Finding 1164417 (2024-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-12-10
Audit: 373851
Auditor: COHNREZNICK LLP

AI Summary

  • Core Issue: There were 8 instances where required Housing Quality Standards (HQS) inspections were not conducted in 2024, indicating a significant deficiency in compliance.
  • Impacted Requirements: The failure to perform timely inspections violates HUD's regulations for maintaining subsidized housing, which mandates inspections based on unit size.
  • Recommended Follow-Up: Management should implement procedures to ensure timely inspections, compliance with HUD standards, and proper documentation of inspection results in tenant files.

Finding Text

Finding No. 2024-001 - Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions - Significant Deficiency HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 HOME Investment Partnership Program Entity Identifying Number Initial year Finding instances Passed-through City of Portland, Portland Housing Bureau: Allen Freemont 3110013 2015 1 Passed-through State of Washington: Cascadia Village - HUD 02-40420-008 2002 1 Addy Street - HUD 09-47104-001 2009 1 Passed-through Clark County: Covington Commons - HUD 2011-HOME-11H01 2011 2 Addy Street - HUD 2008-HOME-08H15 2008 1 McCallister Village (Fruit Valley) 2010-HOME-0H0 2010 1 Passed-through City of Vancouver: McCallister Village (Fruit Valley) 2010-HOME-601002 2010 1 Total instances 8 Criteria During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Condition The owner did not ensure passing HQS inspections were performed during 2024. Cause Management did not have in place proper procedures and controls to ensure that HQS inspections were performed and properly documented during the year ended December 31, 2024. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 8 instances of the 8 files tested where the passing HQS inspections were not performed during the year ended December 31, 2024. Repeat Finding: Yes - Finding 2023-001 Recommendation Management should establish procedures to ensure that all units are inspected timely, that they meet the HUD Housing Quality Standards and that the responses to any findings are cleared timely and that the full process is documented in tenant files. Views of Responsible Officials ________________OPEN FOR REACH REPLY.

Corrective Action Plan

Finding No. 2024-001 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Statement of Condition The owner did not ensure passing HQS inspections were performed during 2024. Corrective Action Plan REACH has policies in place for annual HQS inspections, and in 2023 returned to performing these inspections after suspending this activity during prior years impacted by COVID-era policies. Though inspections were performed according to requirements, during the audit we were informed that our inspection form did not include details related to inspection follow-up, work orders and re-inspection. As a result of the 2024 audit, Management implemented the use of a new form in 2025 to capture this additional information related to inspections, work orders and re-inspection

Categories

Special Tests & Provisions HUD Housing Programs Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1164418 2024-002
    Material Weakness Repeat
  • 1164419 2024-003
    Material Weakness Repeat
  • 1164420 2024-004
    Material Weakness Repeat
  • 1164421 2024-005
    Material Weakness Repeat
  • 1164422 2024-006
    Material Weakness Repeat
  • 1164423 2024-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $1.76M
14.275 HOUSING TRUST FUND $1.63M
99.999 LOW INCOME HOUSING PRESERVATION AND RESIDENT HOMEOWNERSHIP ACT OF 1990-CAPITAL GRANT $964,955
14.195 SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM $597,560
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $510,266
21.000 SECTION 607(e ) OF THE NEIGHBORHOOD REINVESTMENT CORPORATION ACT, AS AMENDED $418,750
14.241 HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS $380,000
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $221,798