FAC Explorer

Audit 350735

FY End
2024-06-30
Total Expended
$299.61M
Findings
24
Programs
8
Organization: South Carolina State Housing Finance and Development Authority (SC)
Year: 2024 Accepted: 2025-03-31
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
541812 2024-002 Material Weakness Yes N
541813 2024-002 Material Weakness Yes N
541814 2024-002 Material Weakness Yes N
541815 2024-003 Material Weakness Yes N
541816 2024-003 Material Weakness Yes N
541817 2024-003 Material Weakness Yes N
541818 2024-004 Significant Deficiency Yes E
541819 2024-004 Significant Deficiency Yes E
541820 2024-004 Significant Deficiency Yes E
541821 2024-005 Significant Deficiency Yes N
541822 2024-005 Significant Deficiency Yes N
541823 2024-005 Significant Deficiency Yes N
1118254 2024-002 Material Weakness Yes N
1118255 2024-002 Material Weakness Yes N
1118256 2024-002 Material Weakness Yes N
1118257 2024-003 Material Weakness Yes N
1118258 2024-003 Material Weakness Yes N
1118259 2024-003 Material Weakness Yes N
1118260 2024-004 Significant Deficiency Yes E
1118261 2024-004 Significant Deficiency Yes E
1118262 2024-004 Significant Deficiency Yes E
1118263 2024-005 Significant Deficiency Yes N
1118264 2024-005 Significant Deficiency Yes N
1118265 2024-005 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
14.195 Project-Based Rental Assistance (pbra) $164.29M Yes 0
14.239 Home Investment Partnerships Program $93.81M Yes 0
14.275 Housing Trust Fund $8.84M - 0
21.023 Emergency Rental Assistance Program $6.50M Yes 0
21.026 Homeowner Assistance Fund $4.56M - 0
14.871 Section 8 Housing Choice Vouchers $2.90M Yes 4
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $981,190 - 0
14.879 Mainstream Vouchers $450,646 Yes 4

Contacts

Name Title Type
MP82AN8JP477 Flora Wingard Auditee
8038964210 Justin Measley Auditor
No contacts on file

Notes to SEFA

Title: LOAN PROGRAMS Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the South Carolina State Housing Finance and Development Authority under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the South Carolina State Housing Finance and Development Authority, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the South Carolina State Housing Finance and Development Authority. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The South Carolina State Housing Finance and Development Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Total expenditures for the HOME Investment Partnership Program for the fiscal year ended June 30, 2024 include $5,238,322 of awards expended for loans that are recorded as Loans Receivable in the Statement of Net Position and $8,860,708 of amounts included in Housing Assistance Payments and Grant Awards Disbursed on the Statement of Revenues, Expenses and Changes in Fund Net Position. The total balance of loans for which the federal government has continuing compliance requirements is $83,219,905 as of June 30, 2024. Total expenditures for the National Housing Trust Fund for the fiscal year ended June 30, 2024 include $8,137,327 of amounts included in Housing Assistance Payments and Grant Awards Disbursed on the Statement of Revenues, Expenses and Changes in Fund Net Position. The total balance of loans for which the federal government has continuing compliance requirements is $669,249 as of June 30, 2024.

Finding Details

Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – HQS Enforcement Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: $966 Context: Exceptions were noted in 8 out of 60 failed inspections: • In 7 instances, the Authority did not reinspect the unit within the required timeframe. • In 2 instances, the Authority did not abate the unit for the required timeframe. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: Yes, see finding 2023-003. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher ClusterAssistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available:(i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR section 982.516) Condition: The Authority did maintain support for the income used in a tenant’s recertification. Questioned costs: $461 Context: Exceptions were noted in 5 out of 60 tenant files: • The Authority was unable to support the income calculations in 2 files. • The Authority was unable to support the expense calculations in 3 files. Cause: The Authority did not maintain the proper support for the eligibility determination. Effect: The Authority is not in compliance with eligibility requirements. Repeat Finding: Yes, see finding 2023-008. Recommendation: We recommend the Authority implements controls to ensure that tenant files contain all required documentation. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-005
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions - Rolling Forward Equity Balances Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: PHAs are required to maintain complete and accurate accounts. In addition, the ACC requires PHA to properly account for program activity. Proper accounting requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll-forward of equity, and (3) errors are corrected as detected (24 CFR section 982.158). Condition: The Authority did not properly reconcile HAP and administrative equity in the prior fiscal year and processed a prior period adjustment to transfer the erroneous equity out of the program during the current fiscal year. Questioned costs: Known questioned costs of $209,512 calculated based on the program prior period adjustment. Context: The equity roll forward identified the program’s equity included an erroneous transfer in the prior year and required a prior period adjustment to correct. Cause: The Authority did not accurately reconcile program equity. Effect: The Authority is not in compliance with Housing Choice Voucher equity roll forward requirements. Repeat Finding: Yes, see finding 2023-010. Recommendation: We recommend the Authority review the equity roll forward of programs to identify and correct errors in the correct reporting period. Views of responsible officials: There is no disagreement with the audit finding.