FAC Explorer

Finding 1238684 (2025-011)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-09-30
Audit: 413594
Organization: HOUSING AUTHORITY OF THE CITY OF LITTLE ROCK, ARKANSAS (CA)
Auditor: NOVOGRADAC & COMPANY LLP

AI Summary

  • Core Issue: The Authority failed to conduct and document required inspections for Housing Quality Standards (HQS), leading to material non-compliance.
  • Impacted Requirements: Annual inspections and timely correction of deficiencies were not met, resulting in questioned costs of $44,299.
  • Recommended Follow-Up: Hire and train personnel on HQS enforcement to ensure compliance with program requirements and improve internal controls.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Choice Vouchers Federal Catalog Numbers: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – HQS Enforcement Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the Housing Quality Standards (HQS) and the Authority must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority was unable to provide support for several failed inspection selections. The Authority was also unable to provide a failed inspections listing for January through May 2025. Context: Of a sample size of twenty-five (25) units the Authority was unable to provide the following: Failed inspections for six (6) units Passed inspections for nineteen (19) units Proof of abatement or extension for two (2) units Known Questioned Costs: $44,299* * Represents HAP attributable to twenty-one (21) failed units for which the Authority could not demonstrate compliance with the HQS enforcement requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with the units that remained in noncompliance beyond the required HQS enforcement date. Cause: There is a material weakness in internal controls over compliance for the special tests and provisions type of compliance related to HQS enforcement. The Authority has not properly performed or kept record of HQS inspections in compliance with program requirements. Effect: The Housing Voucher Cluster Programs are in material non-compliance with the special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on HQS enforcement that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.

Corrective Action Plan

The Authority has recognized the deficiencies in the Housing Voucher Cluster Programs and will train staff on HQS enforcement and implement internal control procedures that will ensure compliance with federal regulations. Dexter Brady, Interim Executive Director, is the responsible official and this will be completed by December 31, 2026.

Categories

HUD Housing Programs Special Tests & Provisions Eligibility Material Weakness

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
  • 1238680 2025-007
    Material Weakness Repeat
  • 1238681 2025-008
    Material Weakness Repeat
  • 1238682 2025-009
    Material Weakness Repeat
  • 1238683 2025-010
    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