FAC Explorer

Audit 370719

FY End
2025-03-31
Total Expended
$13.32M
Findings
2
Programs
6
Organization: Kingsport Housing and Redevelopment Authority (TN)
Year: 2025 Accepted: 2025-10-13
Auditor: Smith Marion & CO

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1160346 2025-001 Material Weakness Yes N
1160347 2025-002 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $11.04M Yes 2
14.231 Emergency Solutions Grant Program $907,593 Yes 0
14.267 Continuum of Care Program $704,364 Yes 0
14.241 Housing Opportunities for Persons with Aids $440,087 Yes 0
14.896 Family Self-Sufficiency Program $128,893 Yes 0
14.872 Public Housing Capital Fund $99,581 Yes 0

Contacts

Name Title Type
TB7HXYMMV9F8 Bytha Kilgore Auditee
4234083837 Chad Porter Auditor
No contacts on file

Notes to SEFA

The accompanying schedule presents the expenditures incurred (and related awards received) by the Kingsport Housing and Redevelopment Authority (the Authority) (the Authority) that are reimbursable under federal programs of federal agencies providing financial assistance awards. For the purpose of this schedule, only the portion of the program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. This schedule also only includes the amounts expended by the Authority, none of the amount expended, if any, by the blend or discretely present component units have been included.
The expenditures included in the accompanying schedule were reported on the accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. The information in this schedule is presented in accordance with the requirements of Uniform Guidance, Audit of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements.
The Authority elected not to use the 10% de minimis indirect cost rate as allowed in the Uniform Guidance, Section 414.

Finding Details

Finding 2025-001
HQS Enforcement The exact monetary impact needs further investigation to determine the amount of HAP that should have been abated for the period of non-compliance. HUD requires that all units under the Housing Choice Vouchers Program meet specific Housing Quality Standards (HQS). In cases of failed inspections, timely re-inspections are mandatory, and if compliance is not achieved, abatement of Housing Assistance Payments (HAP) or voucher cancellation is required. During the audit, it was noted that in seven (7) instances, a unit that failed its HQS inspection did not undergo a subsequent re-inspection or no inspection was documented. Consequently, the required abatement of HAP or cancellation of the housing voucher was not executed. This finding represents a potentially systemic issue within the Housing Voucher Cluster program, as it was identified in seven (7) files tested out of a sample of eight (8) cases. It highlights a need for more rigorous enforcement and monitoring of HQS compliance. The non-compliance appears to stem from oversight or procedural lapses in the enforcement of HQS within the Housing Voucher Cluster program. This may be due to inadequate training, monitoring, or failure to adhere to established protocols. This non-compliance undermines the integrity of the Housing Choice Vouchers Program and may lead to tenants living in substandard conditions. It also represents a risk of improper use of federal funds and can impact the credibility and effectiveness of the program. Implement more stringent procedures for monitoring HQS compliance, including timely reinspection and enforcement of HAP abatement or voucher cancellation. Enhance training for staff involved in the HQS process to ensure a thorough understanding of compliance requirements. Establish a system of regular audits to identify and rectify lapses in HQS enforcement promptly. The auditee acknowledges the deficiency in enforcing Housing Quality Standards (HQS) as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive Corrective Action Plan.
Finding 2025-002
Utilities Allowance Calcuation None "In accordance with the 2014 Appropriations Act Section 242, the utility allowance for a family shall be the lower of: (1) The utility allowance amount for the family unit size; or (2) the utility allowance amount for the unit size of the unit rented by the family. However, upon the request of a family that includes a person with disabilities, the PHA must approve a utility allowance higher than the applicable amount if such a higher utility allowance is needed as a reasonable accommodation in accordance with HUD's regulations in 24 CFR part 8 to make the program accessible to and usable by the family member with a disability. This provision applies only to vouchers issued after the effective date of this notice (June 12, 2014) and to current program participants. For current program participants, a PHA must implement the new allowance at the family's next annual reexamination, provided that the PHA is able to provide a family with at least 60 days' notice prior to the reexamination. " During the audit, we noted multiple HUD Forms 50058 had utility allowances calculated not in accordance with the above criteria. The Authority had approximately 230 new admissions during the fiscal year. Of these we reviewed 24 individual utility allowances which were calculate for the tenants and found 3 instances of non-compliance. Software conversion in prior year has several tenant units marked as manufactored home however the tenant is living in a unit that is not a manufactured home. The Authority staff did not correct the unit type and thereby the utility allowance was incorrectly caculated. The Authority was in violation of the Federal Regulation which resulted in errors in calculating housing assistance payments (HAP) and utility reimbursement payments. We recommend that Management implement procedures to ensure compliance with the above regulations as it relates to the Section 8 Housing Choice Voucher Program. The auditee acknowledges the deficiency as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive Corrective Action Plan.