Finding 1201230 (2025-003)

Prior Year Finding: No Federal Agency: Department of Housing and Urban Development Federal Program: Housing Opportunities for Persons with Aids City Department: Mayor’s Office of Housing (MOH) Assistance Listing Number: 14.241 Federal Award Number and Year: MAH21-F001 (8/6/2021-8/6/2024) MAH22-F001 (8/22/2022-8/22/2025) MAH23-F001 (7/13/2023-7/13/2026) MAH24-F001 (9/9/2024-9/9/2027) Compliance Requirement: Special Tests and Provisions – Housing Quality Standards Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 24 CFR sections 574.310(b)(1)-(2), the following standards apply for all housing for which HOPWA funds are used under § 574.300(b)(3), (4), (5), and (8). 1) State and local requirements. Each recipient of assistance under this part must provide safe and sanitary housing that is in compliance with all applicable State and local housing codes, licensing requirements, and any other requirements in the jurisdiction in which the housing is located regarding the condition of the structure and the operation of the housing. 2) HUD housing standards. Except for such variations as are proposed by the grantee and approved by HUD, the housing must meet the standards for HUD housing in 24 CFR 5.703, except that: i. As applied to HOPWA, “HUD housing” in 24 CFR 5.703 means the units eligible persons occupy or will occupy, systems equipment that directly services those units, items and components within the primary and secondary means of egress from those units' doors to the public way, and common features related to the residential use of the building (e.g., the laundry room, community room, mail room). ii. Housing that continues to meet the HOPWA housing quality standards that applied when the eligible person(s) moved into that housing shall not be required to meet new or different standards under 24 CFR 5.703. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: MOH did not perform required housing quality inspections. Context: For seven of nine housing units selected for testing, MOH did not perform the required housing quality inspections. Cause: MOH’s procedures and internal controls were not sufficient to ensure that all required housing quality inspections were performed. Effect: Not performing the required housing quality inspections may result in the City providing support for housing units that do not meet housing quality standards. Questioned costs: Undetermined. Recommendation: We recommend MOH review and enhance internal controls and procedures to ensure that required inspections are performed timely. Views of responsible officials: Management agrees with the finding.