Finding Text
Finding 2025-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance - N. Special Tests and Provisions – Housing Quality Standards Inspections Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. 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 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)). 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 discussion with management, there were units that failed inspections that did not pass reinspection within 30 days without penalty. Context: There are approximately five hundred ninety four (594) Housing Voucher Cluster units with failed inspections. Of a sample size of twenty five (25) failed inspections, one (1) unit did not pass reinspection within 30 days. Housing assistance payments were not abated and the tenant was not relocated in a timely manner. Our sample size is statistically valid. Known Questioned Costs: Below $25,000 threshold. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to housing quality standards inspections. The Authority's oversight and supervisory review procedures are not adequately structured to detect or prevent delays in reinspection and enforcement of HQS requirements. Effect: Due to the breakdown in internal controls over HQS inspection follow-up, at least one sampled unit did not receive a timely reinspection within the required 30-day timeframe following an initial failed inspection. This resulted in continued Housing Assistance Payments being made for a unit that was not in full compliance with HQS requirements, without timely implementation of required corrective actions such as abatement or tenant relocation. Recommendation: We recommend the Authority establish procedures to ensure Housing Assistance Payments are promptly abated or tenant relocation is initiated when units fail to meet HQS requirements beyond regulatory timeframes. Periodic internal monitoring or quality control reviews should also be implemented to ensure ongoing compliance with HUD regulations and to mitigate the risk of recurring deficiencies.