Finding Text
HQS Inspections - N Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: The PHA must inspect the unit leased to a family at least biennially 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: The Commission did not follow its policies and procedures designed to ensure HQS inspections were performed timely. 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 delay was attributable to the Authority, the landlord, or the participant. 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: During testing of 60 tenant files, exceptions were noted in the following: - 10 units sampled were not inspected on a biennial basis - 3 units were not inspected at least 2 years prior to the HUD-50058’s effective date that was selected for testing Cause: The Commission did not work closely with the third party inspection company to ensure inspections were being performed timely. Effect: The Commission is not in compliance with HUD requirements. This could have an impact on HAP calculations. Repeat finding: Yes, 2024-002 Recommendation: We recommend the Commission review its HQS inspection policies and procedures and discuss these standards with the third-party inspection company that it utilizes for these inspections to ensure all inspections are performed timely and that all necessary documentation is maintained for each inspection. Views of responsible officials: There is no disagreement with the audit finding.