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SECTION 8: THERE'S STILL ROOM FOR IMPROVEMENT

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THOMPSON: HPD HAS IMPROVED SECTION 8 VOUCHER PROGRAM

New York City Comptroller William C. Thompson, Jr. today issued a follow-up audit of the New York City Department of Housing Preservation and Development's (HPD) Section 8 voucher program, which found that it has made efforts to correct deficiencies revealed in a previous audit issued in October 2005.

"While HPD has addressed some of the issues my previous audit pointed out regarding the Section 8 voucher program, it could still improve its operations," Thompson said. "Specifically, HPD should follow its own guidelines and those of the U.S. Department of Housing and Urban Development to ensure that payments made to landlords are appropriate."  

HPD is the largest municipal developer of affordable housing in the nation. It protects the existing housing stock and expands housing options for New Yorkers as it strives to improve the availability, affordability, and quality of housing in New York City 

Section 8 is federally funded housing subsidy program that offers low-income families the opportunity to choose and lease safe, decent and affordable privately-owned rental housing that they otherwise could not afford by providing additional, supplemental funds. Local public authorities apply to HUD for Section 8 funds from the Housing Choice Voucher (HCV) Program, which are then provided to eligible families in accordance with HUD rules and regulations. In New York City, HPD and the New York City Housing Authority provide Section 8 housing vouchers. HPD administers vouchers for approximately 26,000 households.  

HPD targets its Section 8 assistance to households whose primary nighttime residence is either a publicly- or privately-operated shelter under HPD jurisdiction or another household that is providing the applicant temporary residence. For Fiscal Year 2008, HPD received $258,040,365 in Section 8 funds from HUD and $13,217,479 and expended $296,851,835. 

Thompson's audit, which can be viewed at www.comptroller.nyc.gov , determined whether HPD implemented the five recommendations made in the previous audit, Audit Report on the Section 8 Housing Choice Voucher Program of the Department of Housing Preservation and Development. 

In Thompson's audit issued October 17, 2005, auditors found that HPD properly accounted for Section 8 funds that it received from U.S. Department of Housing and Urban Development for the Section 8 HCV Program and generally disbursed funds to landlords appropriately on behalf of eligible families in accordance with HUD and HPD guidelines. The audit also found that payments made to landlords were generally in accordance with HUD and HPD guidelines. 

The 2005 audit also found that in some instances HPD files lacked the required documentation and as a result it could not be determined whether families were eligible for benefits, whether landlords received appropriate payments, and whether annual inspections and re-certifications were conducted as required by HPD guidelines. 

Also, HPD made excessive Housing Assistance Payments (HAP) to landlords totaling $11,141 for seven client cases, and $195,434 in questionable payments to landlords for 42 client cases that lacked required documents, preventing the auditors from determining the appropriateness of these payments. Thus, that audit estimated that $5,525,493 of $101,900,572 paid to landlords was questionable. 

The follow-up audit found that of five recommendations made in the 2005, HPD has implemented two and partially implemented three.  

Auditors found that of 25 files reviewed, 12 files lacked 16 required documents. Subsequently, HPD submitted documents for eight of the 12 files, proving the appropriateness of the payment made to the landlord. Of the remaining four files that lacked documentation, three did not have a HAP contract and the fourth had a failed inspection.  

Also, auditors' review of HPD's HAP Register Payment History Reports determined that payments made in four of the 25 files reviewed lacked proper documentation, indicating a lack of internal controls. 

The previous audit estimated that $5,525,493 was questionable due to the lack of required documentation. Comparatively, auditors now estimate that $3.9 million paid to landlords could be in question due to lack of proper documentation. 

Further, HPD was able to recoup only $1,122 of the total $11,141 in incorrect payments found in the previous audit. The remaining $10,019 could not be recouped because HPD did not have the documentation required by HUD and HPD regulations. 

To address the issues that still exist, Thompson recommended that HPD:

  • Ensure that all necessary documents are included in the files, specifically those related to HAP contracts, and that it adheres to all applicable HUD and HPD regulations and guidelines. 
  • Determine whether the four files for which payments were made despite the lack of proper documentation are eligible for Section 8 subsidies, and if necessary, begin recoupment procedures.

In its response, HPD generally agreed with the audit.

