Audit 412551

Finding 2025-001 - Incomplete or Unsupported Tenant Inspection Documentation. Criteria – Recipients administering HOME-assisted rental housing are required to maintain documentation sufficient to demonstrate compliance with applicable program requirements, including applicable property condition, inspection, and record retention requirements. Tenant files and related program records should support that required inspections were completed timely and that any failed inspection items were corrected, as applicable. Condition – During our review of tenant files of two projects, wholly owned by PPL, we noted that the inspection documentation was not consistently maintained or did not demonstrate that required inspections and related repairs were completed. Questioned costs and how they were computed – No questioned costs identified. Context – Three of Five tenant files did not maintain unit inspections or demonstrate that failed inspections items were repaired. Cause – Prior to May 2025, Management did not have an internal compliance department, and the property management department was still experiencing high turnover as it made significant leadership changes to normalize operations and began standardizing operations. Compliance was managed externally by a third-party agency, which caused inspections to be handled in a digital format and many physical files were not properly filed, leading to file misplacement, errors, and in some cases loss of documentation. Effect – Because inspection documentation was incomplete or unavailable, the auditee could not fully support that the sampled units met applicable program inspection or property condition requirements at move-in and/or during 2025. In addition, for the tenant who failed the move-in inspection, the absence of evidence that repairs were completed prevents verification that identified deficiencies were corrected. Identification of Repeat Finding – No. Recommendation 2025-001 – We recommend that management strengthen controls over tenant inspection documentation and corrective action tracking for HOME-assisted units. Specifically, management should: implement a centralized inspection tracking process to monitor required move-in inspections, annual or periodic inspections, failed inspection results, required repairs, repair completion dates, and supporting evidence. Auditee’s comments and response – Management agrees with the finding and is in the process of standardizing procedures to monitor unit inspections and repairs done for failed inspections. Responsible party for corrective action: Haeyoon Fry, Director of Compliance & Operations