Finding Text
Finding Reference: 2022-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Home Investment Partnerships Program Assistance Listing Number: 14.239 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions ? Housing Quality Standards Classification of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance Criteria: Pursuant to 24 CFRs 92.209(i), 92.251(f), and 92.504(d), during the period of affordability for Home Investment Partnerships Program (HOME) assisted rental housing, the City must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The City must perform on-site inspections of rental housing occupied by tenants receiving HOME assisted tenant based rental assistance to determine compliance with housing quality standards. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides the U.S. Department of Housing and Urban Development (HUD) with broad authority to waive or establish alternative requirements for the HOME program. HUD waived the requirement to perform ongoing periodic inspections. Within 180 days of the end of the waiver period ended December 31, 2021, the City must physically inspect units that would have been subject to on-going inspections since the waiver period began on April 10, 2020. Condition: The City did not perform any Housing Quality Standards (HQS) inspections as required within 180 days of the end of the waiver period ended December 31, 2021 and the City started performing HQS inspections during the next fiscal year beginning July 1, 2022. Cause of Condition: As a result of the novel coronavirus (COVID-19) health emergency, the City implemented administrative reliefs and waivers issued by HUD, and temporarily suspended all HQS inspections. Procedural changes due to the global pandemic and staffing constraints led to delayed inspections. Effect: HOME assisted rental housing may not meet safety and other requirements. Questioned Costs: Not applicable. During the period of affordability for HOME assisted rental housing, the City is required to perform on-site inspections to determine compliance with property standards. Identification of Repeat Finding: This is not a repeat finding. Recommendation: The City should develop procedures, systems and controls to ensure the required HQS inspections are conducted in a timely manner. Also, staff needs to be continually trained and cross-trained on the rules and regulations to properly administer HQS inspections in accordance with HUD requirements. Views of Responsible Officials: The views of responsible officials are set forth in the City?s Corrective Action Plan, which is included in the Audit Findings Follow-Up section at the end of this report.