Finding 47666 (2022-001)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WA061VO - 2022 Award Period: October 1, 2021 ? September 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: The Housing Authority of Skagit County (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)). 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 CFRsections 982.158(d) and 982.404). Condition: The Authority did not perform HQS and QC inspections in accordance with program compliance requirements. The Authority requested an extension of the COVID-19 waiver that waived the compliance requirement for QC inspections; however, an extension was not granted by HUD. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: Known questioned costs of $13,742 were calculated based on the HAP payment for units that should have been abated, multiplied by the number of months where HAP was incorrectly paid. 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. The Authority did not properly abate HAP for 2 out of 20 failed inspections. The samples were statistically valid. Cause: HQS inspections were not completed within the required timeframe for 3 units. Due to the COVID-19 pandemic, QC inspections were waived under PIH notice 2021-14 until December 31, 2021; however, the Authority did not perform QC inspections for the period January 1, 2022 ? September 30, 2022. The Authority did not abate 2 units timely. Effect: The Authority is not in compliance with HQS, HQS enforcement, and QC inspection requirements. Repeat Finding: No. Recommendation: We recommend the Authority implements controls to ensure that required HQS and QC inspections are completed timely. 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.