Finding Text
Internal Controls Over HQS Failed Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 8 Housing Choice Vouchers Assistance Listing Number: 14.871 Federal Award Identification Number and Year: Passthrough Funds Pass-Through Agency: BCHA and WHEDA Pass-Through Number(s): BCHA – WI 186; WHEDA – WI 901 Award Period: January 1, 2024 – December 31, 2024 Compliance Requirement: Special Tests – HQS Failed Inspections Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matter Criteria or specific requirement: Per CFR Sections 982.158(d) and 982.404, for units under HAP contract that fail to meet HQS, the Organization 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. 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. Condition: During our testing, we noted six tenants who had failed inspections where HAP was not appropriately abated or the tenant was not terminated from the program. Questioned costs: $130 Context: From a sample of 60 failed HQS inspections selected for testing, six had issues where HAP was not appropriately abated or not terminated. One tenant was properly abated, but the tenant still received HAP payments after abatement. Two tenants were not terminated, but no passed inspections were available. One tenant did not have a re-inspection completed and the tenant still received HAP. Two tenants did not have fail letters sent and no re-inspections but still received HAP. Cause: Errors and miscommunication occurred by or between the housing inspectors and/or housing specialists. The Organization’s standard operating procedures that are listed in their administrative plan were not being followed. Effect: A program participant could receive HAP or the Utility Allowance when they were not qualified due to the unit not passing the HQS inspection. The units may not have the appropriate repairs completed in a timely manner. Repeat finding: Yes Recommendation: We recommend that Management review their current internal control process over failed HQS inspections and HAP/Utility Allowance abatements to ensure they have a process in place to identify errors before the payments go out. We recommend that additional training occur over the HQS process to ensure that all housing specialists and housing inspectors are following the administrative plan. Views of responsible officials: There is no disagreement with the audit finding. Refer to the Organization’s Corrective Action Plan for more information.