FAC Explorer

Finding 1146126 (2024-005)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-06-30
Audit: 361021
Organization: City of Long Beach (CA)
Auditor: Crowe LLP

AI Summary

  • Core Issue: The PHA lacked adequate internal controls, resulting in 18 re-inspections not completed on time, violating both PHA policy and federal regulations.
  • Impacted Requirements: Noncompliance with PHA policy 8-II.F and 24 CFR 982.406(e)(5) regarding timely inspections and corrections of deficiencies.
  • Recommended Follow-Up: Implement stronger internal controls to ensure timely re-inspections and address unresolved deficiencies promptly to maintain compliance.

Finding Text

Finding Number: 2024-005 Finding Title: Internal Controls over Compliance of Reinspection’s to Enforce Housing Quality Standards Compliance Requirement(s): Special Tests – Housing Quality Standards Enforcement Classification: Material Weakness Programs: Section 8 Housing Choice Vouchers ALN #: 14.871 Pass-through entity: N/A – Direct Award Federal Agency: Department of Housing and Urban Development (HUD) Federal Award Numbers: Multiple – City receives incremental funding throughout the year Federal Award Year: 2024 Criteria or specific requirement (including statutory, regulatory, or other citation PART 982—SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER PROGRAM 24 CFR 982.54(d)(21) Procedural guidelines and performance standards for conducting required HQS inspections, including: (i) Any deficiency that the Public Housing Authority (PHA) has adopted as a life-threatening deficiency that is not a HUD-required life-threatening deficiency (ii) For PHAs that adopt the initial inspection non-life-threatening deficiency option: a. The PHA's policy on whether the provision will apply to all initial inspections or a portion of initial inspections. b. The PHA's policy on whether the provision will be applied to only some inspections and how the units will be selected. c. The PHA's policy on using withheld HAP funds to repay an owner once the unit is in compliance with HQS. (iii) For PHAs that adopt the alternative inspection provision: a. The PHA's policy on how it will apply the provision to initial and periodic inspections. b. he specific alternative inspection method used by the PHA. c. The specific properties or types of properties where the alternative inspection method will be employed. d. For initial inspections, the maximum amount of time the PHA will withhold HAP if the owner does not correct the HQS deficiencies within the cure period, and the period of time after which the PHA will terminate the HAP contract for the owner's failure to correct the deficiencies, which may not exceed 180 days from the effective date of the HAP contract. (iv) The PHA's policy on charging a reinspection fee to owners. 24 CFR 982.54(d)(22) The PHA's policy on withholding HAP for units that do not meet HQS (see § 982.404(d)(1)) 24 CFR 982.406(e)(5) The PHA may commence housing assistance payments to the owner and make housing assistance payments retroactive to the effective date of the HAP contract only after the unit passes the PHA's HQS inspection. If the unit does not pass the HQS inspection, the PHA may not make housing assistance payments to the owner until all the deficiencies have been corrected. If a deficiency is life-threatening, the owner must correct the deficiency within 24 hours of notification from the PHA. For other deficiencies, the owner must correct the deficiency within no more than 30 calendar days (or any PHA-approved extension) of notification from the PHA. If the owner corrects the deficiencies within the required cure period, the PHA makes the housing assistance payments retroactive to the effective date of the HAP contract. PHA POLICY 8-II.F. INSPECTION RESULTS AND REINSPECTIONS FOR UNITS UNDER HAP CONTRACT The city of Long Beach PHA Admin Plan requires that each deficiency is identified in the NPSIRE standards as either life-threatening, severe, moderate, or low. Further indicating that units under HAP contract, must correct for life-threatening deficiencies within 24 hours after notice has been provided and all others must be corrected within 30 days (or a PHA-approved extension) after notice has been provided. Life-threatening deficiencies require notifying both parties by telephone or email immediately while Severe or moderate deficiencies will be provided through a written notification within five business days of the inspection. Both will include specifying who is responsible for correcting the violation and the time frame within which the failure must be corrected. If low deficiencies are identified, these deficiencies will only be noted for informational purposes. The notice will inform the party which caused the deficiencies, whether owner or family, that if life-threatening conditions are not corrected within 24 hours, and non-life-threatening conditions are not corrected within the specified time frame (or any PHA-approved extension), the owner’s HAP will be abated in accordance with PHA policy (Section 8-II.G.) or the family’s assistance will be terminated in accordance with PHA policy (Chapter 12). 2 CFR 200 SUBPART D – POST FEDERAL AWARD REQUIREMENTS 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure eligibility criteria are met and documented. Condition The PHA did not have sufficient internal controls in place to ensure timely reinspection of initial inspections for housing quality standard enforcement leading to eighteen re-inspections which were not completed within the required time frames set by PHA policy, created in accordance with federal requirements. The inspections selected were categorized as severe or moderate deficiencies, allowing for a 30 day period starting after providing notification of inspection results which must occur within 5 days of the inspection completion (or effectively 35 days), the eighteen samples mentioned were completed after this window causing the PHA to be noncompliant with PHA policy 8-II.F and 24 CFR 982.406(e)(5). Additionally, one tenant failed inspection in October 2023 before failing a subsequent reinspection in December 2023. No further action was taken by the PHA, and the case was closed without resolving the deficiencies that caused the inspections to fail leading to noncompliance with 24 CFR 982.406(e)(5) and PHA policy 8-II.F. Cause The delayed reinspection’s and mistakenly closed inspection were due to constraints on resources and a change in the system utilized by the authority to administer the program during the year. Effect or potential effect The PHA did not perform necessary procedures to enforce owner and/or family obligations to correct deficiencies, which if unresolved, could lead to housing assistance payments to either party which should have been abated. Questioned costs None Context Sixty inspections requiring reinspection were selected for testing, eighteen were found to be completed after the required reinspection date. Late reinspection’s ranged from 1 day late to over a year late. One of the failed re-inspections cases was closed by management prior to resolution of identified deficiencies. None of the 60 samples selected were categorized as “life threatening”. Identification as a repeat finding if applicable 2023-008 Recommendation We recommend the Authority enhance internal controls over the timeliness and completeness of its the housing quality standard enforcement procedures. Views of responsible officials and planned corrective actions The HACLB acknowledges the importance of timely reinspections to ensure compliance with Housing Quality Standards (HQS) and has taken concrete steps to strengthen its internal controls and enforcement mechanisms. To strengthen compliance and reduce delays, HACLB implemented an enhanced reinspection scheduling process in December 2024, using its MRI housing software to automatically schedule reinspections within the 30-day remediation period. The system also tracks extension requests and approvals, while staff regularly monitor system-generated reports to ensure timely follow-up and adherence to HUD standards. These improvements are designed to ensure that repairs are verified within the required timeframe, increase program compliance, and improve the overall quality of housing for HCV participants. HACLB is committed to ongoing monitoring and refinement of this process to ensure continuous improvement.

