Finding Text
2024-004 – Quality Control Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Choice Voucher Program FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2024 Award Period: 1/1/2024-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Per the Commission’s administrative plan, quality control (QC) re-inspections will be performed on recently completed HQS inspections, within 90 days of their completion. Condition: The Commission did not follow internal controls designed to ensure QC re-inspections are performed timely. Questioned costs: Unknown Context: During our testing of eight files for QC inspections, we noted the following: • eight of eight units had inspections where the quality control inspection was performed more than ninety days after the initial inspection. Cause: HCHC employs a third-party inspection company. Many of the issues caused by the previous inspection company did not surface until early in 2023. HCHC then attempted to work with the third-party inspection company, however, ultimately that company was not able to comply with inspection requirements and HCHC terminated its contract as of June 30, 2024. Effect: The Commission is not in compliance with HUD requirements. Repeat finding: No. Recommendation: We recommend the Commission review their quality control procedures to ensure any unit used for quality control is inspected timely. Views of responsible officials: There is no disagreement with the audit finding.