Finding 393344 (2023-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-04-16

AI Summary

  • Core Issue: The Authority failed to conduct required Housing Quality Standards (HQS) and quality control (QC) inspections on time.
  • Impacted Requirements: Noncompliance with federal regulations requiring annual inspections and QC checks for housing units.
  • Recommended Follow-Up: Implement stronger controls to ensure timely completion of HQS and QC inspections.

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 - 2023 Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections 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 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 3 units that were not inspected timely. The Authority did not perform QC inspections during the fiscal year. Cause: HQS inspections were not completed within the required timeframe for 3 units. The Authority did not perform QC inspections during the fiscal year. Effect: The Authority is not in compliance with HQS and QC inspection requirements. Repeat Finding: Yes, see finding 2022-001. 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 implements 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 planned/taken in response to finding: Periodic HQS Inspections: Procedures are in place that require staff to generate a listing of all properties requiring inspection between ninety to one hundred and twenty 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 HAPcontract and no less than biennially per our HUD-approved Administrative Plan (not annually) thereafter to confirm the unit continues to meet minimum HUD requirements. This report is generated a minimum of once monthly to assist with scheduling. The report and scheduling of inspections is monitored by the Director of Housing Choice Voucher Operations. 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. Acceptable reasons for delay should be validated as beyond Authority control and documented accordingly. Management will track and analyze the data generated from the late inspections to identify patterns and implement additional corrective actions as warranted. QC Inspections: As of March 28, 2024, all 2024 fiscal year QC inspections have been completed. Ongoing, 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. Note: As of March 26, 2023, the HCVP is undergoing a minor departmental restructure, final effective date is undetermined at this time however, all parties are actively engaged in implementing the approved changes. One of the modifications includes the designation of one particular senior inspector as the official QC inspection team lead. The designation of this individual as the project lead will assure that QC inspections will be completed timely and in compliance with regulatory requirements. Name(s) of the contact person(s) responsible for corrective action: Wallace Preston, Training/HQS QC Manager, Lenzy Morris, HCVP Director of Operations and Lisa T. Wilkerson, Director of Rental Assistance and Compliance Planned completion date for corrective action plan: On track to demonstrate compliance with fiscal year ending June 30, 2024 and each fiscal year thereafter.

Categories

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

Other Findings in this Audit

  • 393345 2023-002
    Material Weakness Repeat
  • 393346 2023-002
    Material Weakness Repeat
  • 393347 2023-003
    Material Weakness Repeat
  • 393348 2023-003
    Material Weakness Repeat
  • 393349 2023-003
    Material Weakness Repeat
  • 393350 2023-004
    Material Weakness Repeat
  • 393351 2023-004
    Material Weakness Repeat
  • 393352 2023-004
    Material Weakness Repeat
  • 393353 2023-005
    Material Weakness Repeat
  • 393354 2023-006
    Material Weakness
  • 393355 2023-007
    Significant Deficiency Repeat
  • 393356 2023-007
    Significant Deficiency Repeat
  • 393357 2023-007
    Significant Deficiency Repeat
  • 393358 2023-008
    Significant Deficiency
  • 393359 2023-008
    Significant Deficiency
  • 393360 2023-008
    Significant Deficiency
  • 393361 2023-009
    Significant Deficiency
  • 393362 2023-009
    Significant Deficiency
  • 393363 2023-009
    Significant Deficiency
  • 393364 2023-010
    Significant Deficiency
  • 393365 2023-010
    Significant Deficiency
  • 393366 2023-010
    Significant Deficiency
  • 969786 2023-002
    Material Weakness Repeat
  • 969787 2023-002
    Material Weakness Repeat
  • 969788 2023-002
    Material Weakness Repeat
  • 969789 2023-003
    Material Weakness Repeat
  • 969790 2023-003
    Material Weakness Repeat
  • 969791 2023-003
    Material Weakness Repeat
  • 969792 2023-004
    Material Weakness Repeat
  • 969793 2023-004
    Material Weakness Repeat
  • 969794 2023-004
    Material Weakness Repeat
  • 969795 2023-005
    Material Weakness Repeat
  • 969796 2023-006
    Material Weakness
  • 969797 2023-007
    Significant Deficiency Repeat
  • 969798 2023-007
    Significant Deficiency Repeat
  • 969799 2023-007
    Significant Deficiency Repeat
  • 969800 2023-008
    Significant Deficiency
  • 969801 2023-008
    Significant Deficiency
  • 969802 2023-008
    Significant Deficiency
  • 969803 2023-009
    Significant Deficiency
  • 969804 2023-009
    Significant Deficiency
  • 969805 2023-009
    Significant Deficiency
  • 969806 2023-010
    Significant Deficiency
  • 969807 2023-010
    Significant Deficiency
  • 969808 2023-010
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $179.83M
14.195 Section 8 Housing Assistance Payments Program $158.19M
21.026 Homeowner Assistance Fund $122.54M
14.275 Housing Trust Fund $6.62M
14.239 Home Investment Partnerships Program $4.63M
14.871 Section 8 Housing Choice Vouchers $2.26M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $961,767
14.879 Mainstream Vouchers $285,184