Categories

HUD Housing Programs Subrecipient Monitoring Eligibility Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 569667 2024-001
    Material Weakness Repeat
  • 569668 2024-001
    Material Weakness Repeat
  • 569669 2024-001
    Material Weakness Repeat
  • 569670 2024-001
    Material Weakness Repeat
  • 569671 2024-001
    Material Weakness Repeat
  • 569672 2024-001
    Material Weakness Repeat
  • 569673 2024-002
    Material Weakness Repeat
  • 569674 2024-002
    Material Weakness Repeat
  • 569675 2024-002
    Material Weakness Repeat
  • 569676 2024-002
    Material Weakness Repeat
  • 569677 2024-002
    Material Weakness Repeat
  • 569678 2024-002
    Material Weakness Repeat
  • 569679 2024-003
    Material Weakness Repeat
  • 569680 2024-003
    Material Weakness Repeat
  • 569681 2024-004
    Significant Deficiency
  • 569682 2024-004
    Significant Deficiency
  • 569683 2024-005
    Material Weakness Repeat
  • 569684 2024-005
    Material Weakness Repeat
  • 569685 2024-006
    Material Weakness Repeat
  • 569686 2024-006
    Material Weakness Repeat
  • 569687 2024-007
    -
  • 569688 2024-007
    -
  • 1146109 2024-001
    Material Weakness Repeat
  • 1146110 2024-001
    Material Weakness Repeat
  • 1146111 2024-001
    Material Weakness Repeat
  • 1146112 2024-001
    Material Weakness Repeat
  • 1146113 2024-001
    Material Weakness Repeat
  • 1146114 2024-001
    Material Weakness Repeat
  • 1146115 2024-002
    Material Weakness Repeat
  • 1146116 2024-002
    Material Weakness Repeat
  • 1146117 2024-002
    Material Weakness Repeat
  • 1146118 2024-002
    Material Weakness Repeat
  • 1146119 2024-002
    Material Weakness Repeat
  • 1146120 2024-002
    Material Weakness Repeat
  • 1146121 2024-003
    Material Weakness Repeat
  • 1146122 2024-003
    Material Weakness Repeat
  • 1146123 2024-004
    Significant Deficiency
  • 1146124 2024-004
    Significant Deficiency
  • 1146125 2024-005
    Material Weakness Repeat
  • 1146127 2024-006
    Material Weakness Repeat
  • 1146128 2024-006
    Material Weakness Repeat
  • 1146129 2024-007
    -
  • 1146130 2024-007
    -

