Finding Text
2024-009 – Special Tests and Provisions – Internal Control and Compliance over Housing Quality Standards Assistance Listing Number: 14.239 Assistance Listing Title: HOME Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: M-17-MC-06-0221, M-21-MC-06-0221, M-22-MC-06-0221, M-21- MP-06-0221 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to 24 CFR 92.209(i), 92.251(f), and 92.504(d), 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/HOMEARP- assisted tenant-based rental assistance to determine compliance with housing quality standards. Condition: During our audit, we noted that the City has not performed any housing inspections required under the HOME Investment Partnerships Program since 2019, citing staff shortages as the reason for nonperformance. Cause: The City did not perform housing inspections due to staffing issues and lack of adequate resources allocated to the compliance function. Effect or Potential Effect: Failure to conduct required housing inspections increases the risk that HOME-assisted units do not meet federal property standards, potentially resulting in noncompliance with program requirements and exposure to questioned costs or repayment obligations. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: The City should implement procedures to ensure timely housing inspections in accordance with HOME Program requirements. This includes allocating sufficient staff resources, establishing a monitoring schedule, and documenting all inspections performed. If staffing limitations persist, the City should consider temporary contracting or interdepartmental support to meet compliance obligations. Views of Responsible Officials: Management concurs with the finding.