Finding 1238680 (2025-007)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-09-30

AI Summary

  • Core Issue: The Authority failed to conduct timely Housing Quality Standards (HQS) inspections, resulting in material non-compliance.
  • Impacted Requirements: Biennial inspections and quality control re-inspections were not performed as required, leading to missing inspection reports.
  • Recommended Follow-Up: Hire and train staff on HQS requirements to ensure compliance with federal guidelines and improve internal controls.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and ProvisionsCriteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family biennially in order to determine if the unit meets HQS standards, 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)). These inspection reports are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management there were inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of thirty-four (34) units, twenty-eight (28) units did not have annual HQS inspections performed timely or the Authority was unable to provide proof of inspection. Our sample size is statistically valid. Known Questioned Costs: $186,757* * Represents HAP attributable to twenty-eight (28) tenant files for which the Authority could not demonstrate compliance with HQS requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with the unit that remained in noncompliance beyond the required HQS date. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed HQS inspections in compliance with program requirements. Effect: The Housing Voucher Cluster programs are in material non-compliance with the with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on HQS requirements that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.

Corrective Action Plan

The Authority acknowledges the inspection and enforcement deficiencies identified in this finding. The inspection department and Housing Choice Voucher management are coordinating to ensure that units requiring abatement after a failed inspection and the applicable correction period are properly identified, documented, and processed. The Authority is also working with the HUD Receiver to develop a scope of work to address outstanding historical files and to determine which remediation activities will be performed internally and which may require third-party assistance. Dexter Brady, Interim Executive Director, is the responsible official and this will be completed by December 31, 2026.

Categories

Special Tests & Provisions Eligibility HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1238667 2025-006
    Material Weakness Repeat
  • 1238668 2025-007
    Material Weakness Repeat
  • 1238669 2025-008
    Material Weakness Repeat
  • 1238670 2025-009
    Material Weakness Repeat
  • 1238671 2025-010
    Material Weakness Repeat
  • 1238672 2025-011
    Material Weakness Repeat
  • 1238673 2025-006
    Material Weakness Repeat
  • 1238674 2025-007
    Material Weakness Repeat
  • 1238675 2025-008
    Material Weakness Repeat
  • 1238676 2025-009
    Material Weakness Repeat
  • 1238677 2025-010
    Material Weakness Repeat
  • 1238678 2025-011
    Material Weakness Repeat
  • 1238679 2025-006
    Material Weakness Repeat
  • 1238681 2025-008
    Material Weakness Repeat
  • 1238682 2025-009
    Material Weakness Repeat
  • 1238683 2025-010
    Material Weakness Repeat
  • 1238684 2025-011
    Material Weakness Repeat
  • 1238685 2025-012
    Material Weakness Repeat
  • 1238686 2025-013
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $704,503
14.879 MAINSTREAM VOUCHERS $696,886
14.249 SECTION 8 MODERATE REHABILITATION SINGLE ROOM OCCUPANCY $477,839
14.850 PUBLIC HOUSING OPERATING FUND $401,616
14.872 PUBLIC HOUSING CAPITAL FUND $35,021