a fraction of one percent of annual expenditures.

In seeking the return of the money, the inspector general's office also said it reviewed 34 housing authority client files. In each file, records were missing or incomplete.

The authority said its failure to certify tenants to ensure they were eligible for continued funding did not result in financial losses.

But according to the audit, there could be other financial consequences. Federal rules state that HUD can reduce or offset funds to a public housing authority if it "fails to perform its administrative responsibilities correctly or adequately under the program."