Finding 31198 (2022-005)

Material Weakness
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-09-28

AI Summary

  • Core Issue: The Authority failed to enforce Housing Quality Standards (HQS) by not requiring timely corrections of deficiencies.
  • Impacted Requirements: Compliance with HQS enforcement mandates, specifically the 24-hour and 30-day correction timelines.
  • Recommended Follow-Up: Implement controls to ensure timely correction of HQS deficiencies and proper abatement of Housing Assistance Payments (HAP) for non-compliant units.

Finding Text

2022 ? 005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: MO002VO - 2022 Award Period: January 1, 2022 ? December 31, 2022 Compliance Requirement: Special Tests and Provisions ? Housing Quality Standards (HQS) Enforcement Type of Finding: ? Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: For units under HAP contract that fail to meet HQS, the Authority 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 Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs 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 Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: Known questioned costs of $20,539 were calculated based on the HAP payment for the units that should have been abated, multiplied by the number of months where HAP was incorrectly paid. Unable to determine likely questioned costs. Context: Exceptions were noted in 9 out of 40 failed inspections: ? The Authority did not require the owner to correct HQS deficiencies within the required timeframe for 2 out of 40 failed inspections. ? The Authority did not properly abate HAP for 7 out of 40 failed inspections. The sample was statistically valid. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: No. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Finding 2022 ? 005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: MO002VO - 2022 Award Period: January 1, 2022 ? December 31, 2022 Compliance Requirement: Special Tests and Provisions ? Housing Quality Standards (HQS) Enforcement Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Exceptions were noted in 9 out of 40 failed inspections: The Authority did not require the owner to correct HQS deficiencies within the required timeframe for 2 out of 40 failed inspections. The Authority did not properly abate HAP for 7 out of 40 failed inspections. Cause: The Authority did not reinspect or abate units timely. Auditors Recommendation: Recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 24 CFR section 982.404(a). Recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Response to Finding 2022-005 The Authority generally concurs with the auditor?s findings and recommendations. The 2022 Audit included the review of 40 files tested for Housing Quality Standards (HQS) Enforcement requirements. Exceptions were noted in nine instances: The Authority did not require the owner to correct HQS deficiencies within the required timeframe for 2 out of 40 failed inspections. The Authority did not properly abate HAP for 7 out of 40 failed inspections. Action Taken: A Corrective Action Plan has been developed to ensure HQS Inspection enforcement is applied at the time of deficiency and if not corrected proper abatement notice being sent out to Landlord and tenant. Implementation began on August 1, 2023. To provide consistency, increase staff knowledge and reduce errors, training will be held immediately and then annually thereafter. In addition, we will increase quality control to monitor letters being sent out to landlords and tenants for the deficiencies that occurred in the unit. The process that will be in place is as follows: 1. Letter sent out to landlord and tenant notifying them the deficiencies in the unit. A time frame of 30 days will be set for the repairs to be made with a re-inspection date already set to verify repairs. 2. If the repairs are not made at that time, an abatement a letter will be sent out to the landlord and tenant notifying them that the HAP payment will stop the first day of the following month which would be a minimum of 30 days. At this time a letter will be sent to the tenant notifying them that a voucher will be issued to them to move to a more suitable unit. 3. If the repairs are not made at the end of the 30-day abatement period the HAP contract will terminate along with the HAP payment. A termination of HAP letter will be sent out to the landlord and tenant for the current unit that the tenant is living in. To monitor the events taking place above, a report will be submitted twice a month before our check run by the supervisor and manager of the inspection department to the HCV Director and Compliance department to monitor the HQS and abatement process. This quality insurance will ensure that all abatements and HQS deficiencies are being processed according to compliance. Name(s) of the contact person(s) responsible for corrective action: Edwin Lowndes Executive Director Planned completion date for corrective action plan: March 1, 2024.

Categories

Questioned Costs Special Tests & Provisions Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 31194 2022-001
    Significant Deficiency
  • 31195 2022-002
    Significant Deficiency
  • 31196 2022-003
    Significant Deficiency
  • 31197 2022-004
    Significant Deficiency
  • 31199 2022-001
    Significant Deficiency
  • 31200 2022-002
    Significant Deficiency
  • 31201 2022-003
    Significant Deficiency
  • 31202 2022-004
    Significant Deficiency
  • 31203 2022-005
    Material Weakness
  • 31204 2022-001
    Significant Deficiency
  • 31205 2022-002
    Significant Deficiency
  • 31206 2022-003
    Significant Deficiency
  • 31207 2022-004
    Significant Deficiency
  • 31208 2022-005
    Material Weakness
  • 607636 2022-001
    Significant Deficiency
  • 607637 2022-002
    Significant Deficiency
  • 607638 2022-003
    Significant Deficiency
  • 607639 2022-004
    Significant Deficiency
  • 607640 2022-005
    Material Weakness
  • 607641 2022-001
    Significant Deficiency
  • 607642 2022-002
    Significant Deficiency
  • 607643 2022-003
    Significant Deficiency
  • 607644 2022-004
    Significant Deficiency
  • 607645 2022-005
    Material Weakness
  • 607646 2022-001
    Significant Deficiency
  • 607647 2022-002
    Significant Deficiency
  • 607648 2022-003
    Significant Deficiency
  • 607649 2022-004
    Significant Deficiency
  • 607650 2022-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $9.36M
14.872 Public Housing Capital Fund $5.17M
14.889 Choice Neighborhoods Implementation Grants $4.79M
14.879 Mainstream Vouchers $805,975
14.871 Section 8 Housing Choice Vouchers $767,658
14.896 Family Self-Sufficiency Program $276,510
14.870 Resident Opportunity and Supportive Services - Service Coordinators $109,504