The Rock Island Housing Authority has been asked to reimburse more than $600,000 to the U.S. Department of Housing and Urban Development (HUD), according a report from The Edgar County Watchdogs in Illinois Leaks.
The housing authority did not comply with the HUD regulations regarding its Housing Choice Voucher and Family Self-Sufficiency programs.
The U.S. Office of Inspector General (USOIG) released its audit report regarding the Housing Authority on Sept. 28. The summary closed with its recommendations.
"We recommend that the acting director of HUD’s Chicago Office of Public Housing require the authority to (1) reimburse its program more than $507,000 from non-federal funds for the ineligible housing assistance paid to the entities and the inappropriate escrow disbursements, (2) support or reimburse its program more than $130,000 from non-federal funds for the unsupported coordinator grant funds and escrow payments, (3) transfer more than $2,100 to or from its program account for the underfunded and overfunded escrows, and (4) implement adequate procedures and controls to address the findings cited in this audit report."
The Housing Choice Voucher program, which is funded by HUD, is administered by the Rock Island Housing Authority. The housing authority is made up of seven board of commissioner members who were appointed by the mayor. The executive director of the housing authority is appointed by the board. The director is responsible for the housing authority's staff and business affairs.
The Housing Choice Voucher program provides vouchers to very low-income families in order to rent or lease private rental properties. The housing authority had 415 vouchers in July 2016. It received nearly $1.2 million for the program in fiscal year 2016.
HUD-assisted families can participate in the Family Self-Sufficiency program. The program allows families to increase their earned income and decrease their dependence on public assistance. Program coordinators, paid by salary, work with a program coordinating committee to locate and secure public and private resources. There were 24 active Family Self-Sufficiency program participants in May 2016.
The audit found that the housing authority used its own program inspectors to conduct move-in, annual and housing quality standards inspections for 56 units in the Lynden Lane project, Douglas Park Place and Express Housing 1. The housing authority's instrument, Community Housing Services Inc,. held a controlling interest in these properties. Under HUD regulations, independent third parties should have conducted these inspections.
The housing authority contracted with independent third parties in April and May. The agreements were approved by HUD on June 22.
The USOIG recommended that the Rock Island Housing Authority be required to reimburse $497,668 in improper housing assistance payments and $43,673 in administrative fees.
The audit also found deficiencies in the Family Self-Sufficiency program. Sixty-three of the 64 households that participated in the program between January 2014 and 2015 had incorrect or incomplete documentation in their files. Sixty-two participants' files lacked documentation of their escrow account balances. In addition, the files did not contain documentation of education, job training, counseling or other assistance required by the program in order for participants to become self-sufficient.
The housing authority also lacked documentation to support escrow account disbursements and failed to correctly calculate the participants' escrow accounts. Twenty of the 64 participants' escrow accounts were incorrect, with 11 overfunded by a total of $30,842 and three underfunded by $261. Six participants received inappropriate or unsupported escrow account disbursements. Other discrepancies were also found in the escrow accounts. While the housing authority made adjustments to 10 of the 14 incorrect escrow balances, four were still inaccurate in August.
The USOIG found that the housing authority's executive director knew that the manager and program coordinator did not manage the Family Self-Sufficiency program according to HUD regulations. A new family self-sufficiency manager was hired in June 2015 and a new program coordinator was hired in December.
The housing authority received $128,228 from two HUD grants between January 2014 and December 2015. The USOIG recommended that the housing authority be required to determine the portion of the coordinator grant funds that were earned by meeting the program requirements and return the unearned funds to HUD.
HUD's Chicago Office of Public Housing will oversee the recommendations made by the USOIG and the Rock Island Housing Authority's efforts to comply with the audit's findings and HUD regulations.
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