Finding 486085 (2023-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-06

Audit: 318734

Organization: Hsg Authority of the City of Lakewood Dba Metro West Housing Solutions (CO)

Auditor: Eide Bailly LLP

AI Summary

Core Issue: Metro West Housing Solutions failed to conduct timely re-inspections for 16 properties after initial inspections failed, violating the 30-day requirement.
Impacted Requirements: Non-compliance with federal regulations regarding Housing Assistance Payments (HAP) and internal controls over property inspections.
Recommended Follow-Up: Management should enhance controls to ensure timely re-inspections and prevent future compliance issues.

Finding Text

2023‐001 Direct Program Department of Housing and Urban Development FFAL #14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions: HQS Enforcement Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: As a condition of receiving Federal awards, non‐Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal controls to provide reasonable assurance of compliance with these requirements. The Housing Choice Voucher program requires that recipients perform inspections of properties where tenants receiving Housing Assistance Payments reside and when inspections fail, re‐inspections must be performed within 30 days for non‐life‐threatening issues. Condition: Metro West Housing Solutions did not perform re‐inspections of 16 failed inspections within the prescribed 30‐day HAP requirement during 2023. In addition, HAP was not properly reviewed for possible abatement for these tenants. Cause: Controls over inspections that are a part of special tests and provisions were not properly designed to ensure that re‐inspections of properties occurred within 30 days of a failed inspection, thus resulting in a deficiency of internal control. Effect: Metro West Housing Solutions could be issuing HAP for properties that are not up to code or potentially dangerous for their recipients if inspections fail and re‐inspections are not occurring timely. In addition, an abatement of HAP might be missed if the re‐inspections are not occurring timely. Questioned Costs: None reported Context/Sampling: We tested 33 out of 161 of the failed inspections during 2023 (20% of the population) based on maximum risk of material noncompliance. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend management revisit controls over follow‐up on failed inspections to correct this matter and ensure no further findings occur. Views of Responsible Officials: There is no disagreement with the audit finding

Corrective Action Plan

Finding 2023‐001 Federal Agency Name: Department of Housing and Urban Development Assistance Listing Number: 14.871 Program Name: Section 8 Housing Choice Vouchers Program Finding Summary: Metro West Housing Solutions did not perform re‐inspections of 16 failed inspections within the prescribed 30‐day HAP requirement during 2023. In addition, HAP was not properly reviewed for possible abatement for these tenants. Corrective Action Plan: We now have a full‐time inspector, he’s HQS certified, and has gone through NSPIRE training. After the Interim Audit, we also created and staffed a new Housing Choice Supervisor position to better distribute the workload. We also created and staffed a Housing Choice Voucher Specialist II. This position was filled in house by a senior member of the team who will train staff, conduct monthly audits of files, prepare written standard operating procedures for processing files (i.e., annual recertifications, interim certifications, moves, terminations, portability, etc.). Responsible Individual(s): Director, Housing Choice Vouchers Anticipated Completion Date: September 2024

Other Findings in this Audit

1062527 2023-001

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
14.871	Section 8 Housing Choice Vouchers	$17.16M
14.218	Commnunity Development Block Grants/entitlement Grants	$24,000