Audit 414155

Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: HQS Enforcement and Inspections Significant Deficiency in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients perform inspections of properties where tenants receiving Housing Assistance Payments reside and when inspections fail, re-inspections must be performed within 30 days for non-life-threatening issues and within 24 hours for life-threatening issues. In addition, the Housing Choice Voucher program requires inspections on these units to be performed at a minimum of once biennially. Condition: The Authority did not perform re-inspections of 3 failed inspections within the prescribed 30-day or 24-hour requirement during 2025. In addition, HAP was not properly reviewed for possible abatement for 2 of these tenants. The Authority also did not have adequate controls in place for 3 other units to ensure the re-inspection requirement was met, however the lack of controls did not result in any non-compliance. Cause: Controls over inspections that are a part of special tests and provisions were not properly designed to ensure that re-inspections of properties occurred within 30 days or 24 hours of a failed inspection, thus resulting in a deficiency of internal control. Effect: The Authority could be issuing HAP for properties that are not up to code or potentially dangerous for their recipients if inspections fail and re-inspections are not occurring timely. In addition, an abatement of HAP might be missed if the re-inspections are not occurring timely. Questioned Costs: None reported Context/Sampling: We tested 60 out of a population of over 250 failed inspections during 2025 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend management revisit controls over follow-up on failed or incomplete inspections to correct this matter and ensure no further findings occur. Views of Responsible Officials: There is no disagreement with the audit finding.

Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: Reasonable Rent Significant Deficiency in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients must determine that rent to the owner is reasonable in comparison to rent for other comparable unassisted units. Condition: The Authority was unable to provide documentation for the rent reasonableness comparison for 1 tenant during 2025. Cause: Controls over reasonable rent determination that are a part of special tests and provisions were not properly designed to ensure that comparisons were being retained. Effect: As a result of the failure to determine reasonable rent for units leased under the Housing Choice Voucher program, there is an increased risk that the Authority is overpaying landlords, which can result in noncompliance with HUD regulations. Questioned Costs: None reported Context/Sampling: We tested 29 out of a population of 149 new leases during 2025 based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend management revisit controls to ensure that reasonable rent determinations are conducted and documented in accordance with HUD requirements. Views of Responsible Officials: There is no disagreement with the audit finding.