Finding 12220 (2022-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-07-27

AI Summary

  • Core Issue: Metro West Housing Solutions failed to conduct re-inspections within 30 days for 6 properties that did not meet housing quality standards.
  • Impacted Requirements: Compliance with federal regulations requiring timely re-inspections for properties receiving Housing Assistance Payments (HAP).
  • Recommended Follow-Up: Management should improve internal controls over inspections to ensure compliance and prevent future issues.

Finding Text

2022-001 - Direct Program Department of Housing and Urban Development Federal Financial Assistance Listing #14.871 Section 8 Housing Choice Vouchers Program Special Tests and Provisions: Housing Quality Standards Failed Inspections Material Weakness Criteria: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Section 8 Housing Assistance Payments (HAP) grant requires that recipients perform inspections of properties where tenants receiving HAP reside and when inspections fail, re-inspections must be performed within 30 days for non-life-threatening issues. Condition: Metro West Housing Solutions did not perform re-inspections of 6 failed inspections within the prescribed 30-day HAP requirement during 2022. Cause: Controls over inspections that are a part of special tests and provisions were not properly designed to ensure that re-inspections of properties occurred within 30 days of a failed inspection, thus resulting in a deficiency of internal control. Effect: Metro West Housing Solutions could be issuing HAP for properties that are not up to code or potentially dangerous for their recipients if inspections fail and re-inspections are not occurring timely. Questioned Costs: None Context/Sampling: We initially tested 10% of the failed inspections during 2022 but expanded our sample to cover 20% of the failed inspections based on maximum risk of material noncompliance resulting from the 3 errors identified. We noted an additional 3 errors from our expanded sample. Repeat Finding from Prior Year(s): No Recommendation: We recommend management revisit controls over inspections and special tests and provisions to correct this matter and ensure no further findings occur. Views of Responsible Officials: Agree

Corrective Action Plan

Department of Housing and Urban Development Federal Financial Assistance Listing #14.871 Section 8 Housing Choice Vouchers Program Special Tests and Provisions: Housing Quality Standards Failed Inspections Material Weakness Finding Summary: Metro West Housing Solutions did not perform re-inspections of 6 failed inspections within the prescribed 30-day HAP requirement during 2022. Responsible Individuals: Tillie Wright, HCV Administrator Corrective Action Plan: It was decided that adding back the position of in-house full-time inspector and an additional Section 8 Housing Specialist was the step needed to better keep on top of inspections. The inspector was hired on 6/22/2023 and started work on 07/10/2023. He has passed his HQS training test. In addition, he, and HCV Administrator both did a short training on the Inspection Module through Yardi. He is currently shadowing the former in-house inspector who is employed at MWHS in a different position. Once the new inspector is fully trained, the HCV Administrator plans to shift some responsibilities over to him, including scheduling and coordination of inspections both in house and 3rd party, insuring all the PIC submissions are entered, and monitoring all failed inspections. The Section 8 team was short staffed most of 2022. They will be fully staffed including the additional team member on 8/13/2023 when two new hires start. Anticipated Completion Date: We anticipate the inspector will be fully trained by mid-August 2023 and after training will slowly start taking over duties from the HCV Administrator over the next 30 days. The two new Specialists should be trained by the end of September and staff case loads will be redistributed in the next few months following that.

Categories

HUD Housing Programs Material Weakness Special Tests & Provisions Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 588662 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $15.96M
14.275 Housing Trust Fund $159,000
14.218 Community Development Block Grants/entitlement Grants $30,000
14.239 Home Investment Partnerships Program $1,000