Finding 1206654 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-04-15
Audit: 398782
Organization: Blue Earth County (MN)
Auditor: ABDO LLP

AI Summary

  • Core Issue: The EDA did not follow reinspection rules for housing units that failed initial inspections.
  • Impacted Requirements: Housing units must be reinspected within 30 days as per Uniform Guidance and Housing Quality Standards.
  • Recommended Follow-Up: Improve tracking and scheduling processes, and provide training to staff on reinspection timelines to ensure compliance.

Finding Text

HQS Enforcement U.S Department of Housing and Urban Development Section 8 Housing Choice Voucher Program 14.871 Condition: The EDA failed to comply with Uniform Guidance requirements related to Housing Quality Standards (HQS) reinforcements. Specifically, two housing units that failed initial inspections did not undergo the required reinspections, and one housing unit was reinspected beyond the mandated 30-day timeframe. Criteria: According to the Uniform Guidance (2 CFR Part 200) and applicable sections on Housing Quality Standards, any housing unit that fails an initial inspection must be reinspected within a 30-day period to ensure compliance with HQS and address any deficiencies identified. Cause: The non-compliance appears to stem from a lack of robust tracking and scheduling mechanisms within the EDA's inspection department. Additionally, there may have been insufficient staffing or inadequate training regarding the importance of adhering to the reinspection timelines specified in the Uniform Guidance Effect: Non-compliance with HQS reinspection requirements can result in potential safety and habitability risks for tenants residing in units that do not meet established standards. Moreover, the failure to adhere to federal guidelines may jeopardize the EDA's eligibility for federal funding or lead to financial penalties, impacting the agency's ability to support housing initiatives effectively.

Corrective Action Plan

HQS Enforcement CORRECTIVE ACTION PLAN (CAP): Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Actions Planned in Response to Finding: To address the issues identified and prevent recurrence, the EDA has implemented the following corrective actions: 1. StaffingA new rental housing inspector has been hired. The position has been converted from part-time to full-time, allowingadequate time for the inspector to monitor inspection timelines, complete required inspections and reinspections, andensure timely reporting and compliance with program requirements. 2. Training and CertificationStaff completed training on new inspection guidelines and protocols in March 2024. Certification in both HQS andNSPIRE inspection standards are currently underway for the new inspector. This training will ensure the inspector isfully knowledgeable of federal inspection requirements, documentation standards, and required compliancetimelines. 3. Improved Inspection Monitoring and DocumentationThe EDA has strengthen internal procedures for scheduling and tracking inspections and reinspections within theinspection software to ensure all failed inspections are documented and scheduled for reinspection within therequired timeframe. 4. Transition to Electronic Inspection ReportingThe EDA requires the use of iPad-based electronic inspections rather than paper inspection forms. This changeprovides real-time documentation, ensure inspections are entered directly into the tracking system, and reduce therisk of inspections being completed but not logged. 5.Compliance Notification and Payment ControlsA formal procedure has been established to notify appropriate staff in the event of inspection non-compliance. Underthis procedure, Housing Assistance Payments (HAP) will be held until compliance is achieved or the tenant has movedfrom the unit, consistent with program regulations. Management believes these corrective actions will strengthen internal controls over the inspection process, improve documentation and tracking, and ensure compliance with HUD Housing Quality Standards requirements moving forward. The EDA will continue to monitor inspection activities to maintain safe and habitable housing conditions for program participants. Official Responsible for Ensuring CAP: Nicole Cunningham, Housing Coordinator, is the official responsible for ensuring corrective action.

Categories

HUD Housing Programs Eligibility

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $653,872
14.872 PUBLIC HOUSING CAPITAL FUND $269,769
14.850 PUBLIC AND INDIAN HOUSING $237,873