Finding Text
2024-006: Housing Quality Standards Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Choice Housing Vouchers Assistance Listing Number: 14.871 Federal Award Identification Number and Year: CA103AF0154-0160, CA103AFR323, CA103EH0005-0006, CA103VO0201-0206, CA103VO0208-0211, and CA103VOPR23; All 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement Affected: N Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: The Public Housing Agency (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)). For units under a Housing Assistance Payments (HAP) contract that fail to meet HQS, the PHA must require the owner to correct any life threatening deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract (24 CFR sections 982.158(d) and 982.404). Condition: For one of the HQS reinspections tested, the City-prepared reinspection listing indicated that the reinspection occurred within the required timeframe. However, upon review of the tenant file and underlying support, it was determined that the reinspection did not take place. For two of the HQS failed inspections tested, the City should have abated payments in accordance with the City's Administrative Plan due to owner failure to correct deficiencies in a timely manner. No documentation was maintained to explain why abatement did not occur or whether follow-up inspections were properly extended. Questioned Costs: Below $25,000. Context: 5 HQS reinspections out of a population of 15, and 8 failed inspections out of a population of 32, were selected for testing. Cause: Due to staff turnover in the Housing Department, the same employee who selected the HQS re-inspections/failed inspections for testing, also performed the re-inspections/failed inspections. There was no indication of another person reviewing the documentation to ensure completeness and compliance with the requirements. Effect: The City was not in compliance with the requirements of Housing Quality Standards for inspections and enforcement. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the City review and update internal controls to ensure that supporting documentation for re-inspections and failed inspections is complete and properly reviewed and maintained. Views of Responsible Officials and Corrective Action: Management agrees with this finding. The RBHA is updating the administrative policy which includes a timeline for inspection follow-up within 30 days and scheduling re-inspections within five business days from the date requested. The revised policies include a description of the types of inspections to be conducted by the Housing Authority, the steps that will be taken when units fail, and identifies conditions which are considered to be life-threatening. The current RBHA staff will review and implement the revised policies to ensure inspections are completed in a timely manner and proper follow up is administered. The Housing Manager is already implementing protocols for the review and approval of inspections conducted by staff to ensure compliance. In addition, quality control inspections are regularly conducted by a Team Lead, a process that is also required for the annual Section Eight Management Assessment Program (SEMAP) submitted to HUD. The updated administrative policies include a chapter for the National Standards for the Physical Inspection of Real Estate (NSPIRE) that will sunset and replace the Housing Quality Standards (HQS) inspection process scheduled for February 1, 2027.