Finding 1168389 (2024-002)

Finding 2024-002: U.S. Department of Housing and Urban Development, HOME Investments Partnerships Program Statement of Condition: During the fiscal year ended June 30, 2024, HQS unit inspections were not sufficiently tracked and supporting documentation was not properly maintained by management. Of the 155 units with HOME funding, the following issues were identified: 1) 9 units failed inspection, and no passing letter or inspection results was provided to confirm that noncompliance was timely corrected. 2) 12 units received an initial inspection notice, however no passing letter or inspection results were provided to verify whether the unit passed or failed the inspection. 3) 89 units had no inspection-related documentation provided, making it impossible to determine whether inspections were required or conducted during the period under audit. Criteria: Per 24 CFR §92.251 and §92.504, participants must ensure the housing assisted with HOME funds meet property standards, including ongoing compliance with Housing Quality Standards (HQS). Documentation of inspections and necessary corrective actions must be maintained to demonstrate compliance with program requirements. Cause: The deficiencies appear to stem from a lack of adequate tracking on when inspections are due under the HOME program and inadequate recordkeeping and monitoring procedures related to unit inspections. Effect: Without sufficient documentation provided for examination, the auditor could not verify whether units met required HQS or whether deficiencies were corrected in a timely manner. This raises concerns about the program's compliance with federal inspection and monitoring requirements. Context: The population size is 155 units, which were constructed using funds from the HOME program. Questioned costs: $0 Recommendation: Management should implement procedures to track the HOME units inspections in order to properly document when the unit has passed a HQS inspection, and determine when the unit's next required inspection is due based on the number of HOME units at the property, as some are required annually, biennially, and triennially. Management should also implement procedures for saving inspection results and corrective actions, and provide training for staff on compliance documentation requirements. Management's Response and Corrective Action Plan: Management agrees with the recommendation and will implement procedures to track HOME unit inspections through updated Tenant Selection Plans and tags in property management software, ensuring proper documentation of inspection results and scheduling of subsequent inspections according to required frequencies (annual, biennial, or triennial). Procedures will also be formalized for saving inspection reports. Corrective actions will continue to be entered into current property management software. Additionally, staff will receive training on inspection compliance and documentation requirements to ensure consistent and accurate recordkeeping. Implementation and utilization of partner provided portals will allow for easier tracking and reporting of HOME units.