Finding 1230006 (2025-009)

Finding 2025-009: Noncompliance – Special Tests and Provisions Federal Program Information Assistance Listing Number: 14.871 Program: Housing Choice Voucher Cluster Criteria: Housing authorities administering the Housing Choice Voucher Program are required to comply with Special Tests and Provisions established by HUD. These requirements include maintaining adequate documentation supporting the management of the waiting list, performing annual reviews of utility allowances, and conducting Housing Quality Standards (HQS) quality control inspections in accordance with HUD requirements. Effective compliance procedures should ensure these activities are performed and documented timely. Condition: During our testing of Special Tests and Provisions requirements for the Housing Choice Voucher Program, we identified the following instances of noncompliance: • The Agency did not maintain adequate documentation supporting the administration of its waiting list. • The Agency did not perform and document the required annual utility allowance review during 2025. • The Agency did not perform required HQS quality control inspections. These deficiencies indicate that required compliance procedures were not consistently performed and monitored during the year. Cause: The Agency did not establish adequate procedures to ensure compliance with Special Tests and Provisions requirements of the Housing Choice Voucher Program. Compliance activities were not subject to sufficient supervisory review or monitoring, and management did not adequately ensure required documentation was maintained. In addition, the Agency's compliance system relied heavily on employee knowledge and experience rather than documented procedures and formal oversight. Effect: Failure to maintain waiting list documentation reduces transparency and limits the Agency's ability to demonstrate that applicants are selected and housed in accordance with HUD requirements. Failure to perform utility allowance reviews increases the risk that participant assistance calculations may be based on outdated utility cost information. Failure to perform HQS quality control inspections limits management's ability to verify that inspection activities are being completed in accordance with HUD requirements and may result in deficiencies remaining undetected. Recommendation: We recommend the Agency: 1. Establish written procedures addressing all Special Tests and Provisions requirements applicable to the Housing Choice Voucher Program. 2. Maintain documentation supporting waiting list management activities and decisions. 3. Perform and document annual utility allowance reviews in accordance with HUD requirements. 4. HQS quality control inspections. 5. Implement supervisory review procedures to periodically verify compliance with these requirements. 6. Report compliance monitoring results to management and the Board of Commissioners on a regular basis. Views of Responsible Officials: The Housing Agency agrees with the finding.