Finding Text
Finding 2024-004 N. Special Tests and Provisions: N4. NSPIRE/Housing Quality Standards Inspections 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 Section 8 – Housing Choice Vouchers (HCV) and Rental Assistance Demonstration (RAD) Program Year: January 1, 2024 through December 31, 2024 Program No.: Multiple 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).” Condition: For 4 of 40 (10%) inspections sampled to test the Authority’s internal controls to ensure inspections are completed in accordance with the Authority’s HCV Administrative Plan and meet housing quality standards (HQS), we noted that the inspections completed by the Compliance Specialist in fiscal year 2024 were not conducted in accordance with the required biennial time frame. Based on the date of the prior inspections, the inspections were not conducted within the two years required by the HCV Administrative Plan. Cause: The Authority’s internal control, whereby a knowledgeable Compliance Specialist (i.e., Inspector) performs a biennial inspection of the unit and completes a standardized inspection checklist to confirm the unit meets the housing quality standards, was not operating effectively during the fiscal year. Effect or Potential Effect: HQS inspections may not be conducted biennially in accordance with the Authority’s HCV Administrative Plan. Questioned Costs: None. Context: There were 28,111 HQS inspections performed for the HCV program under the MTW during the fiscal year ended December 31, 2024. Identification as a Repeat Finding, if Applicable: This finding is not a repeat finding from the prior year. Recommendation: The Authority should follow its established internal control over HQS inspections as outlined in its HCV Administrative Plan. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.