FAC Explorer

Finding 1155873 (2024-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-09-29
Audit: 368256
Organization: South Delta Regional Housing Authority (MS)
Auditor: Cork Hill & Company LLC

AI Summary

  • Core Issue: Seven units failed HQS inspections and were not re-inspected within the required 30 days, leading to non-compliance with HUD regulations.
  • Impacted Requirements: HUD regulations mandate timely corrections of life-threatening deficiencies within 24 hours and all other deficiencies within 30 days.
  • Recommended Follow-Up: Strengthen internal controls and provide training to ensure timely inspections and compliance with HUD requirements.

Finding Text

Finding 2023-002 - Section 8 HQS Inspection Deficiencies, Significant Deficiency Section 8 Housing Choice Voucher Program - ALN No. 14.871; Grant period - year ended December 31, 2024 Criteria: The Code of Federal Regulations and HUD guidelines give the requirements for annual inspections to determine if the units leased to families meet the Housing Quality Standards. Specifically, HUD regulations CFR Parts 982.158 and 982.404 require inspections of units under HAP contract that fail to meet HQS. The PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. Condition: HQS inspections were tested for compliance in the current year. Of the 14 failed HQS inspections selected for review, 7 units were not re-inspected with the 30-day requirement and HAP payments were not properly abated. Cause: Lack of controls over compliance with HUD regulations and turnover of staff. Effect: Non-compliance with HUD regulations. Questioned Costs: Not identified Recommendation: We recommend that the Authority should continue to strengthen its internal controls in relation to the HQS inspection and re-inspection process to ensure that they are completed within the required timeframe to meet the HUD compliance requirements. Management's Response: The Authority is continuing to work on the procedures for failed inspections to ensure that the re- inspections are performed within the 30-day requirement. The Authority is also planning on additional training for employees to make sure they are qualified to meet the HQS re-inspection requirements. Patricia Logan, Executive Director, has assumed the responsibility of ensuring that the inspections will be performed within the timeframe to meet the HUD compliance requirements and expects the deficiencies which led to this finding to be resolved by December 31, 2025.

Corrective Action Plan

To the Department of Housing and Urban Development, During the audit of the Housing Authority’s fiscal year ended December 31, 2024 financial statements, it was determined that the unaudited financial data schedule was submitted to HUD after the deadline for unaudited financial data schedules had occurred. Secondly, the Housing Authority did not conduct HQS re-inspections during the 30-day period required by HUD. And lastly, a desk review was performed by HUD and it was determined that the Housing Authority had not properly documented its calculation of monthly voucher amounts in its VMS reporting. Patricia Logan is responsible for implementing the corrective action plan. CAP developed to resolve audit findings: Finding 2024-001 - Internal Control over Financial Reporting – Unaudited Submission We concur with the recommendation and we will establish controls that ensure that the unaudited FDS filing occurs before March 31st of each year. This would include providing our fee accountant with all financial documents necessary to complete the unaudited FDS submission on a timely basis. We will also keep a list of all federal submission deadlines and we will request updates from our fee accountant on a regular basis. Finding 2024-002 - Section 8 HQS Inspection Deficiencies We concur with the recommendation and we will establish controls that ensure that re-inspections are performed within the 30-day requirement and that HAP abatements are properly assessed. We are also planning on additional training for employees to make sure they are qualified to meet the HQS re-inspection requirements.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1155874 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $216,184
14.870 Resident Opportunity and Supportive Services - Service Coordinators $112,443