Audit 43529

FY End
2022-09-30
Total Expended
$379.50M
Findings
10
Programs
6
Year: 2022 Accepted: 2023-07-30

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
50419 2022-002 Material Weakness Yes E
50420 2022-004 Significant Deficiency Yes N
50421 2022-003 Material Weakness - N
50422 2022-003 Material Weakness - N
50423 2022-003 Material Weakness - N
626861 2022-002 Material Weakness Yes E
626862 2022-004 Significant Deficiency Yes N
626863 2022-003 Material Weakness - N
626864 2022-003 Material Weakness - N
626865 2022-003 Material Weakness - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $348.81M Yes 1
14.850 Public and Indian Housing $11.40M Yes 1
14.872 Public Housing Capital Fund $9.69M - 0
14.871 Section 8 Housing Choice Vouchers - Covid-19 $4.94M Yes 1
14.879 Mainstream Vouchers $3.95M Yes 1
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $718,283 Yes 1

Contacts

Name Title Type
SZEGXHQ2K1W3 Mamadou Gning Auditee
4157155200 Benjamin Lau Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 GENERAL Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agencys (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Section 8 Moderate Rehabilitation Single Room Occupancy program (ALN 14.249), Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authoritys basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of the Housing Authority of the City and County of San Francisco, California (Authority). The Authoritys reporting entity is defined in Note 1 of the Authoritys basic financial statements. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Federal programs are listed by their Assistance Listing Numbers (ALN).
Title: NOTE 2 BASIS OF PRESENTATION Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agencys (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Section 8 Moderate Rehabilitation Single Room Occupancy program (ALN 14.249), Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authoritys basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. As a result of the COVID-19 pandemic, many new federal programs have been established and funding has been added to existing federal programs. Expenditures funded from the following acts are denoted by the prefix COVID-19 in the federal program title in the Schedule (as applicable):?Coronavirus Preparedness and Response Supplemental Appropriations Act?Families First Coronavirus Response Act?Coronavirus Aid, Relief, and Economic Security Act (CARES Act)?Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)?American Rescue Plan Act (ARP)
Title: NOTE 3 RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: In accordance with U.S. Department of Housing and Urban Development (HUD) guidance, HUD considers the net Annual Contributions Contract subsidy for a public housing agencys (PHA) fiscal year under audit to be an expenditure for the purposes of the Schedule. Specifically, the net low rent operating subsidy received and the net Section 8 funds received, net of year-end adjustments, by the PHA would be the federal awards expended for the fiscal period under audit. Therefore, the amount in the Schedule is the total amount received directly from HUD for the Section 8 Moderate Rehabilitation Single Room Occupancy program (ALN 14.249), Public and Indian Housing Program (ALN 14.850), Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation program (ALN 14.856), and the Housing Voucher Cluster (ALN 14.871 and 14.879). Expenditures of other federal awards are reported in the Authoritys basic financial statements as expenses for non-capital expenditures and as additions to capital assets for capital-related expenditures. Such expenditures are recognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this Schedule may differ from amounts presented in the basic financial statements. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The Schedule agrees to or can be reconciled with the amounts reported in the Authoritys basic financial statements.

