Finding Text
Finding 2025-003 Significant Deficiency: Special Tests and Provisions – Compliance and Control Finding ALN 14.871 – Section 8 Housing Choice Vouchers Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A - Direct Award Criteria Or Specific Requirement: Public Housing Authorities (PHAs) are required to perform routine inspections to determine if the unit meets the Housing Quality Standards (HQS) set by HUD. Per the Authority’s Administrative Plan, HQS inspections must be conducted on an annual basis. Condition: The Authority failed to perform an annual reinspection of a participant’s unit within 1 year of the previously performed HQS inspection. Cause: The control in place did not ensure timely inspection of the unit. Effect: The possibility exists that noncompliance with federal requirements could go undetected regarding compliance relating to direct and material compliance requirements. Questioned Costs: None Context: Of the 40 units tested, 2 met the criteria for HQS inspections that were not performed within 1 year of the previous HQS inspection, as required by the Administrative Plan. Identification As A Repeat Finding: Not applicable Recommendations: We recommend that the Authority strengthen its Housing Quality Standards (HQS) inspection process to ensure all units are inspected in accordance with the Administrative Plan of the Authority. View of Responsible Officials: To address this compliance and control deficiency, MCHA will implement biennial inspections to ensure each HCV unit is inspected at least once every 24 months in accordance with HUD requirements. Although HUD revised the federal inspection standard from annual to biennial inspections in 2016, MCHA's Administrative Plan continued to require annual inspections until the adoption of a biennial inspection policy in July 2025. To strengthen internal controls and ensure compliance with inspection timeframes, MCHA will maintain an inspection-due report to track all HCV units, monitor upcoming inspection deadlines, and ensure inspections are scheduled and completed before the applicable 24-month requirement. Management will review the report regularly to identify units approaching their inspection due dates and prevent any unit from exceeding the required inspection cycle.