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $120.21M
14.871 Covid-19 Section 8 Housing Choice Vouchers $10.23M
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $4.78M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $4.71M
15.916 Outdoor Recreation Acquisition, Development and Planning $3.25M
14.218 Community Development Block Grants/entitlement Grants $3.09M
14.239 Covid-19 Home Investment Partnerships Program $2.69M
14.267 Continuum of Care Program $2.64M
93.391 Covid-19 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $2.49M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2.24M
93.967 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health $2.18M
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $1.40M
14.905 Lead Hazard Reduction Demonstration Grant Program $1.38M
97.083 Staffing for Adequate Fire and Emergency Response (safer) $1.12M
93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants $999,999
97.056 Port Security Grant Program $932,765
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $854,633
93.069 Public Health Emergency Preparedness $665,205
21.023 Covid-19 Emergency Rental Assistance Program $507,069
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $490,848
93.917 Hiv Care Formula Grants $484,663
14.239 Home Investment Partnerships Program $451,935
14.896 Family Self-Sufficiency Program $432,780
93.268 Immunization Cooperative Agreements $432,307
93.197 Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $429,620
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $410,894
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $383,791
97.039 Hazard Mitigation Grant $382,753
17.278 Wioa Dislocated Worker Formula Grants $350,555
97.067 Homeland Security Grant Program $300,000
93.914 Hiv Emergency Relief Project Grants $289,938
20.600 State and Community Highway Safety $284,300
93.779 Centers for Medicare and Medicaid Services (cms) Research, Demonstrations and Evaluations $256,377
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $231,566
20.616 National Priority Safety Programs $218,597
93.994 Maternal and Child Health Services Block Grant to the States $210,338
20.823 Port Infrastructure Development Program $188,954
11.307 Economic Adjustment Assistance $182,968
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $178,614
93.778 Medical Assistance Program $176,132
14.218 Covid-19 Community Development Block Grants/entitlement Grants $158,157
17.258 Wioa Adult Program $158,086
14.231 Covid-19 Emergency Solutions Grant Program $152,789
20.106 Covid-19 Airport Improvement Program $150,326
10.559 Summer Food Service Program for Children $140,895
17.277 Wioa National Dislocated Worker Grants / Wia National Emergency Grants $126,319
15.514 Reclamation States Emergency Drought Relief $122,865
16.835 Body Worn Camera Policy and Implementation $115,530
14.241 Housing Opportunities for Persons with Aids $102,582
66.472 Beach Monitoring and Notification Program Implementation Grants $100,392
14.895 Jobs-Plus Pilot Initiative $100,000
93.078 Strengthening Emergency Care Delivery in the United States Healthcare System Through Health Information and Promotion $100,000
97.042 Emergency Management Performance Grants $96,606
93.070 Environmental Public Health and Emergency Response $93,505
17.259 Wioa Youth Activities $92,985
93.354 Covid-19 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $90,945
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $80,000
14.231 Emergency Solutions Grant Program $78,943
14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants $78,176
93.318 Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security $76,544
20.106 Airport Improvement Program $73,897
93.558 Temporary Assistance for Needy Families $71,000
14.900 Lead Hazard Reduction Grant Program $65,146
93.977 Sexually Transmitted Diseases (std) Prevention and Control Grants $60,794
10.727 Inflation Reduction Act Urban & Community Forestry Program $53,135
16.710 Public Safety Partnership and Community Policing Grants $49,436
15.507 Watersmart (sustain and Manage America’s Resources for Tomorrow) $44,081
93.421 Covid-19 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $28,826
14.913 Healthy Homes Production Program $17,399
93.940 Hiv Prevention Activities Health Department Based $9,832
16.738 Edward Byrne Memorial Justice Assistance Grant Program $6,578
20.205 Covid-19 Highway Planning and Construction $5,130
20.205 Highway Planning and Construction $558