The oversight of affordable housing in Pennsylvania faces new challenges following a performance audit released by Auditor General Timothy L. DeFoor. The audit, which scrutinized activities from July 1, 2022, through September 30, 2024, highlighted significant inconsistencies in record-keeping within the Pennsylvania Housing Finance Agency (PHFA) and provided 24 recommendations aimed at enhancing the program’s operations.
The report specifically focused on the PennHOMES program, which offers interest-free, deferred-payment loans to developers creating rental housing for low-income residents. While the audit found no issues with the application review process for developers seeking funding, it revealed that PHFA failed to retain essential decision-making documents consistently. Furthermore, the agency displayed uneven record-keeping practices regarding the monitoring of properties financed through the program.
DeFoor emphasized the importance of effective record-keeping, stating, “This audit is another example of why efficient and effective recordkeeping is essential when spending public funds.” He noted that while the application process for PennHOMES was sound, the lack of crucial documentation raised concerns about the agency’s operational integrity.
The audit had two main objectives: to determine compliance with laws and regulations during the review and funding processes, and to assess whether PHFA effectively monitored PennHOMES-funded housing to enforce rent restrictions and income eligibility. The findings led to two formal conclusions and a series of recommendations aimed at strengthening internal controls and monitoring procedures.
In response to the audit, PHFA officials announced they are in the process of implementing a new data system, which DeFoor expressed hope would address the identified deficiencies. “This is a system that can be improved,” he remarked. “We look forward to seeing these recommendations implemented and the improvements in action when we revisit this audit in the future.”
The funding for the PennHOMES program is drawn from PHFA’s unrestricted reserves and the federal HOME Investment Partnerships Program. The audit reviewed application cycles for 2022 and 2024, noting that there was no application cycle in 2023. As a state-affiliated agency, PHFA plays a crucial role in financing housing for low- and moderate-income families, older adults, and individuals with special housing needs.
For those interested in the audit’s detailed findings and recommendations, a full report is available at www.paauditor.gov/audits/. Additionally, the Department of the Auditor General maintains a “Be Audit Smart” section at www.PaAuditor.gov, which allows residents to review recent audits and track the examination of public funds throughout Pennsylvania.
