Finding Text
2023-014 Housing Quality Standards Inspections for the HOME Program Federal Program Information Federal Agency: U.S. Department of Housing and Urban Development Award Name(s): HOME Investment Partnerships Program Assistance Listing Number(s): 14.239 Award Year: 2023 Compliance Requirement: Special Tests and Provisions Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Auditor performed inquiries with City management who confirmed finding 2022-008 was still in place in 2023. Finding has been carried forward from fiscal year 2022 single audit report. Per the HOME Program Compliance Supplement: 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 and Context In prior year testing of the program, it was noted that no inspections or reviews were performed during fiscal year 2022 for properties which received HOME funds and were within the period of affordability. Management confirmed this was not remediated in fiscal year 2023. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Cause Required inspections were not completed during the fiscal year for properties within the period of affordability. Effect or Potential Effect • Noncompliance with Housing Quality Standards requirements per Uniform Guidance and HUD. • Providing funding to households or individuals that do not meet the continuing compliance requirements. • Potential loss or reduction of federal funding in the future due to noncompliance. Questioned Costs No questioned costs are reported. Identification as a Repeat Finding This is a repeat of prior year finding 2022-008. Recommendation The City should implement a system to track required inspections on all properties that are within the period of affordability to ensure continuing compliance requirements are met. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.