Finding Number: 2024-003 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions, HQS Enforcement/Housing Quality Standards Inspections Pass-Through Entity: N/A Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2023-003 Noncompliance and Material Weakness 2 CFR § 982.404 provides that the owner must maintain the unit in accordance with HQS. If the owner fails to maintain the dwelling unit in accordance with Housing Quality Standards (HQS), the PHA must take enforcement actions in accordance with 2 CFR § 982.404. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract. The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must cure the defect within no more than 24 hours. For other defects, the owner must cure the defect within no more than 30 calendar days (or any PHA-approved extension). The owner is not responsible for a breach of the HQS that is not caused by the owner, and for which the family is responsible (as provided in § 982.404(b) and § 982.551(c)). However, the PHA may terminate assistance to a family because of HQS breach caused by the family. The Authority did not have a HQS reinspection completed within 30 calendar days for HQS inspection failures for 10 percent of inspection failures tested. Further, the Authority did not formally approve any related extensions for these inspections. Failure to complete timely reinspection or approve extensions could result in dwellings not maintained in accordance with HQS. The Authority should complete reinspection within the required time frame or approve extensions.
Finding Number: 2024-004 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting Pass-Through Entity: N/A Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2023-004 Noncompliance and Material Weakness 2 CFR § 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR § 200.328 which provides that, unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved government-wide data elements for collection of financial information, as well as any future OMB-approved government-wide data elements from the OMB-designated standards lead.. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB approved common information collections, as applicable, when providing financial and performance reporting information. 24 CFR § 5.801(d)(1) provides that unaudited financial statements will be required 60 days after the PHA's fiscal year end, and audited financial statements will then be required no later than 9 months after the PHA's fiscal year end, in accordance with the Single Audit Act and 2 CFR part 200, subpart F. In addition, 24 CFR § 5.801(b)(1) provides that entities to which this subpart is applicable must provide to HUD such financial information as required by HUD prepared in accordance with Generally Accepted Accounting Principles (GAAP). The Authority submitted its audited submission for the year ended December 31, 2023 in the Financial Assessment Sub- system (FASS-PH) on September 9, 2025. This submission was not within the required timeframes or extension. The delays in submissions were continuations from prior investigations into fraudulent transactions by the former Executive Director. The failure to timely submit the required financial information reduces the U.S. Department of Housing and Urban Development’s ability to monitor subrecipients. The Authority should continue working with their compiler and auditors to rectify the accounting issues resulting from the actions of the former Executive Director. Once that is completed, the Authority should timely remit the required reports.
Finding Number: 2024-005 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions, Reasonable Rent Pass-Through Entity: N/A Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2023-002 Noncompliance and Significant Deficiency- Rent Reasonableness 24 CFR § 982.158(f)(7) provides that the Public Housing Authority (PHA) must keep records to document the basis for PHA determination that rent to owner is a reasonable rent (initially and during the term of a HAP contract) for at least three years. 24 CFR § 982.54(d)(15) provides the Public Housing Authority (PHA) administrative plan must cover policies on the method of determining that rent to owner is a reasonable rent (initially and during the term of a Housing Assistance Payment contract). The Authority’s Housing Choice Voucher Administrative Plan Section 8 provides the Authority will make a rent reasonableness determination at initial occupancy and whenever the owner requests a rent adjustment. The Authority could not provide the reasonable rent certification for 3.3 percent of the current files tested for the Housing Voucher Cluster program. The failure to document rent reasonableness could lead to future questioned costs, reduced future federal funding, and the requirement to repay the U.S. Department of Housing and Urban Development. The Executive Director and Housing Voucher Cluster employees should ensure all tenant files maintain the appropriate documentation and meet the requirements for rent reasonableness.
Finding Number: 2024-006 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting, Eligibility, Special Tests and Provisions Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Significant Deficiency 24 CFR § 982.516 states the Public Housing Authority (PHA) must conduct a reexamination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors, or must document why third-party verification was not available: (i) 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 § 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR § 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority input data into the HUD-50058 inaccurately for 3.3 percent of the tenant files tested for the Housing Choice Voucher program. This resulted in the data reported on HUD-50058 to be inaccurate and variances in the calculation of the total HAP and the Utility Reimbursement Payment. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of income verification and housing assistance payments reporting.