2024 – 001 – HQS Enforcement and Annual HQS Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: GA007; 2024 Award Period: January 1, 2024 to December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: For 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments 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 PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). In addition, all HCV units are required to be inspected annually. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted as summarized below: Number of Instances Finding 4 Units were not properly abated. 1 Annual inspection was not completed. 5 Repairs were not completed within the required correction period of 24 hours for life threatening deficiencies. Questioned costs: $5,952 Context: Of the 60 files tested, 10 files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations. Effect: The Authority is not in compliance with federal regulations regarding Housing Quality Standards and Quality Control requirements. Repeat Finding: Yes, see prior year finding 2023-002. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month, to determine if the tenant files were prepared in accordance with internal policies and until the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002 - Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: GA007; 2024 Award Period: January 1, 2024, to December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted as summarized below: Number of Instances Finding 2 Income was incorrectly reported. 2 Expenses were incorrectly reported. 1 Contract rent was incorrectly reported. Questioned costs: $3,705 Context: Of the 40 files tested, 5 files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations. Effect: The Authority is not in compliance with federal regulations regarding the verification and reporting of the tenant’s income and expenses which can lead to overpayments or underpayments to landlords due to incorrect calculation of eligibility and rent amounts. Repeat Finding: No Recommendation: We recommend that the Authority review its quality control processes to ensure compliance with HUD rules and regulations. Also, we recommend that the Authority hold training for those involved in the eligibility process to ensure that the income and expenses reported on the HUD-50058 is supported with proper calculations. Views of responsible officials: There is no disagreement with the audit finding.