The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Section 8 Housing Assistance Payments Program
Assistance Listing Number and Title: 14.195 - Section 8 Housing Assistance Payments Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Federal Award/Contract Number: WA19R000018
WA190038002
WA19M000050
WA190015002
Pass-through Entity Name: N/A
Pass-through Award/Contract Number: N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Description of Condition
The Housing Authority spent $841,337 in 2022 under the Section 8 Housing Assistance Payments Program, which provides rental assistance to help low-income families afford decent, safe and sanitary rental housing.
Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls.
The Housing Authority must inspect units leased to families at the time of initial occupancy and at least annually to determine if they meet federal Housing Quality Standards (HQS), as well as maintain inspection documentation to demonstrate compliance.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s inspection requirements. The Housing Authority has established procedures for identifying units requiring inspections. However, the procedures did not ensure the Housing Authority completed annual inspections as required.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority has established procedures for identifying units requiring inspections, the inspections done in 2022 were not completed within
12 months of the most recent inspections, due to no inspections being performed in 2021. In addition, the Housing Authority experienced a staff shortage during this time, requiring larger workloads, including covering other properties they would not have had to during ideal staffing levels.
Effect of Condition
Using nonstatistical sampling, we tested 26 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected 24 of the 26 units in 2022, but none of them were performed within one year of the previous inspection, as the program requires. The Housing Authority did not inspect the remaining two units. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority strengthen internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
For 2022, CCWHA resumed annual inspections of leased units assigning an inspection month to each property. We acknowledge that in this transition some units, due to tenant refusal and rescheduling were not inspected within the annual timeline as understood by the State Auditor’s Office. CCWHA has taken the following actions;
1) Timely Inspections: We have reviewed and revised our inspection scheduling procedures to ensure timely inspections for all leased units. This includes implementing a system to track and manage inspection deadlines and notifying tenants in advance to facilitate the process.
2) Documentation Enhancement: Our documentation procedures have been enhanced to maintain a comprehensive record of all inspections. This includes creating a centralized database to store digital inspection reports, dates, and any necessary follow-up actions, ensuring that we can readily demonstrate compliance with HQS requirements.
3) Staff Training: Housing Authority staff responsible for conducting inspections have undergone additional training to reinforce the importance of timely and thorough assessments. This training emphasizes the significance of complying with federal HQS standards and maintaining accurate records.
4) Quality Assurance Reviews: We have established a quality assurance review process to periodically assess our inspection procedures. This will involve internal reviews and, where appropriate, seeking external input to ensure the effectiveness and accuracy of our inspection processes.
We understand the critical nature of complying with HQS requirements to maintain a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes.
We appreciate the opportunity to address these concerns, and we remain dedicated to providing quality housing for our community members.
Should you require any further information or wish to discuss the implemented corrective actions in more detail, please feel free to contact Joanna Tepley joannat@ccwha.com.
Auditor’s Remarks
We appreciate the steps the Authority is taking to resolve this issue. We will review the condition during our next audit.
Applicable Laws and Regulations
Title 24 CFR Part 884, Section 8 Housing Assistance Payments Program for New Construction, section 217, Maintenance, operations, and inspections establishes requirements to conduct periodic inspections to determine if the owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
HUD Handbook 4350.3 Occupancy Requirements of Subsidized Multifamily Housing Programs, November 2013, 6-29 Unit Inspections, requires that owners perform unit inspections on at least an annual basis to determine whether appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced.
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.