Finding 4364 (2023-004)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-12-14

AI Summary

  • Core Issue: The Commission lacks effective internal controls, leading to material weaknesses in compliance with Housing Quality Standards (HQS) inspections.
  • Impacted Requirements: The Commission failed to conduct timely annual inspections for 37 out of 40 tenant files, violating HUD regulations.
  • Recommended Follow-Up: Implement processes to ensure proper documentation and compliance with HQS inspection requirements moving forward.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project-Based Cluster Assistance Listing Number: 14.195/14.856 Federal Award Identification Number and Year: MD004 (various funding increments active during period 7/1/22 - 6/30/23) Award Period: July 1, 2022 through June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance.  Material Noncompliance (Modified Opinion) Criteria: PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS). The PHA must prepare a unit inspection report (24 CFR sections 880.612, 881.601, 882.516, 882.808(n), 883.701, 884.217, 886.123, and 886.323).). Condition: During our testing, we noted the Commission did not have adequate internal controls designed to ensure that HQS requirements were being met. As a result, inspections were not completed timely or at all. Questioned costs: Unknown Context: Testing of 40 HCVP tenant files for annual inspection standards revealed the following exceptions: - 4 files did not have an annual inspection that was completed within the 12-month fiscal period. - 33 files did not have a previous or subsequent inspection performed to verify the Commission is performing inspection on an annual basis. Cause: The Commission does not have controls in place to ensure it is meeting HQS inspection requirements set by HUD. Effect: The Commission is not in compliance with program requirements over HQS inspections. Repeat Finding: Yes. Recommendation: The Commission should implement processes to ensure that all proper documentation is being maintained for inspections of tenant residences. View of Responsible Officials: There is no disagreement with the audit finding.

Corrective Action Plan

Recommendation: The Commission should implement processes to ensure that all proper documentation is being maintained for inspections of tenant residences. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: HOC’s third party management agent, Edgewood, will complete inspections in alignment with the annual recertifications. The Edgewood Regional Managers will confirm that inspections are complete and the inspection will be uploaded with the certification. The HOC compliance team will continue to monitor as part of the Quality Control Site Visits. Name(s) of the contact person(s) responsible for corrective action: Darcel Cox, Vice President/Compliance Planned completion date for corrective action plan: Effective Immediately, Ongoing.

Categories

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 4356 2023-001
    Significant Deficiency
  • 4357 2023-001
    Significant Deficiency
  • 4358 2023-001
    Significant Deficiency
  • 4359 2023-002
    Material Weakness Repeat
  • 4360 2023-002
    Material Weakness Repeat
  • 4361 2023-002
    Material Weakness Repeat
  • 4362 2023-003
    Significant Deficiency Repeat
  • 4363 2023-003
    Significant Deficiency Repeat
  • 4365 2023-004
    Material Weakness
  • 4366 2023-005
    Significant Deficiency
  • 4367 2023-005
    Significant Deficiency
  • 4368 2023-006
    Significant Deficiency
  • 4369 2023-006
    Significant Deficiency
  • 580798 2023-001
    Significant Deficiency
  • 580799 2023-001
    Significant Deficiency
  • 580800 2023-001
    Significant Deficiency
  • 580801 2023-002
    Material Weakness Repeat
  • 580802 2023-002
    Material Weakness Repeat
  • 580803 2023-002
    Material Weakness Repeat
  • 580804 2023-003
    Significant Deficiency Repeat
  • 580805 2023-003
    Significant Deficiency Repeat
  • 580806 2023-004
    Material Weakness
  • 580807 2023-004
    Material Weakness
  • 580808 2023-005
    Significant Deficiency
  • 580809 2023-005
    Significant Deficiency
  • 580810 2023-006
    Significant Deficiency
  • 580811 2023-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.188 Housing Finance Agencies (hfa) Risk Sharing $319.67M
14.267 Continuum of Care Program $4.33M
14.195 Section 8 Housing Assistance Payments Program $3.90M
14.871 Section 8 Housing Choice Vouchers $1.86M
14.879 Mainstream Vouchers $1.78M
93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants $789,489
14.269 Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (cdbg-Dr) $760,068
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $680,147
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $415,659
14.896 Family Self-Sufficiency Program $316,658
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $18,843