The City of Chicago Office of Inspector General (OIG) has completed a follow-up to its audit of the Chicago Low-Income Housing Trust Fund’s management of housing quality inspections for units participating in the Rental Subsidy Program (RSP). Based on the Trust Fund’s responses, OIG concludes that the Trust Fund has fully implemented 3 of 14 corrective actions related to the audit findings, substantially implemented 2, partially implemented 6, and not implemented 3 of the recommendations that would help the Trust Fund meet its mission of providing “secure, safe, and sound” housing to RSP properties.
OIG’s 2019 audit determined that the Trust Fund subsidized properties with Chicago Building Code violations and other serious housing quality deficiencies; had a payment system that inadequately protected against potential fraud and errors; and paid properties with incomplete contract documentation. Additionally, errors in the Trust Fund’s internal management tool caused it to publish inaccurate and incomplete quarterly reports from 2014 through 2018, and prevented accurate accountings of the amount of funding it allotted to RSP properties in those years.
OIG made several suggestions to strengthen the Trust Fund’s processes, which included: developing a contracting, inspection, and payment process to ensure that it only subsidizes well-maintained housing for low-income Chicagoans; developing a software system that monitors properties’ inspection compliance status; and incorporating controls for quarterly payments to reduce or remove the opportunity for fraud and errors. In its response to the audit, the Trust Fund described corrective actions it would take.
Based on the follow-up response, OIG concludes that the Trust Fund has begun implementing an electronic portal, Trust Fund Central, which integrates its contract management and subsidy request systems. The Trust Fund also audited the payment ledgers of all active program participants going back to 2016; resumed in-person inspections in April 2021; and uses the Chicago Data Portal to verify Chicago Building Code compliance. However, the Trust Fund has not fully implemented recommendations to integrate its payment and inspections systems, has not strictly enforced deadlines for contract renewals, and has not completely made the switch from a manually updated spreadsheet to an automated one.
“The Chicago Low-Income Housing Trust Fund’s Rental Subsidy Program was created with the purpose of assisting extremely low-income residents––as well as veterans, female-headed households, and people experiencing homelessness––with affordable and adequate housing. Compliance with codes, standards, documentation, and payments is critical to ensuring that the Trust Fund’s operations match its equity-oriented program objectives by only subsidizing well-maintained, safe properties for its societally vulnerable and marginalized beneficiaries,” said Inspector General Joe Ferguson. “We urge the Trust Fund to continue its progress towards fully implementing OIG’s recommendations.”
