Audit 368256

Finding 2023-002 - Section 8 HQS Inspection Deficiencies, Significant Deficiency Section 8 Housing Choice Voucher Program - ALN No. 14.871; Grant period - year ended December 31, 2024 Criteria: The Code of Federal Regulations and HUD guidelines give the requirements for annual inspections to determine if the units leased to families meet the Housing Quality Standards. Specifically, HUD regulations CFR Parts 982.158 and 982.404 require inspections of units under HAP contract that fail to meet HQS. The PHA 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 PHA-approved extension. Condition: HQS inspections were tested for compliance in the current year. Of the 14 failed HQS inspections selected for review, 7 units were not re-inspected with the 30-day requirement and HAP payments were not properly abated. Cause: Lack of controls over compliance with HUD regulations and turnover of staff. Effect: Non-compliance with HUD regulations. Questioned Costs: Not identified Recommendation: We recommend that the Authority should continue to strengthen its internal controls in relation to the HQS inspection and re-inspection process to ensure that they are completed within the required timeframe to meet the HUD compliance requirements. Management's Response: The Authority is continuing to work on the procedures for failed inspections to ensure that the re- inspections are performed within the 30-day requirement. The Authority is also planning on additional training for employees to make sure they are qualified to meet the HQS re-inspection requirements. Patricia Logan, Executive Director, has assumed the responsibility of ensuring that the inspections will be performed within the timeframe to meet the HUD compliance requirements and expects the deficiencies which led to this finding to be resolved by December 31, 2025.

Finding 2024-003 - Section 8 VMS Reporting Deficiency (Material Weakness, Material Non-Compliance) Section 8 Housing Choice Voucher Program - ALN No. 14.871; Grant period - year ended December 31, 2024 Criteria: Per Notice PIH 2021-08, the Department uses VMS data for budget formulation, cash management, monitoring, determining renewal funding levels, and funding-related factors under the Section Eight Management Assessment Program (SEMAP). Therefore, it is imperative that Housing Authorities comply with reporting requirements and timelines for reporting through VMS, ensuring that the information submitted is both timely and accurate. The data submitted in VMS is subject to verification and review by the PIH OHVP, Quality Assurance Division. Condition: Efforts to accurately validate Housing Authority-reported UMLs, HAP and VMS fields were unsuccessful. In total the QAD reviewer was unable to validate 19,552 UMLs and $12,318,698 in HAP expenses. Cause: The Housing Authority is currently utilizing a modifying accounting method which includes Lindsey generated reports and the agency’s general ledger. In reviewing this data, the QAD reviewer discovered several coding issues throughout the entire review period in the Housing Authority’s software generated detail reports. As a result, the Housing Authority’s reports were insufficient to establish an audit trail to validate Unit Month Leased and Housing Assistance Payments reported in VMS. In cases where the system generated VMS data cannot be relied upon, QAD will typically rely on the general ledger to validate on a cash basis rather than an accrual basis. However, the general ledger could not be relied upon due to not containing tenant level details to support HAP payments. Effect: The information reported in VMS was not supported and could not be validated. Failure to report HAP data in the month incurred could adversely impact HCV renewal funding. Questioned Costs: Not identified. Recommendation: We recommend that the Housing Authority should work with its software provider to ensure it is utilizing the VMS reporting options fully and make sure that adequate records are kept. Supporting documentation should be retained for all adjustments and prior-month corrections. Management's Response: The Housing Authority is continuing to work with its software provider to ensure that VMS reporting software is being fully and correctly utilized. The Housing Authority is also developing standard operating procedures to verify that VMS reporting is accurate and properly supported. The Housing Authority is also planning on additional training for HCV employees in VMS reporting guidelines and date input. Patricia Logan, Executive Director, has assumed the responsibility of ensuring that accurate and supported VMS reports will be reported and expects the deficiencies which led to this finding to be resolved by December 31, 2025.