Finding Text
HVC HQS Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: NE 001; 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: Out of 60 tenant files tested for annual HQS inspections, 8 tenant files contained exceptions. Questioned Costs: None identified. The Authority did not complete the annual HQS inspection within the required timeframe for the unit tested. While this represents noncompliance with program requirements, we did not perform procedures to determine whether the unit failed to meet HQS. As a result, we did not determine whether HAP payments made during the period of noncompliance were unallowable. Accordingly, questioned costs could not be determined. Context: Out of the testing of 60 tenant files for annual HQS inspections, there were 8 instances where the unit was not inspected on an annual basis. Cause: The Authority failed to follow its Administrative Plan of inspecting units on an annual basis. Effect: The Authority is not in compliance with federal regulations regarding HQS inspection requirements determined by HUD and it’s Administrative Plan. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2024-005. Recommendation: We recommend the Authority implement controls to ensure that all units are inspected annually or to update its Administrative Plan to inspect units on a biennial basis. We recommend the Authority hire an outside firm to perform inspections if there is not any internal capacity. Views of Responsible Officials: There is no disagreement with the audit finding.