The Department of Housing and Urban Development’s (HUD) oversight processes should focus more on identifying potential inappropriate use of mismanagement of public housing funds, according to a new report by the Government Accountability Office (GAO).

The GAO analyzed financial data on about 3,300 housing agencies and found that many housing agencies showed signs of being at risk of misusing public housing funds, said the report.

The GAO found that from 2002 to 2006, 200 housing agencies had written checks for more than the funds available in their bank accounts on average of $25,000 or more. However, 75 percent of these agencies received passing Public Housing Assessment System scores.

“Such overdrafts raise questions about these agencies’ cash management,” said the report. “But HUD does not use these and similar measures to identify housing agencies at greater risk of inappropriately using or mismanaging public housing funds.”

The report made two recommendations for HUD:

  • Regularly summarize and systematically evaluate the results of Office of Inspector General and single audits of public housing agencies to allow program managers to identify and understand problems of potential inappropriate use and mismanagement of public housing funds, identify emerging issues, evaluate overall monitoring and oversight processes.
  • Develop mechanisms—such as financial indicators—to identify housing agencies that are at greater risk of inappropriately using or mismanaging public housing funds. Such mechanisms may be developed based on the development’s evaluation of commonly occurring and emerging issues identified in audits of housing agencies and developed by leveraging financial information that the department collects. Once the indicators are developed, the department should use them as part of its ongoing monitoring and review.

The report, HUD’s Oversight of Housing Agencies Should Focus More on Inappropriate Use of Program Funds, can be found at