Finding 19840 (2022-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-06-28

AI Summary

  • Core Issue: The Authority failed to conduct timely inspections and properly manage Housing Quality Standards (HQS), leading to noncompliance with federal regulations.
  • Impacted Requirements: Missing inspection reports and improper abatement of Housing Assistance Payments (HAP) for units that did not meet HQS, affecting 22 out of 60 failed inspections.
  • Recommended Follow-Up: Assign a dedicated person to oversee the inspection process and ensure no HAP payments are made for units that do not pass HQS inspections.

Finding Text

Finding 2022 ? 002 ? HQS Enforcements and Annual HQS Inspections Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Award Period: October 1, 2021 to September 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Other Matters Criteria or specific requirement: For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). In addition, all HCV units are required to be inspected annually. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted as summarized below: Failed HQS Inspections Number of Instances Finding 3 Where the passed inspection reports were missing and could not verify if the payments were properly abated for the units. 19 Where the Authority did not properly abate HAP after the second failed inspection and/or the tenants passed inspection reports and dates were missing and could not verify if the payments were properly abated for the units. Annual HQS Inspections Number of Instances Finding 23 Where the annual inspection was not performed in a timely manner, the Authority failed to enforce regulation, or the inspection was unable to be located Questioned costs: $94,160 Context: Out of 60 failed inspections tested, 22 inspections contained errors as noted above. Out of 60 annual inspections, tested 23 inspections contained errors as noted above. Cause: The Authority does not have adequate procedures in place to ensure units are inspected timely or to ensure that units with housing quality standard deficiencies are not paid housing assistance payments. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Repeat Finding: This is a repeat finding from previous years. The finding numbers are 2017-002, 2018-002, 2019-002, 2020-002, and 2021-002. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

2022-002 ? HQS Enforcements Housing Choice Voucher Cluster ? Assistance Listing No. 14.871 and 14.879 Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The PBCHA acknowledges the continuing issues associated with this finding. The COVID-19 pandemic has placed unprecedented stress on companies across the country. The PBCHA was no exception. This stress negatively impacted the PBCHA?s management, workforce and operations which resulted in sudden changes in working arrangements, shortages due to workforce sickness, staffing vacancies and turnover all while dealing with increased housing demand due rising rental costs, and decreased housing supply and housing instability. Despite these challenges, the PBCHA remains strongly focused on continued and improved operations, increased compliance, and accountability. The PBCHA continues to utilize its third-party vendor to complete all HQS inspections. The PBCHA will also utilize the technology available to make its HQS inspections and enforcement process as efficient as possible. This includes improved functionality within its new software system, new guidelines, and handheld technology and RVI methods as appropriate. The PBCHA make decisions, develop strategies, implement policies/procedures, and utilize all available resources during this period of prevailing uncertainty and volatility. Any action taken to address the noted deficiency will be based on careful analysis, innovative thinking, restructuring, flexibility and/or revised strategies to adapt to everchanging business circumstances. Name(s) of the contact person(s) responsible for corrective action: Tyler Rasmussen, Carol Jones- Gilbert

Categories

Questioned Costs HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 19839 2022-001
    Material Weakness Repeat
  • 19841 2022-003
    Material Weakness Repeat
  • 19842 2022-004
    Material Weakness Repeat
  • 19843 2022-005
    Significant Deficiency
  • 19844 2022-001
    Material Weakness Repeat
  • 19845 2022-002
    Material Weakness Repeat
  • 19846 2022-003
    Material Weakness Repeat
  • 19847 2022-004
    Material Weakness Repeat
  • 19848 2022-005
    Significant Deficiency
  • 596281 2022-001
    Material Weakness Repeat
  • 596282 2022-002
    Material Weakness Repeat
  • 596283 2022-003
    Material Weakness Repeat
  • 596284 2022-004
    Material Weakness Repeat
  • 596285 2022-005
    Significant Deficiency
  • 596286 2022-001
    Material Weakness Repeat
  • 596287 2022-002
    Material Weakness Repeat
  • 596288 2022-003
    Material Weakness Repeat
  • 596289 2022-004
    Material Weakness Repeat
  • 596290 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $30.29M
14.879 Mainstream Vouchers $3.05M
14.241 Housing Opportunities for Persons with Aids $2.92M
14.850 Public and Indian Housing $1.54M
14.872 Public Housing Capital Fund $1.49M
14.871 Emergency Housing Vouchers $570,541
14.871 Covid-19 Hcv Cares Act Funding $360,476
14.895 Jobs-Plus Pilot Initiative $241,191
14.850 Covid-19 Public Housing Cares Act Funding $129,791
14.896 Family Self-Sufficiency Program $107,770
14.870 Resident Opportunity and Supportive Services - Service Coordinators $43,974