Finding Text
Finding 2024-002 N. Special Tests and Provision: N17. Environmental Contaminants Testing and Remediation Identification of the federal program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Assistance Listing Number: 14.881 Federal Program Name: Moving to Work (MTW) Demonstration Program Public and Indian Housing (Public Housing) Program Year: January 1, 2024 through December 31, 2024 Program No.: IL002-01-00024D Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR section 5.703 states, “HUD housing must be decent, safe, sanitary and in good repair. Owners of housing described in §5.701(a), mortgagors of housing described in §5.701(b), and PHAs and other entities approved by HUD owning housing described in §5.701(c), must maintain such housing in a manner that meets the physical condition standards set forth in this section in order to be considered decent, safe, sanitary and in good repair. These standards address the major areas of the HUD housing: the site; the building exterior; the building systems; the dwelling units; the common areas; and health and safety considerations.” Condition: Forty failed uniform physical condition standards (UPCS) inspections and 30 failed environmental inspections were selected for compliance testing out of the total 5,633 failed UPCS inspections and 176 failed environmental inspections, respectively, reported by the Authority. Internal controls were not in place to ensure that failed UPCS and environmental inspections were remediated. For 23 of the 40 (57.5%) failed UPCS inspections and 17 of the 30 (56.7%) failed environmental inspections tested for compliance, the Authority did not maintain adequate supporting documentation to evidence that the safety/environmental concern from the failed inspection was remediated or remediated in a timely manner. The nature of the issues is as follows: • For eight failed UPCS inspections sampled, remediation was not completed. • For 15 failed UPCS inspections sampled, remediation was not completed timely. • No work order was available for 10 failed environmental inspections sampled; therefore, testing for remediation/correction of safety concerns/findings could not be performed • For four failed environmental inspections sampled, the work order was in completed status; however, no documentation/support was available to evidence that the safety concerns/findings were remediated/completed. • For three failed environmental inspections sampled, the remediation was not completed in a timely manner. Cause: Internal controls were not in place over the creation and follow-up of work orders related to failed UPCS and environmental inspection reports to ensure the identified safety/environmental concerns were remediated. Effect or Potential Effect: HUD housing may not meet the physical condition standards and environmental contaminants may not be remediated. Questioned Costs: None. Context: The Public Housing program had a total of 15,263 UPCS inspections performed during the year ended December 31, 2024, of which 5,633 were failed inspections that required remediation, 6,267 passed with comments, 2,763 were inconclusive, and 600 were canceled. The Public Housing program had a total of 176 environmental inspections performed during the year ended December 31, 2024. Identification as a Repeat Finding, if Applicable: This finding is a repeat of finding 2024-003 from the prior year. Recommendation: The Authority should implement internal controls over the monitoring of failed UPCS and environmental inspections to ensure that identified safety/environmental concerns are remediated. Adequate supporting documentation should be maintained of all remediation activities. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.