Federal Award Findings and Questioned Costs
Finding 2023-001:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Programs
Federal Catalog Numbers: 14.871
Noncompliance – N. Special Tests and Provisions - Housing Quality Standards
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the 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)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were failed inspections that did not pass reinspection within 30 days without penalty.
Context: There were approximately 794 failed inspections during the audit period. Of a sample size of twenty-five (25) failed inspections, three (3) failed inspections did not pass reinspection within 30 days. HAP was not abated nor was the tenant evicted.
Our sample size is statistically valid.
Known Questioned Costs: $2,113
Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed HQS inspections in compliance with program requirements following the expiration of HUD waivers as a result of insufficient staffing.
Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement a corrective action plan that will assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: Since the discovery of this issue, the Housing Authority has changed its inspection extension documentation process to ensure that formal documentation, including the expiration date of any approved extension, is included with inspection paperwork. The Authority accepts the recommendation of the auditor and will update its Housing Choice Voucher Administrative Plan to define a clear process and timeline for extending and documenting the inspection compliance period for both property owners and program participants. Such changes will be effective with the October 1, 2024 Administrative Plan. The Authority will ensure enforcement of Housing Quality Standards (or any subsequent replacement). Melanie Fletcher, Assistant Housing Administrator of Operations, is responsible for implementing this corrective action by September 30, 2024.
Schedule of Prior Year Audit Findings Finding 2022-001: Observation: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit.
Status: This finding has been resolved.
Finding 2022-002:
Observation: Based upon inspection of the Authority’s files and on discussion with management, there were failed inspections that did not pass reinspection within 30 days without penalty.
Status: This finding remains open. See finding 2023-001.