Finding Details

Finding Reference: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Admissions and Continued Occupancy Policy dated October 6, 2021, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 960.257 also requires policies and internal controls be in place and complete and accurate tenant records to ensure compliance with HUD requirements. Condition We tested a statistically valid sample of one month for each of 59 participants selected from a population of 938 program participants who received public housing at the beginning of the fiscal year ended September 30, 2022. Identified issues are listed below: 1. For 12 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 12 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2021-002 reported in the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan
Finding Reference: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Assistance Listing Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allowed public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Condition During our audit we selected a statistically valid sample of 17 participants out of a total population of 77 active program participants and identified 1 participant for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due date. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. The requirement to perform inspections that were postponed from prior years and those that became due in the current year resulted in additional constraints to staffing resources. Effect Housing Assistance Payments (HAPs) may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $9,216 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 17 participants that totaled $155,483 in HAPs to the total HAPs of $706,873 for the year, results in likely questioned costs of $41,899. Identification of Repeat Finding This is a repeat of finding 2021-001 reported for the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria In accordance with 24 CFR 960.257, for families who pay an income-based rent, the Authority must conduct a re-examination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. For families who choose flat rents, the PHA must conduct a re-examination of family composition at least annually, and must conduct a re-examination of family income at least once every three years. Pursuant to Section 7-I.C.of the Authority?s Admissions and Continued Occupancy Policy dated October 6, 2021, the Authority must use the U.S. Department of Housing and Urban Development?s (HUD) Enterprise Income Verification (EIV) system in its entirely as a third-party source to verify tenant employment and income information during mandatory re-examinations or re-certifications of family composition and income in accordance with 24 CFR 5.236 and administrative guidance issued by HUD. EIV will be used to verify that families claiming zero income and are not receiving income from any of these sources. The Authority is required to submit HUD 50058, Family Report, electronically to HUD each time the PHA completes an admission, annual re-examination, interim re-examination, portability move-in, or other change of unit for a family. In the report, the Authority should include the tenant rent at line 13k or 3x based on the result of the examination and collect the amount from tenant properly. 24 CFR 960.257 also requires policies and internal controls be in place and complete and accurate tenant records to ensure compliance with HUD requirements. Condition We tested a statistically valid sample of one month for each of 59 participants selected from a population of 938 program participants who received public housing at the beginning of the fiscal year ended September 30, 2022. Identified issues are listed below: 1. For 12 participants, the Authority was not able to provide relevant documentation on eligibility redetermination and HUD 50058 reporting for our review. 2. For 12 participants, the internal Interim/Annual Review form used by the Authority to document completion and review of interim and annual reviews were not signed to support secondary or quality control reviews. Cause of Condition The Authority does not have adequate internal control procedures in place to ensure all relevant tenant records and documents are properly completed and filed. Effect The Authority is not in compliance with HUD requirements regarding eligibility, re-certifications and HUD-50058 reporting, which may result in assistance provided to ineligible participants. Questioned Costs Questioned costs cannot be determined as project costs are not directly assignable to participants. Identification of Repeat Findings This is a repeat of finding 2021-002 reported in the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the tested files. In addition, the Authority should develop procedures, systems and controls to ensure documentation of proper compliance with tenant eligibility requirements, income calculations and third-party verifications. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan
Finding Reference: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Assistance Listing Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 882.516(b), the Authority is required to perform periodic inspection on each dwelling unit under contract at least annually and at such other times as needed to ensure the owner is meeting the obligations to maintain the unit in decent, safe, and sanitary condition and to provide the agreed upon utilities and other services. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the Section 8 Moderate Rehabilitation (Mod Rehab) Program administered by the Office of Housing Voucher Programs, Office of Public and Indian Housing (PIH). HUD waived the annual inspection requirement and allowed public housing authorities to delay the annual inspections for Mod Rehab units by no later than 1 year from the date on which the annual inspection would have been required in the absence of a waiver. Condition During our audit we selected a statistically valid sample of 17 participants out of a total population of 77 active program participants and identified 1 participant for which the Authority did not complete the Housing Quality Standards (HQS) inspections by the due date. Cause of Condition As a result of the novel coronavirus (COVID-19) health emergency, the Health Officer of the City and County of San Francisco (City) issued a public health order requiring that residents remain in place, with the only exception being for essential needs, effective March 17, 2020. In response to the City?s public health order and to protect the safety of its employees and clients, the Authority implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all annual HQS inspections until late 2021. The requirement to perform inspections that were postponed from prior years and those that became due in the current year resulted in additional constraints to staffing resources. Effect Housing Assistance Payments (HAPs) may be paid on dwelling units that do not meet safety and other requirements. Questioned Costs Known questioned costs include $9,216 of HAPs for the months for which compliance with HQS requirements are questioned. Projecting the known questioned costs from the sample of 17 participants that totaled $155,483 in HAPs to the total HAPs of $706,873 for the year, results in likely questioned costs of $41,899. Identification of Repeat Finding This is a repeat of finding 2021-001 reported for the year ended September 30, 2021. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner, and should take measures to improve its internal record retention and filing systems. Furthermore, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.
Finding Reference: 2022-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. To provide relief during the coronavirus pandemic, HUD waived the biennial inspections through December 31, 2021. The Authority must resume biennial inspections by December 31, 2021. The Authority must conduct all delayed biennial inspections from calendar year 2020 as soon as reasonably possible but no later than June 30, 2022 and must conduct all delayed biennial inspections from calendar year 2021 as soon as reasonably possible but no later than December 31, 2022. Condition From a total population of about 15,000 tenants for the fiscal year ended September 30, 2022, we selected a statistically valid sample of one monthly subsidy payment for each of 62 selected tenants, and identified four tenants whose HQS inspections were completed past the due dates and two tenants whose HQS inspection reports were not provided for review. Cause of Condition The Authority?s internal control procedures were not sufficient to ensure that all HQS inspections are completed within the specified due dates and that all related inspection records are properly filed. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs Known questioned costs of $41,034 represent HAPs for the months for which compliance with housing assistance payments are questioned. Projecting the known questioned costs from the sample of 62 participants that totaled $1,256,435 in HAPs to the total HAPs of $347,949,755 for the year, results in likely questioned costs of $11,363,796. Identification of Repeat Finding This is not a repeat finding in the immediately prior audit. Recommendation The Authority should correct the deficiencies noted in the sampled participant files and consider the impact of the audit results over the entire population. In addition, the Authority should revisit its procedures, systems and controls to ensure the required HQS inspections are completed in a timely manner, and to strengthen its record retention and filing systems. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.