FAC Explorer

Audit 311041

FY End
2023-09-30
Total Expended
$416.94M
Findings
10
Programs
5
Organization: Housing Authority of the City and County of San Francisco (CA)
Year: 2023 Accepted: 2024-06-28
Auditor: MacIas Gini & O'Connell LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
404439 2023-002 Material Weakness Yes N
404440 2023-002 Material Weakness Yes N
404441 2023-002 Material Weakness Yes N
404442 2023-003 Significant Deficiency - N
404443 2023-003 Significant Deficiency - N
980881 2023-002 Material Weakness Yes N
980882 2023-002 Material Weakness Yes N
980883 2023-002 Material Weakness Yes N
980884 2023-003 Significant Deficiency - N
980885 2023-003 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $14.98M Yes 2
14.879 Mainstream Vouchers $6.04M Yes 1
14.850 Public and Indian Housing $5.46M Yes 0
14.872 Public Housing Capital Fund $1.82M - 0
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $1.02M - 0

Contacts

Name Title Type
SZEGXHQ2K1W3 Mamadiu Gning Auditee
4157155200 Benjamin Lau Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – GENERAL Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agency’s (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authority’s basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10% de minimus cost rate as covered in Title 2 CFR §200.414 Indirect (F&A) costs. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of the Housing Authority of the City and County of San Francisco, California (Authority). The Authority’s reporting entity is defined in Note 1 of the Authority’s basic financial statements. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Federal programs are listed by their Assistance Listing Numbers (ALN).
Title: NOTE 2 – BASIS OF PRESENTATION Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agency’s (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authority’s basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10% de minimus cost rate as covered in Title 2 CFR §200.414 Indirect (F&A) costs. In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agency’s (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authority’s basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. The Authority did not elect to use the 10% de minimus cost rate as covered in Title 2 CFR §200.414 Indirect (F&A) costs. As a result of the COVID-19 pandemic, many new federal programs have been established and funding has been added to existing federal programs. Expenditures funded from the following acts are denoted by the prefix COVID-19 in the federal program title in the Schedule (as applicable): • Coronavirus Preparedness and Response Supplemental Appropriations Act • Families First Coronavirus Response Act • Coronavirus Aid, Relief, and Economic Security Act (CARES Act) • Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) • American Rescue Plan Act (ARP)
Title: NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agency’s (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authority’s basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Authority did not elect to use the 10% de minimus cost rate as covered in Title 2 CFR §200.414 Indirect (F&A) costs. The Schedule agrees to or can be reconciled with the amounts reported in the Authority’s basic financial statements.

Finding Details

Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-003
Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-003
Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-002
Finding Reference: 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority was required to resume biennial inspections by December 31, 2021. The Authority was required to conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and was required to conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,410 tenants for the fiscal year ended September 30, 2023, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants, and identified fifteen tenants whose HQS inspections were completed past the due dates and seven tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority’s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $179,377 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 60 participants that totaled $1,550,585 in HAPs to the total HAPs of $385,748,113 for the year, results in likely questioned costs of $44,624,677. Identification of Repeat Finding This is a repeat of finding 2022-003 reported for the year ended September 30, 2022. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-003
Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding 2023-003
Finding Reference: 2023-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Housing Choice Vouchers Federal Catalog Number: 14.871 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions - HQS Enforcement Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.404(a)(3), the Authority must not make any housing assistance payments (HAP) for a dwelling unit that fails to meet the housing quality standard (HQS), unless the owner corrects the defect within the period specified by the Authority and the Authority verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Furthermore, 24 CFR 982.404(b)(2) states that if an HQS breach caused by the family is life threatening, the family must correct the defect within no more than 24 hours. For other family-caused defects, the family must correct the defect within no more than 30 calendar days (or any PHA-approved extension). Condition Of the total of 3,515 tenants with failed inspections during the fiscal year, we identified three cases in a statistically valid sample of 60 failed inspections in which the Authority did not perform follow-up inspections within the required timeframe to verify identified defects were corrected and/or did not abate HAPs for defects that were not corrected within the required timeframe. Cause of Condition The Authority does not have adequate controls in place to ensure that the HQS are being enforced or completed in a timely manner and that HAPs are being properly withheld. Effect The Authority is not in compliance with the HQS enforcement requirements, which may result in tenants living in unsafe housing units. In addition, the Authority may be paying HAPs to property owners whose units have inadequate housing quality and may be incorrectly withholding HAPs to landlords who have properly corrected the deficiencies within the required timeframe. Questioned Costs Known questioned costs totaled $10,770, which represents HAPs made for months in which the required follow-up inspections were not performed or HAPs were not abated after failed re-inspections. Identification of Repeat Finding This is not a repeat finding in the immediate prior audit period. Recommendation The Authority should continue to develop procedures and strengthen its internal controls related to HQS enforcement. The Authority should also regularly review the list of failed inspections to verify that units with failed HQS inspections have the housing assistance payments properly withheld and that property owners whose units passed re-inspection are properly paid. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.