Finding Text
Finding 2025-002 N. Special Tests and Provisions: N16. Environmental Contaminants Testing and Remediation Identification of the Federal Program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Assistance Listing Number: 14.881 Federal Program Name: Moving to Work (MTW) Demonstration Program Public and Indian Housing (Public Housing) Program Year: January 1, 2025 through December 31, 2025 Program No.: IL002-01-00025D Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, “The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 24 CFR section 5.703 states, “To ensure that all residents live in safe, habitable dwellings, the items and components located inside the building, outside the building, and within the units of HUD housing must be functionally adequate, operable, and free of health and safety hazards. The standards under this section apply to all HUD housing.” Condition: Forty failed uniform physical condition standards (UPCS) inspections and 40 failed environmental inspections were selected for compliance testing out of the total 5,997 failed UPCS inspections and 1,108 failed environmental inspections, respectively, reported by the Authority. Internal controls were not in place to ensure that failed UPCS and environmental inspections were remediated or remediated timely. For 33 of the 40 (82.5%) failed UPCS inspections and 39 of the 40 (97.5%) failed environmental inspections tested for compliance, the Authority did not maintain adequate supporting documentation to evidence that the safety/environmental concern from the failed inspection was remediated or remediated in a timely manner. The nature of the issues is as follows: • For four failed UPCS inspections sampled, remediation was not completed. • For 22 failed UPCS inspections sampled, remediation was not completed timely. • For seven failed UPCS inspections sampled, part of the remediation was not completed and the other part was not completed timely. • For 39 failed environmental inspections sampled, the remediation was not completed in a timely manner. Cause: Internal controls were not in place over the follow-up of work orders related to failed UPCS and environmental inspection reports to ensure the identified safety/environmental concerns were remediated or remediated in a timely manner. Effect or Potential Effect: HUD housing may not meet the physical condition standards and environmental contaminants may not be remediated or remediated timely. Questioned Costs: None. Context: The Public Housing program had a total of 15,926 UPCS inspections performed during the year ended December 31, 2025, of which 5,997 were failed inspections that required remediation, 6,029 passed or passed with comments, 3,336 were inconclusive, 560 were canceled, and 4 were no show. The Public Housing program had a total of 1,108 environmental inspections performed during the year ended December 31, 2025. Identification as a Repeat Finding, if Applicable: This finding is a repeat of finding 2024-002 from the prior year. Recommendation: The Authority should implement internal controls over the monitoring of failed UPCS and environmental inspections to ensure that identified safety/environmental concerns are remediated or remediated in a timely manner. Adequate supporting documentation should be maintained of all remediation activities. Views of Responsible Officials: CHA Management agrees and had recently implemented and staffed a Green and Healthy Homes initiative that is actively addressing these concerns with subject matter experts. Specifically, the CHA will further reinforce environmental and inspection-related compliance by strengthening work-order controls, formalizing standard operating procedures, expanding environmental vendor oversight, and delivering ongoing training and quality-assurance reviews.