New York City Department of Housing Preservation and Development, New York, NY, Did Not Always Ensure That Units Met Housing Quality Standards but Generally Abated Payments When Required

We audited the New York City Department of Housing Preservation and Development’s (HPD) Housing Choice Voucher Program. We selected HPD for review based on its size and because we had not conducted an audit of its Housing Choice Voucher Program. The objective of the audit was to determine whether HPD ensured that its program units met HUD’s housing quality standards and whether it abated housing assistance payments when required. HPD did not always ensure that its program units met housing quality standards and its quality control inspections met sample requirements, but it generally abated housing assistance payments when required. Of the 58 sample units inspected, 52 units had housing quality standards violations. While each of the 52 units had at least 1 violation, only 6 of the units materially failed to meet HUD’s standards. In addition, although HPD generally abated the correct amount of payments, we identified several areas in which it could improve its controls. These conditions occurred because HPD did not always thoroughly conduct inspections and used an inspection order form that did not identify the key aspects of housing quality standards performance; included non-program units in its quality control sample and conducted quality control inspections concurrently with unit inspections; and did not have adequate controls over abatements and inspection documentation. As a result, HPD disbursed $26,044 in housing assistance payments and received approximately $2,259 in administrative fees for units that materially failed to meet HUD’s housing quality standards. Further, HUD did not have assurance that HPD’s quality control process was fully effective and that it consistently carried out the abatement process, including maintaining records that were accurate and complete. By improving its inspection process, HPD could better ensure that $760,363 in future program funds is spent on units that meet HUD’s housing quality standards. We recommend that HUD require HPD to (1) certify, along with the owners of the 52 units cited in the finding, that the applicable housing quality standards violations have been corrected; (2) reimburse its program from non-Federal funds $28,303 for the 6 units that materially failed to meet standards; (3) improve controls over its inspection process to ensure that units meet housing quality standards and that the results are used to enhance the effectiveness of its inspections; and (4) improve controls over its quality control sampling process and its abatement process.