Finding 1124008 (2024-001)

Reference Number 2024-001 Evaluation of Finding Material Weakness in Internal Control Over Compliance Federal Award Information Assistance Listing Number: 14.239 Program Title: HOME Investment Partnership Program Federal Award Year: 2024 Name of Federal Agency: U.S. Department of Housing and Urban Development Criteria Per OMB Compliance supplement under special tests and provisions and 24CFR Part 92 properties funded by HOME are required to have annual inspections and maintain accurate and timely records that meet the Housing Quality Standards. Condition During the audit, it was observed that the City did not conduct the required inspections for HOME funded properties on an annual basis to ensure compliance with Housing Quality Standards. Cause of Condition The cause of this material weakness appears to be a technical error made in the system that notifies the City when an inspection is due. The incorrect program information was entered causing the inspections to occur on a biannual basis. Effect or Potential Effect of Condition Failure to inspect the HOME funding properties on an annual basis results in noncompliance with federal regulations. In addition, there may be undetected issues with the property’s condition that could compromise the health and safety of tenants. Questioned Costs No questioned costs identified. Context HOME-funded project, inspections are a crucial part of ensuring compliance with program requirements and that the housing meets safety, quality, and habitability standards. If inspections are skipped or not properly documented, this can lead to non-compliance with those requirements. Recommendation The City should review inspection requirements for their various grants requiring such stipulations. Staff responsible for compliance monitoring and inspections should be trained on the HOME program’s requirements, including the frequency of inspections and required documentation.