Audit 319655

Finding 2022-002 Housing Voucher Cluster – Special Tests – HQS Enforcement – Noncompliance and Significant Deficiency in Internal Controls Criteria: HUD requires that all units under the Housing Choice Vouchers Program meet specific Housing Quality Standards (HQS). In cases of failed inspections, timely re-inspections are mandatory, and if compliance is not achieved, abatement of Housing Assistance Payments (HAP) or voucher cancellation is required. Condition: During the audit, it was noted that in eight (8) instances, a unit that failed its HQS inspection did not undergo a subsequent re-inspection or no inspection was documented. Consequently, the required abatement of HAP or cancellation of the housing voucher was not executed. Cause: The non-compliance appears to stem from oversight or procedural lapses in the enforcement of HQS within the Housing Voucher Cluster program. This may be due to inadequate training, monitoring, or failure to adhere to established protocols. Effect or Potential Effect: This non-compliance undermines the integrity of the Housing Choice Vouchers Program and may lead to tenants living in substandard conditions. It also represents a risk of improper use of federal funds and can impact the credibility and effectiveness of the program. Questioned Costs: The exact monetary impact needs further investigation to determine the amount of HAP that should have been abated for the period of non-compliance. Context: This finding represents a potentially systemic issue within the Housing Voucher Cluster program, as it was identified in eight (8) files tested out of a sample of forty (40) cases. It highlights a need for more rigorous enforcement and monitoring of HQS compliance. Recommendations: Implement more stringent procedures for monitoring HQS compliance, including timely re-inspections and enforcement of HAP abatement or voucher cancellation. Enhance training for staff involved in the HQS process to ensure a thorough understanding of compliance requirements. Establish a system of regular audits to identify and rectify lapses in HQS enforcement promptly. Responsible Official's Response: The auditee acknowledges the deficiency in enforcing Housing Quality Standards (HQS) as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive corrective action plan.

Finding 2022-003 AL Number and Title: Various—Housing Voucher Cluster – Reporting – Noncompliance and Significant Deficiency Criteria: HUD regulations and federal requirements mandate timely submission of the Financial Assessment Subsystem for Public Housing Agencies (FASSPHA), the Data Collection Form (SF-SAC) for the Single Audit, and the Section Eight Management Assessment Program (SEMAP) reports. These submissions are critical for ensuring compliance, enabling oversight, and facilitating the allocation of federal funding. Condition: It was identified during the audit that the Authority did not meet the prescribed deadlines for submitting the FASSPHA, SF-SAC, and SEMAP reports to federal agencies. This delay in reporting has been noted for the first time in the 2021 audit findings. Cause: The failure to meet reporting deadlines can be attributed to a combination of factors, including major staff turnover, which led to a loss of institutional knowledge and expertise critical for the preparation and submission of these reports. Additionally, a change in auditor who had been instrumental in ensuring timely submissions in the past, with the new auditor becoming unreachable, further exacerbating the situation. These challenges were compounded by inefficiencies in the Authority’s internal processes for report preparation and submission. Effect or Potential Effect: The failure to submit these reports on time undermines the Authority's compliance with federal regulations, potentially affecting its eligibility for future funding and leading to reputational damage. It may also delay financial and operational decisions by HUD that depend on the analysis of these reports. Questioned Costs: None. Context: This lapse was identified against a backdrop of the Authority traditionally maintaining a good track record with reporting. The recent delays mark a departure from their usual compliance practices and have occurred amidst organizational changes and challenges, including staff turnover and procedural adjustments within the finance department. Recommendation: To mitigate this issue, it is recommended that the Authority: (1) Prioritize the recruitment and training of new staff to fill critical roles, ensuring they are well-versed in HUD reporting requirements; (2) Establish a contingency plan for maintaining continuity of operations in the event of key personnel turnover or unavailability; and (3) Revise and streamline internal reporting processes to improve efficiency and reliability in meeting HUD's reporting deadlines. Responsible Official's Response and Corrective Action Planned: Management acknowledges the audit findings and is committed to taking corrective actions.

