Finding 1175444 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-02-26
Audit: 389242
Organization: Round Rock Housing Authority (TX)

AI Summary

  • Core Issue: Seven housing units failed to meet Housing Quality Standards (HQS) for months without initiating rent abatement.
  • Impacted Requirements: The PHA did not comply with federal regulations requiring timely inspections and enforcement actions for life-threatening and non-life-threatening deficiencies.
  • Recommended Follow-Up: Strengthen monitoring procedures, enhance staff training on compliance, and establish regular audits to ensure adherence to HQS enforcement.

Finding Text

Program Name Housing Choice Vouchers "Internal Control" Significant Deficiency N Special Tests ALN(s) 14.871 2025-001 HQS Enforcement Criteria For units under HAP contract that fail to meet HQS, if the reported deficiency is life-threatening, the PHA must, within 24 hours of notification, both inspect the housing unit and notify the owner if the life-threatening deficiency is confirmed. The owner must then make the repairs within 24 hours of PHA notification. If the reported deficiency is non-life-threatening, the PHA must, within 15 days of notification, both inspect the unit and notify the owner if the deficiency is confirmed. The owner must then make the repairs within 30 days of notification from the PHA or within any PHA-approved extension. (24 CFR section 982.405(d)). 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 audit, we identified seven (7) failed HQS that did not receive a pass for several months and no rent abetment process was started or enforced during that time period. Context The HQS population was 168 failed inspection. We selected a sample of 17 inspection and identified of those 17 reviewed, 7 did not obtain a re-inspection pass within the Criteria noted above and no rent abetment process was enforce on landlord. Cause The non-compliance appears to stem from oversight or procedural lapses in the enforcement of HQS within the Housing Voucher Cluster program. This may be due to inadequate training, monitoring, or failure to adhere to established protocols. Effect The Authority is non‐compliant with the federal regulations over this federal program, this could potentially result in operating and financial penalties. Recommendations Implement more stringent procedures for monitoring HQS compliance, including timely reinspection and enforcement of HAP abatement or voucher cancellation. Enhance training for staff involved in the HQS process to ensure a thorough understanding of compliance requirements. Establish a system of regular audits to identify and rectify lapses in HQS enforcement promptly. Management Views The auditee acknowledges the deficiency in enforcing Housing Quality Standards (HQS) as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive Corrective Action Plan.

Corrective Action Plan

At the time of the most recent independent audit by Smith Marion conducted in December 2025, it was found that RRHA was not completing voucher re-inspections within the required timeframe when an inspection failed. Health and safety inspections are required to be reinspected within 48 hours, and other inspections must be completed within 30 days. In the past RRHA only had one inspector on staff who tracked all inspections. Due to an increase in portability vouchers a second caseworker was hired in 2025. However, a new system was not created to track both caseworker’s inspections. This resulted in RRHA overlooking timelines and not completing inspections in a timely manner as required. Part of this was also related to miscommunication between the two case workers. To ensure inspections are completed as required by HUD regulation, in the future, each caseworker/inspector is now required to schedule a follow-up inspection appointment at the same time as the failed inspection report is created. Additionally, a separate shared spreadsheet has been created to track failed inspection and verify that each one is being completed within the required time. With these new steps in place we can indicate if a failed inspection needs a 24-hour and/or a 30- day re-inspection and if a follow-up inspection has been already scheduled. RRHA also increased the scheduled time/ days from once a week to two days a week for inspection since we now have two HCV employees/ inspectors available. Effective immediately the process for inspection has been updated and both HCV employees are completing inspections.

Categories

HUD Housing Programs Internal Control / Segregation of Duties Subrecipient Monitoring Significant Deficiency

Other Findings in this Audit

  • 1175445 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $1.63M
14.850 PUBLIC HOUSING OPERATING FUND $130,486
14.872 PUBLIC HOUSING CAPITAL FUND $832