Audit 406612

US Department of Housing and Urban Development Direct Award Program Name Housing Choice Voucher; Mainstream Voucher "Internal Control" Significant Deficiency N Special Tests ALN(s) 14.871; 14.879 2025-001 Housing Quality Standards Inspection/HQS Enforcement Criteria The PHA must inspect the unit leased to a family at least bi-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 §§982.405, 983.103). Additionally, 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 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 PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition During our audit, we identified four (4) failed HQS with Life Threatening issues based on the Authority's admin plan that did not receive a pass inspection within the required 24 hour time frame. Additionally, we found 2 units that were not inspected within the biennially period. Context The HQS population was 148 failed inspection. We selected a sample of 14 inspection and identified of those 14 reviewed 4 did not obtain a re-inspection pass within the criteria noted above and no rent abatement process was enforced on landlords. The HQS inspection population was all HAP payments for the year, and we selected a sample of 40 to test. Out of the 40 HAP payments tested, we identified 2 that were not inspected within the biennial requirement. Cause 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. Effect 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. Recommendations 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. Questioned Costs The exact monetary impact needs further investigation to determine the amount of HAP that should have been abated for the period of non-compliance. Management Views 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.

US Department of Housing and Urban Development Direct Award Program Name Public Housing Capital Fund "Internal Control" Material Weakness B Allowable Cost ALN(s) 14.872 2025-002 Housing Quality Standards Inspection/HQS Enforcement Criteria The Authority receives federal funding from the U.S. Department of Housing and Urban Development (HUD) under two programs. A portion of the Authority’s federal funding is received under the Capital Fund Program (CFP). The CFP provides financial assistance to public housing authorities to make improvements to existing public housing units. Compliance with regard to this finding can be found at 24CFR905.202. Condition Per 24CFR905.202(j), any cost that HUD has determined on a case-by-case basis is considered ineligible to be funded with Capital Funds. Context We discovered that during the fiscal year ending December 31, 2025, the Authority purchased a maintenance vehcile using eLOCC Budet Line Item 1480 "General Capital Activity". HUD has issued guidance saying this is considered operation cost and CFP 1480 BLI cannot be used to purchase a maintenance vehicle. Cause The cause of this noncompliance is due to lack of understanding on the part of management for what is allowable and unallowable. Effect The effect of this noncompliance is the potential for HUD to impose sanctions on the PHA, which can be found at 24CFR905.804. Recommendations Management should review 24CF905.200 and 24CFR905.202 to familiarize themselves with the eligible activities for the program and ensure future compliance with these requirements. Questioned Costs The entire CFP draw of $75,941.25 is questioned cost. Management Views Management agrees with the finding