Finding 15915 (2022-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-30

AI Summary

  • Core Issue: The Authority failed to conduct required Housing Quality Standards (HQS) and quality control (QC) inspections for leased units.
  • Impacted Requirements: Annual inspections and QC re-inspections were not performed as mandated by federal regulations.
  • Recommended Follow-Up: Implement controls to ensure timely completion of all required inspections moving forward.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2022 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the Authority must conduct quality control (QC) re-inspections (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS and QC inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 2 units that were not inspected timely. The Authority did not perform QC inspections during the fiscal year. The sample was statistically valid. Cause: HQS inspections were not completed within the required timeframe for 2 units. Due to the COVID-19 pandemic, QC inspections were waived under PIH notice 2021-14 until December 31, 2021; however, the Authority did not perform QC inspections for the period January 1, 2022 ? June 30, 2022. Effect: The Authority is not in compliance with HQS and QS inspection requirements. Repeat Finding: No. Recommendation: We recommend the Authority implements controls to ensure that required HQS and QC inspections are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implement controls to ensure that required HQS and QC inspections are completed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Periodic HQS Inspections: Procedures are in place that require staff to generate a listing of all properties requiring inspection no less than one hundred twenty (120) days prior to the scheduled inspection date. Each unit under HAP contract must be inspected prior to execution of the initial lease and prior to execution of the HAP contract and no less than biennially thereafter to confirm the unit continues to meet minimum HUD requirements. Management identified a system generated report from YARDI to establish when recurring inspections must be completed. This report is generated a minimum of once monthly to assist with scheduling. The report is monitored by the Operations Manager and the Housing Choice Voucher Director. Procedures have been updated to require that the Director of Rental Assistance and Compliance review all inspections completed after the date due and the accompanying explanation for the delay. Management will track and analyze the data generated from the late inspections to identify patterns and implement corrective actions as warranted. Financing Housing. Building SC. QC Inspections: Upon discovery, a supervisor was assigned and all prior year HQS QC inspections were completed, albeit late. Effective April 1, 2023, and every month thereafter, the designated manager will conduct QC inspections utilizing the minimum file size sample based on the number of units under HAP contract annually. All required inspections will be completed no later than the end of each fiscal year. A status report documenting all efforts and results will be submitted monthly to the Director of Rental Assistance and Compliance. Management will track and analyze the data generated from these inspections to assure all program inspections are consistent and compliant and that any patterns identified are effectively addressed with additional training, etc. as warranted. Names of the contact persons responsible for corrective action: Lenzy Morris, Yolanda Dennison, Lisa Wilkerson Planned completion date for corrective action plan: June 30, 2023

Categories

Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 15916 2022-002
    Material Weakness
  • 15917 2022-003
    Significant Deficiency
  • 15918 2022-004
    Significant Deficiency
  • 15919 2022-001
    Material Weakness
  • 15920 2022-002
    Material Weakness
  • 15921 2022-003
    Significant Deficiency
  • 15922 2022-004
    Significant Deficiency
  • 15923 2022-001
    Material Weakness
  • 15924 2022-002
    Material Weakness
  • 15925 2022-003
    Significant Deficiency
  • 15926 2022-004
    Significant Deficiency
  • 15927 2022-001
    Material Weakness
  • 15928 2022-002
    Material Weakness
  • 15929 2022-003
    Significant Deficiency
  • 15930 2022-004
    Significant Deficiency
  • 15931 2022-005
    Significant Deficiency
  • 592357 2022-001
    Material Weakness
  • 592358 2022-002
    Material Weakness
  • 592359 2022-003
    Significant Deficiency
  • 592360 2022-004
    Significant Deficiency
  • 592361 2022-001
    Material Weakness
  • 592362 2022-002
    Material Weakness
  • 592363 2022-003
    Significant Deficiency
  • 592364 2022-004
    Significant Deficiency
  • 592365 2022-001
    Material Weakness
  • 592366 2022-002
    Material Weakness
  • 592367 2022-003
    Significant Deficiency
  • 592368 2022-004
    Significant Deficiency
  • 592369 2022-001
    Material Weakness
  • 592370 2022-002
    Material Weakness
  • 592371 2022-003
    Significant Deficiency
  • 592372 2022-004
    Significant Deficiency
  • 592373 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Covid-19 Emergency Rental Assistance $230.71M
14.195 Section 8 Housing Assistance Payments Program $149.95M
14.239 Home Investment Partnerships Program $87.49M
21.026 Covid-19 Homeowner Assistance Fund $14.53M
14.871 Section 8 Housing Choice Vouchers $14.48M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $9.30M
14.275 National Housing Trust Fund $1.69M
14.871 Section 8 Housing Choice Vouchers- Emergency Housing Vouchers $564,015
14.871 Section 8 Housing Choice Vouchers - Cares $513,332
14.879 Mainstream Vouchers $124,031
14.228 Hera Neighborhood Stabilization Program $3,867