Finding Text
Assistance Listing Number, Federal Agency, and Program Name 14.871, U.S. Department of Housing and Urban Development (HUD), Section 8 Housing Choice Vouchers Program
Federal Award Identification Number and Year Not applicable
Pass through Entity Not applicable
Finding Type Significant deficiency
Repeat Finding No
Criteria Per 24 CFR Chapter IX, Part 982, Subpart I, Section 982.405 (a), the PHA must inspect the unit prior to the initial term of the lease to determine if the unit meets the Housing Quality Standards (HQS) as prescribed by HUD. If the HQS standards are not met, the owner must correct the deficiency within 30 days of the notification from the PHA (Section 982.405 (d)(2)).
Per Section 982.405(j)(4), if the owner fails to correct the deficiencies within the 30 day cure period, the PHA must withhold the housing assistance payments until the owner makes the repairs and the PHA verifies the correction.
Condition The City had insufficient controls in place that resulted in the City releasing HAP payments on behalf of a participant, despite a failed HQS inspection, which was not rectified within the 30-day cure period or the months that followed.
Questioned Costs $1,542
Identification of How Questioned Costs Were Computed Questioned costs are all the housing assistance payments made during the City's fiscal year ended June 30, 2024 on behalf of this participant, which was July 2023 to January 2024
Context During tenant file testing, we identified the City had one participant whose initial HQS inspection failed and lacked supporting information to demonstrate the deficiencies were cured within the 30-day cure period, yet teh City continued to provide the participant with housing assistance payments throughout the year.
Cause and Effect The City was not able to provide sufficient documentation of the owner correcting the deficiencies from the initial failed HQS inspection and did not terminate housing assistance payments to the participants. This resulted in the participant receiving ineligible housing assistance payments of $1,058 during the year under audit and $1,542 in totality, inclusive of amounts pertaining to the City's prior fiscal year.
Recommendation We recommend the City implement controls surrounding the follow up of failed initial inspections after the 30 day cure period is over to ensure the owner corrected all deficiencies. We also recommend the City obtain these results from the third party inspectors in a timely manner in order for the City to stop housing assistance payments immediately, and remain compliance with the program requirement.
Views of Responsible Officials and Corrective Action Plan The City has implemented controls with our inspection vendors to ensure reinspection is completed within the necessary 30 days and communicated to the PHA. If the owner fails to make the necessary corrections within the 30 day cure period, the PHA will withhold housing assistance payments in accordance with 24 CFR Chapter IX, Part 982 until the PHA verifies the corrections have been made. The City has also implemented a process to ensure reinspection documentation, when applicable, is included in the participant file. We expect this finding to be corrected by June 30, 2025.