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MTW PHAs Have Higher Legal Costs than Other PHAs

HUD LogoHUD’s Office of the Inspector General (IG) reports that public housing agencies (PHAs) participating in the Moving to Work (MTW) demonstration have significantly higher costs for legal services than PHAs that are not part of the demonstration. The IG also asserts that HUD did not provide adequate oversight of the MTW agencies to ensure that their legal costs were reasonable and necessary.

From FY10 through FY15, 2,992 PHAs spent $590.7 million on legal costs, while 35 MTW agencies spent $131.3 million. MTW agencies accounted for 22% of the total legal costs, but represented just 1.2% of the PHAs. Of the 20 PHAs with the highest overall legal costs, nine were MTW agencies responsible for 47% of the total legal costs at the 20 PHAs. The average legal service cost per unit at MTW agencies was significantly higher than at comparable non-MTW PHAs:

  • $333 per unit at very large MTW PHAs, compared to $169 per unit at very large non-MTW PHAs
  • $251 per unit at large MTW PHAs, compared to $177 per unit at large non-MTW PHAs
  • $727 per unit at medium-sized MTW PHAs, compared to $151 per unit at medium-sized non-MTW PHAs

The IG audited three of the 39 PHAs currently participating in the MTW demonstration and found that records could not support at least $9.2 million of the $16.5 million the three spent for outside legal services between October 2007 and September 2012. The three MTW agencies audited by the IG were Chicago, District of Columbia, and Pittsburgh.

The IG report is at: