Finding Text
Finding 2025-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Project-Based Cluster - Project Based Rental Assistance Federal Assistance Listing Numbers: 14.195 Noncompliance - N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards. The PHA must provide housing that is decent, safe, and sanitary. To achieve this end, the PHA must perform housing quality inspections at the time of initial occupancy and at lease annually thereafter to ensure that the units are decent, safe, and sanitary (24 CFR section 574.310(b)(1)-(2)). Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that were not inspected within the annual inspection period. Context: There are approximately one hundred eighty eight (188) Project Based Rental Assistance units. Of a sample size of twelve (12) tenant files, nine (9) annual inspections were not completed in a timely manner. Our sample size is statistically valid. Known Questioned Costs: $33,381 Cause: There is a material weakness in internal controls for the Project Based Rental Assistance program over the compliance for the special tests and provisions type of compliance related to housing quality standards. The Authority has not properly performed annual inspections in compliance with program requirements. Effect: The Project Based Rental Assistance program is in material non-compliance with the special tests and provisions type of compliance related to housing quality standards. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.