Finding 496891 (2023-003)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-09-16
Audit: 319635
Auditor: Smco

AI Summary

  • Core Issue: The PHA failed to enforce timely rent abatements for units that did not meet Housing Quality Standards (HQS), risking non-compliance with federal regulations.
  • Impacted Requirements: Units must be inspected bi-annually, and deficiencies must be corrected within specified timeframes; failure to do so requires immediate rent abatement or contract termination.
  • Recommended Follow-Up: The Authority should enhance oversight to ensure compliance with HQS regulations and enforce rent abatements when necessary to avoid potential penalties.

Finding Text

The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA 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 PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA 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 PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). During our audit, we identified four (4) failed HQS that did not receive a pass for several months and no rent abetment process was started or enforced during that time period. The HQS population was 135 failed inspection. We selected a sample of 29 inspection and identified of those 29 reviewed 4 did not obtain a re-inspection pass within the Criteria noted above and no rent abetment process was enforce on landlord. The Authority staff did not want to jeopardize the tenants lease by enforcing the rent abatements and rather worked with the landlord over an extend period to resolve the failed inspection issues. The Authority is non‐compliant with the federal regulations over this federal program, this could potentially result in operating and financial penalties. We suggest the Authority properly oversee compliance with regulations and enforce rent abatements if necessary to adherence to federal compliance requirements. Management agrees with the finding, see Management's corrective action plan.

Corrective Action Plan

Criteria: The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control reinspections. The PHA must prepare a unit inspection report (24 CFR §§982.405, 983.103)). Additionally, for units under HAP contract that fail to meet HQS, the PHA 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 PHA‐approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA 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 PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During our audit, we identified four (4) failed HQS that did not receive a pass for several months and no rent abetment process was started or enforced during that time period. Context: The HQS population was 135 failed inspection. We selected a sample of 29 inspection and identified of those 29 reviewed 4 did not obtain a re-inspection pass within the Criteria noted above and no rent abetment process was enforce on landlord. Cause: The Authority staff did not want to jeopardize the tenants lease by enforcing the rent abatements and rather worked with the landlord over an extend period to resolve the failed inspection issues. Effect: The Authority is non‐compliant with the federal regulations over this federal program, this could potentially result in operating and financial penalties. Recommendations: The Authority will partner with nonprofit and other county agencies to ensure, in cases where landlords have failed inspections, any negative impact to tenants will be minimized. The Authority will enforce their policies related to inspections with respect to all landlords and tenants. Sincerely yours, Kira Kessler Finance Director

Categories

HUD Housing Programs

Other Findings in this Audit

  • 496892 2023-002
    Significant Deficiency
  • 1073333 2023-003
    Significant Deficiency
  • 1073334 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $8.48M
21.023 Emergency Rental Assistance Program $1.92M
14.872 Public Housing Capital Fund $1.14M
14.267 Continuum of Care Program $829,005
14.850 Public and Indian Housing $654,909
14.238 Shelter Plus Care $440,240
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $6,281