The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 enforcement requirements of its Housing Voucher Cluster program.
Assistance Listing Number and Title: 14.871 – Section 8 Housing Choice
Vouchers
Federal Grantor Name: U.S. Department of Housing and
Urban Development
Federal Award/Contract Number: WA064
Pass-through Entity Name: N/A
Pass-through Award/Contract Number:
N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: N/A
Description of Condition
The Housing Authority spent $4,921,677 in 2023 under the Housing Voucher Cluster program, which includes the Section 8 Housing Choice Vouchers program (HCVP). The HCVP provides rental assistance to help low-income families afford decent, safe and sanitary rental housing through Housing Authority Payment (HAP) contracts.
Federal regulations require recipients to establish and maintain 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 least every two years to determine if they meet federal Housing Quality Standards (HQS) requirements. For units under HAP contracts that fail to meet HQS requirements, the Housing Authority must require owners to correct any cited life-threatening HQS deficiencies within 24 hours of notification of the failed inspection. Owners must correct cited non-life-threatening HQS deficiencies within 30 calendar days of notification of the failed inspection or within a specified Housing Authority-approved extension. If owners do not correct cited deficiencies within the specified correction period, the Housing Authority must stop assistance payments by the first of the month after the correction period ends or must terminate the HAP contract. The Housing Authority must keep documentation demonstrating compliance with HQS enforcement requirements.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s HQS enforcement requirements. Although the Housing Authority had procedures to require owners to correct non-life-threatening HQS deficiencies within 30 calendar days of notification of failed inspections, it did not always follow through with this requirement.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority provided housing inspection training to staff, those responsible for conducting the HQS inspections did not follow procedures for ensuring owners corrected non-life-threatening deficiencies within 30 days of notification of failed inspections. Additionally, during monitoring of the program, Housing Authority staff did not identify that they had not followed up with some owners who were cited for deficiencies to ensure they corrected them within 30 days of notification.
Effect of Condition
We tested all 23 failed inspections that occurred during 2023 and found three with cited non-life-threatening HQS deficiencies for which the Housing Authority did not have documentation demonstrating it followed up on the inspections and required the owners to correct the deficiencies within 30 days of notification. Because the Housing Authority did not follow up on HQS deficiencies within the required time frame, it cannot demonstrate that the housing units met HQS requirements.
Recommendation
We recommend the Housing Authority strengthen internal controls for ensuring it complies with HQS enforcement requirements. Specifically, the Housing Authority should follow up on cited non-life-threatening HQS deficiencies and require owners to correct them within 30 days of notification of the failed inspection, as HCVP requires.
Housing Authority’s Response
The HCV department will be creating an Excel spreadsheet for the inspector to complete and utilize to better manage compliance dates. It will include the failed inspection date, compliance due date, tenant and landlord names, passed date, abatement start date, and memos. In addition, the supervisor will be monitoring this spreadsheet and auditing inspection compliance more frequently.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the next audit.
Applicable Laws and Regulations
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.
Title 24 CFR Part 982, Section 8 Tenant-Based Assistance: Housing Choice Voucher Program, section 404, Maintenance: Owner and family responsibility; PHA remedies, establishes enforcement requirements for housing quality standards.
The Housing Authority had inadequate internal controls for ensuring compliance with the Housing Quality Standards inspection requirements of its Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 Project-Based Rental Assistance Program.
Assistance Listing Number and Title: 14.195 – Project-Based Rental Assistance (PBRA)
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 2022-002
Description of Condition
The Housing Authority spent $909,939 in 2023 under the Project-Based Rental Assistance 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 beginning of occupancy and at least annually to determine if the units 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 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
The Housing Authority adopted a new process for conducting all inspections for a given property during the same month. However, this process did not ensure that the Housing Authority consistently completed inspections for individual units within one year of the most recent inspections.
Effect of Condition
Using nonstatistical sampling, we tested 25 tenant files requiring housing unit inspections. Our testing found the Housing Authority inspected all 25 units in 2023, but did not complete 14 of these inspections within one year of the previous inspection, as the program requires. Without timely inspections, the Housing Authority cannot demonstrate that its housing units met HQS inspection requirements and that they were being consistently maintained in a decent, safe and sanitary manner.
Recommendation
We recommend the Housing Authority improve internal controls to ensure it complies with HQS inspection requirements.
