HUD’s Office of Inspector General (OIG) issued an audit of HUD last week pertaining to awards of asset repositioning fees (ARF), the funds that public housing authorities (PHAs) may receive in connection with demolishing or disposing of public housing units in certain circumstances. The audit examined ARF awards to 14 PHAs and determined that 10 of those 14 PHAs were awarded inaccurate ARF amounts between 2008 and 2013. The OIG indicates the mistakes in ARF awards were largely due to arithmetic errors, unfamiliarity with the ARF calculation process by PHA and HUD field office staff, and the process by which ARF funding requests are made and verified.
Among its remedies, the audit recommends that HUD:
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Recaptures $6.2 million in operating subsidies awarded to 7 of the PHAs reviewed
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Reimburses 5 PHAs $1.5 million in ARF that was underfunded
The OIG conducted a similar audit of the predecessor to ARF, commonly called “phase-down subsidy” in 2006, which caused HUD to seek recoupment of many millions in subsidy that OIG alleged was improperly awarded.
