The City of Chicago Office of Inspector General (OIG) has completed an audit of the Chicago Low-Income Housing Trust Fund’s (the “Trust Fund”) management of housing quality inspections for units participating in the Rental Subsidy Program (RSP), which finds that the Trust Fund did not ensure all RSP properties met its standards for safe, sound, and secure housing. The audit found that the Trust Fund subsidized properties with Chicago Building Code violations and other serious housing quality deficiencies including non-working smoke and carbon monoxide detectors and dangerous porches. Based on sample analysis, we estimate that approximately 61.4% of RSP properties subsidized by the Trust Fund had unresolved Chicago Building Code violations at the end of 2017. Additionally, the Trust Fund had a payment system that inadequately protected against potential fraud and errors, and paid properties with incomplete contract documentation. The Trust Fund also published incorrect reports from 2014 through 2018, and could not accurately gauge the amount of funds allocated to RSP properties.
OIG made several recommendations to improve the Trust Fund’s operations. These include,
- implement a software system that monitors properties’ inspection compliance status;
- assess properties’ compliance with the Chicago Building Code every quarter before it pays property owners; and
- ensure reports accurately reflect the full distribution of active subsidies across the City and the amount of available funding.
The Trust Fund agreed with our recommendations and stated that it was working with its inspection contractor to merge its inspection, document submission, and payment systems to allow for real-time inspection updates and improved reporting on funding, inspection status, unoccupied units, and units with emergency deficiencies. Additionally, the Trust Fund is updating its property spreadsheet to reflect accurate property records.
“The Trust Fund is a City-funded nonprofit that subsidizes landlords who rent to extremely low-income individuals and families. The City should not pay landlords who fail to provide the economically vulnerable with safe, clean, and secure homes as the law requires. And the taxpayers should be able to rely on the Trust Fund to accurately report on its property inventory and funding allocations,” said Inspector General Joe Ferguson. “OIG is encouraged that the Trust Fund has committed and is working to improve its inspection and payment systems to promote greater accuracy and accountability, and to ensure the City does not subsidize unsafe properties.”
The full report can be found online at OIG’s website: bit.ly/LowIncomeHousingTrustFund
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The mission of the independent and non-partisan City of Chicago Office of Inspector General (OIG) is to promote economy, effectiveness, efficiency, and integrity by identifying corruption, waste, and mismanagement in City government. OIG is a watchdog for the taxpayers of the City and has jurisdiction to conduct investigations and audits into most aspects of City government. If you see corruption, fraud, or waste of any kind, we need to hear from you. For more information, visit our website at: www.igchicago.org.