Finding 2022-002 Housing Voucher Cluster – Special Tests – HQS Enforcement – Noncompliance and Significant Deficiency in Internal Controls Criteria: HUD requires that all units under the Housing Choice Vouchers Program meet specific Housing Quality Standards (HQS). In cases of failed inspections, timely re-inspections are mandatory, and if compliance is not achieved, abatement of Housing Assistance Payments (HAP) or voucher cancellation is required. Condition: During the audit, it was noted that in eight (8) instances, a unit that failed its HQS inspection did not undergo a subsequent re-inspection or no inspection was documented. Consequently, the required abatement of HAP or cancellation of the housing voucher was not executed. Cause: The non-compliance appears to stem from oversight or procedural lapses in the enforcement of HQS within the Housing Voucher Cluster program. This may be due to inadequate training, monitoring, or failure to adhere to established protocols. Effect or Potential Effect: This non-compliance undermines the integrity of the Housing Choice Vouchers Program and may lead to tenants living in substandard conditions. It also represents a risk of improper use of federal funds and can impact the credibility and effectiveness of the program. Questioned Costs: The exact monetary impact needs further investigation to determine the amount of HAP that should have been abated for the period of non-compliance. Context: This finding represents a potentially systemic issue within the Housing Voucher Cluster program, as it was identified in eight (8) files tested out of a sample of forty (40) cases. It highlights a need for more rigorous enforcement and monitoring of HQS compliance. Recommendations: Implement more stringent procedures for monitoring HQS compliance, including timely re-inspections and enforcement of HAP abatement or voucher cancellation. Enhance training for staff involved in the HQS process to ensure a thorough understanding of compliance requirements. Establish a system of regular audits to identify and rectify lapses in HQS enforcement promptly. Responsible Official's Response: The auditee acknowledges the deficiency in enforcing Housing Quality Standards (HQS) as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive corrective action plan.

Finding 2022-003 AL Number and Title: Various—Housing Voucher Cluster – Reporting – Noncompliance and Significant Deficiency Criteria: HUD regulations and federal requirements mandate timely submission of the Financial Assessment Subsystem for Public Housing Agencies (FASSPHA), the Data Collection Form (SF-SAC) for the Single Audit, and the Section Eight Management Assessment Program (SEMAP) reports. These submissions are critical for ensuring compliance, enabling oversight, and facilitating the allocation of federal funding. Condition: It was identified during the audit that the Authority did not meet the prescribed deadlines for submitting the FASSPHA, SF-SAC, and SEMAP reports to federal agencies. This delay in reporting has been noted for the first time in the 2021 audit findings. Cause: The failure to meet reporting deadlines can be attributed to a combination of factors, including major staff turnover, which led to a loss of institutional knowledge and expertise critical for the preparation and submission of these reports. Additionally, a change in auditor who had been instrumental in ensuring timely submissions in the past, with the new auditor becoming unreachable, further exacerbating the situation. These challenges were compounded by inefficiencies in the Authority’s internal processes for report preparation and submission. Effect or Potential Effect: The failure to submit these reports on time undermines the Authority's compliance with federal regulations, potentially affecting its eligibility for future funding and leading to reputational damage. It may also delay financial and operational decisions by HUD that depend on the analysis of these reports. Questioned Costs: None. Context: This lapse was identified against a backdrop of the Authority traditionally maintaining a good track record with reporting. The recent delays mark a departure from their usual compliance practices and have occurred amidst organizational changes and challenges, including staff turnover and procedural adjustments within the finance department. Recommendation: To mitigate this issue, it is recommended that the Authority: (1) Prioritize the recruitment and training of new staff to fill critical roles, ensuring they are well-versed in HUD reporting requirements; (2) Establish a contingency plan for maintaining continuity of operations in the event of key personnel turnover or unavailability; and (3) Revise and streamline internal reporting processes to improve efficiency and reliability in meeting HUD's reporting deadlines. Responsible Official's Response and Corrective Action Planned: Management acknowledges the audit findings and is committed to taking corrective actions.