Finding Text
Finding 2025-003 N. Special Tests and Provisions: N4. NSPIRE/Housing Quality Standards Inspections Identification of the Federal Programs: 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 Section 8 – Housing Choice Vouchers (HCV) and Rental Assistance Demonstration (RAD) Program Year: January 1, 2025 through December 31, 2025 Program No.: Multiple Federal Assistance Listing Numbers: 14.871 and 14.879 Federal Program Name: Housing Voucher Cluster Section 8 – Housing Choice Vouchers (HCV) – Veterans Affairs Supporting Housing and Emergency Housing Vouchers Mainstream Vouchers Program Year: January 1, 2025 through December 31, 2025 Program No.: Multiple 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).” “MTW Agencies must ensure that housing assisted under the demonstration program meets housing quality standards established or approved by the Secretary. The HCV program regulations at 24 CFR sections 982.401 through 982.405 set forth basic housing quality standards (HQS) which all units must meet, and the PHA must verify by inspection, before initial assistance can be paid on behalf of a family and at least annually throughout the term of the assisted tenancy. Current HQS regulations consist of 13 key aspects of housing quality, performance requirements, and acceptability criteria to meet each performance requirement. HQS include requirements for all housing types, including single and multi-family dwelling units, as well as specific requirements for special housing types, such as manufactured homes, congregate housing, single room occupancy, shared housing, and group residences (Section 204(c)(3)(E) of Pub. L. No. 104-134 (42 USC 1437f (note))).” “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)).” The Authority performs inspections biennially, as per the Authority’s approved HCV Administrative Plan. Condition: MTW Demonstration Program – For 11 of 40 (27.5%) inspections sampled to test the Authority’s internal controls to ensure inspections are completed in accordance with the Authority’s HCV Administrative Plan and meet housing quality standards (HQS), we noted that the inspections completed by the Compliance Specialist in fiscal year 2025 were not conducted in accordance with the required biennial time frame. Based on the date of the prior inspections, the inspections were not conducted within the two years required by the HCV Administrative Plan. Housing Voucher Cluster – For 7 of 40 (17.5%) inspections sampled to test the Authority’s internal controls to ensure inspections are completed in accordance with the Authority’s HCV Administrative Plan and meet housing quality standards (HQS), we noted that the inspections completed by the Compliance Specialist in fiscal year 2025 were not conducted in accordance with the required biennial time frame. Based on the date of the prior inspections, the inspections were not conducted within the two years required by the HCV Administrative Plan. Cause: MTW Demonstration Program and Housing Voucher Cluster – The Authority’s internal control, whereby a knowledgeable Compliance Specialist (i.e., Inspector) performs a biennial inspection of the unit and completes a standardized inspection checklist to confirm the unit meets the housing quality standards, was not operating effectively during the fiscal year. Effect or Potential Effect: MTW Demonstration Program and Housing Voucher Cluster – HQS inspections may not be conducted biennially in accordance with the Authority’s HCV Administrative Plan. Questioned Costs: MTW and Housing Voucher Cluster – None. Context: MTW Demonstration Program – There were 27,055 HQS inspections for the HCV program under the MTW during the fiscal year ended December 31, 2025. Housing Voucher Cluster – There were 1,723 HQS inspections for the Housing Voucher Cluster programs during the fiscal year ended December 31, 2025. Identification as a Repeat Finding, if Applicable: MTW Demonstration Program – The finding is a repeat of finding 2024-004 from the prior year. Housing Voucher Cluster – This finding is not a repeat finding from the prior year. Recommendation: MTW Demonstration Program and Housing Voucher Cluster – The Authority should follow its established internal control over HQS inspections as outlined in its HCV Administrative Plan. Views of Responsible Officials: CHA Management generally agrees and noted that CHA personnel were generally found to be consistent and timely in requesting tenants to engage in the inspection process. The delays were primarily attributed to tenant failures to respond. Nevertheless, the CHA will ensure HQS/NSPIRE inspections are scheduled and completed on a timely basis by reviewing contractor processes, updating guidance, and using Yardi/Power BI reporting to monitor compliance.