 

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THOMPSON: HPD HAS IMPROVED SECTION 8 VOUCHER PROGRAM

 

New York City Comptroller William C. Thompson, Jr. today issued a follow-up audit of the New York City Department of Housing Preservation and Development's (HPD) Section 8 voucher program, which found that it has made efforts to correct deficiencies revealed in a previous audit issued in October 2005.

 

"While HPD has addressed some of the issues my previous audit pointed out regarding the Section 8 voucher program, it could still improve its operations," Thompson said. "Specifically, HPD should follow its own guidelines and those of the U.S. Department of Housing and Urban Development to ensure that payments made to landlords are appropriate."

 

HPD is the largest municipal developer of affordable housing in the nation. It protects the existing housing stock and expands housing options for New Yorkers as it strives to improve the availability, affordability, and quality of housing in New York City.

 

Section 8 is federally funded housing subsidy program that offers low-income families the opportunity to choose and lease safe, decent and affordable privately-owned rental housing that they otherwise could not afford by providing additional, supplemental funds. Local public authorities apply to HUD for Section 8 funds from the Housing Choice Voucher (HCV) Program, which are then provided to eligible families in accordance with HUD rules and regulations. In New York City, HPD and the New York City Housing Authority provide Section 8 housing vouchers. HPD administers vouchers for approximately 26,000 households.

 

HPD targets its Section 8 assistance to households whose primary nighttime residence is either a publicly- or privately-operated shelter under HPD jurisdiction or another household that is providing the applicant temporary residence. For Fiscal Year 2008, HPD received $258,040,365 in Section 8 funds from HUD and $13,217,479 and expended $296,851,835.

 

Thompson's audit, which can be viewed at www.comptroller.nyc.gov , determined whether HPD implemented the five recommendations made in the previous audit, Audit Report on the Section 8 Housing Choice Voucher Program of the Department of Housing Preservation and Development.

 

In Thompson's audit issued October 17, 2005, auditors found that HPD properly accounted for Section 8 funds that it received from U.S. Department of Housing and Urban Development for the Section 8 HCV Program and generally disbursed funds to landlords appropriately on behalf of eligible families in accordance with HUD and HPD guidelines. The audit also found that payments made to landlords were generally in accordance with HUD and HPD guidelines.

 

The 2005 audit also found that in some instances HPD files lacked the required documentation and as a result it could not be determined whether families were eligible for benefits, whether landlords received appropriate payments, and whether annual inspections and re-certifications were conducted as required by HPD guidelines.

 

Also, HPD made excessive Housing Assistance Payments (HAP) to landlords totaling $11,141 for seven client cases, and $195,434 in questionable payments to landlords for 42 client cases that lacked required documents, preventing the auditors from determining the appropriateness of these payments. Thus, that audit estimated that $5,525,493 of $101,900,572 paid to landlords was questionable.

 

The follow-up audit found that of five recommendations made in the 2005, HPD has implemented two and partially implemented three.

 

Auditors found that of 25 files reviewed, 12 files lacked 16 required documents. Subsequently, HPD submitted documents for eight of the 12 files, proving the appropriateness of the payment made to the landlord. Of the remaining four files that lacked documentation, three did not have a HAP contract and the fourth had a failed inspection.

 

Also, auditors' review of HPD's HAP Register Payment History Reports determined that payments made in four of the 25 files reviewed lacked proper documentation, indicating a lack of internal controls.

 

The previous audit estimated that $5,525,493 was questionable due to the lack of required documentation. Comparatively, auditors now estimate that $3.9 million paid to landlords could be in question due to lack of proper documentation.

 

Further, HPD was able to recoup only $1,122 of the total $11,141 in incorrect payments found in the previous audit. The remaining $10,019 could not be recouped because HPD did not have the documentation required by HUD and HPD regulations.

 

To address the issues that still exist, Thompson recommended that HPD:

 

  • Ensure that all necessary documents are included in the files, specifically those related to HAP contracts, and that it adheres to all applicable HUD and HPD regulations and guidelines.

 

  • Determine whether the four files for which payments were made despite the lack of proper documentation are eligible for Section 8 subsidies, and if necessary, begin recoupment procedures.

 

In its response, HPD generally agreed with the audit.

 

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