Housing Authority’s Response
In 2023, CCWHA resumed its annual inspections of leased units, assigning a specific inspection month to each property. We acknowledge that, during this transition, certain units were not inspected within the expected annual timeline, as noted by the State Auditor's Office. This was primarily due to tenant refusals and necessary rescheduling.
To address this, CCWHA has implemented the following corrective measures:
1.Revised Inspection Schedule: We have adopted a new system to ensure that inspections are completed in the month preceding the assigned inspection month from the prior year.
2.Ongoing Staff Training: Housing Authority staff responsible for inspections will continue to receive regular training to emphasize the importance of timely, comprehensive assessments. This training reinforces the need for compliance with federal Housing Quality Standards (HQS) and the importance of maintaining accurate records.
We fully understand the importance of adhering to HQS requirements to ensure a safe and healthy living environment for our tenants. We are committed to continuously improving our inspection processes and appreciate the opportunity to address these concerns.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the 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 enforcement requirements of its Housing Voucher Cluster program.
Assistance Listing Number and Title: 14.871 – Section 8 Housing Choice
Vouchers
Federal Grantor Name: U.S. Department of Housing and
Urban Development
Federal Award/Contract Number: WA064
Pass-through Entity Name: N/A
Pass-through Award/Contract Number:
N/A
Known Questioned Cost Amount: $0
Prior Year Audit Finding: N/A
Description of Condition
The Housing Authority spent $4,921,677 in 2023 under the Housing Voucher Cluster program, which includes the Section 8 Housing Choice Vouchers program (HCVP). The HCVP provides rental assistance to help low-income families afford decent, safe and sanitary rental housing through Housing Authority Payment (HAP) contracts.
Federal regulations require recipients to establish and maintain 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 least every two years to determine if they meet federal Housing Quality Standards (HQS) requirements. For units under HAP contracts that fail to meet HQS requirements, the Housing Authority must require owners to correct any cited life-threatening HQS deficiencies within 24 hours of notification of the failed inspection. Owners must correct cited non-life-threatening HQS deficiencies within 30 calendar days of notification of the failed inspection or within a specified Housing Authority-approved extension. If owners do not correct cited deficiencies within the specified correction period, the Housing Authority must stop assistance payments by the first of the month after the correction period ends or must terminate the HAP contract. The Housing Authority must keep documentation demonstrating compliance with HQS enforcement requirements.
Our audit found the Housing Authority’s internal controls were ineffective for ensuring compliance with the program’s HQS enforcement requirements. Although the Housing Authority had procedures to require owners to correct non-life-threatening HQS deficiencies within 30 calendar days of notification of failed inspections, it did not always follow through with this requirement.
We consider this internal control deficiency to be a material weakness that led to material noncompliance.
Cause of Condition
Although the Housing Authority provided housing inspection training to staff, those responsible for conducting the HQS inspections did not follow procedures for ensuring owners corrected non-life-threatening deficiencies within 30 days of notification of failed inspections. Additionally, during monitoring of the program, Housing Authority staff did not identify that they had not followed up with some owners who were cited for deficiencies to ensure they corrected them within 30 days of notification.
Effect of Condition
We tested all 23 failed inspections that occurred during 2023 and found three with cited non-life-threatening HQS deficiencies for which the Housing Authority did not have documentation demonstrating it followed up on the inspections and required the owners to correct the deficiencies within 30 days of notification. Because the Housing Authority did not follow up on HQS deficiencies within the required time frame, it cannot demonstrate that the housing units met HQS requirements.
Recommendation
We recommend the Housing Authority strengthen internal controls for ensuring it complies with HQS enforcement requirements. Specifically, the Housing Authority should follow up on cited non-life-threatening HQS deficiencies and require owners to correct them within 30 days of notification of the failed inspection, as HCVP requires.
Housing Authority’s Response
The HCV department will be creating an Excel spreadsheet for the inspector to complete and utilize to better manage compliance dates. It will include the failed inspection date, compliance due date, tenant and landlord names, passed date, abatement start date, and memos. In addition, the supervisor will be monitoring this spreadsheet and auditing inspection compliance more frequently.
Auditor’s Remarks
We appreciate the Housing Authority's commitment to resolving the issues noted and will follow up during the next audit.
Applicable Laws and Regulations
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.
Title 24 CFR Part 982, Section 8 Tenant-Based Assistance: Housing Choice Voucher Program, section 404, Maintenance: Owner and family responsibility; PHA remedies, establishes enforcement requirements for housing quality standards.