Finding Text
Criteria or specific requirement: According to §200.302 Financial management of 2 CFR Part 200, MTW Agencies must ensure that housing assisted under the demonstration program meets housing quality standards established or approved by the secretary. The HCV program regulations at 24 CFR sections 982.401 through 982.405 set forth basic housing quality standards (HQS) which all units must meet, and the PHA must verify by inspection, before initial assistance can be paid on behalf of a family and at least annually throughout the term of the assisted tenancy. Current HQS regulations consist of 13 key aspects of housing quality, performance requirements, and acceptability criteria to meet each performance requirement. HQS include requirements for all housing types, including single and multi-family dwelling units, as well as specific requirements for special housing types, such as manufactured homes, congregate housing, single room occupancy, shared housing, and group residences (Section 204(c)(3)(E) of Pub. L. No. 104-134 (42 USC 1437f (note))).
Per the HCVP Administrative Plan, the Authority is required to inspect tenant units no less than every 26 months.
Condition: During the testing of 40 HCV files selected, we noted 1 of the 40 tenant files did not have an inspection completed on the unit within the established timeline of the Authority’s policy.
Questioned costs: $30,000
Context: Out of 40 files, 1 contained errors as noted above. Per the HCVP Administrative Plan, the Authority is required to inspect tenant units no less than every 26 months.
Cause: There was an issue with Yardi and the notice letters that outlined deficiencies were printing out incorrect mailing information. This resulted in the housing provider not being properly notified of the deficiencies, so as a result the Authority could not abate until the housing provider received proper notice.
Effect: The auditor noted an instance of noncompliance. Noncompliance results in possible over charges to the grant.
Repeat Finding: No.
Recommendation: We recommend the Authority review their process and internal controls over HQS inspections to ensure compliance with HUD requirements and their administrative plan. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections.
Views of responsible officials: There is no disagreement with the audit finding.