Finding 499288 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-29

Audit: 322102

Organization: The Housing Authority of the City of Key West, Florida (FL)

Auditor: Cliftonlarsonallen LLP

AI Summary

Core Issue: The PHA failed to meet compliance requirements for correcting housing quality deficiencies, with 7 instances of repairs not completed on time and 4 units not properly abated.
Impacted Requirements: Non-compliance with federal regulations on Housing Quality Standards (HQS) and annual inspection protocols.
Recommended Follow-Up: Assign a dedicated person to review recertified tenant files monthly to ensure compliance with internal policies and address deficiencies promptly.

Finding Text

Federal Agency: Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: FL013, 2023 Award Period: January 1, 2023 to December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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 abate HAP payments 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). In addition, all HCV units are required to be inspected annually. The PHA must inspect the unit leased to a family at least 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 sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted as summarized below: Number of Instances -- Finding 7 -- Repairs not completed within the required correction period of 30 days. 4 -- Unit was not properly abated. Questioned Costs: $992 Context: Of the 18 tenant files tested, 8 tenant files contained the errors as noted above. Cause: The Authority’s internal controls did not to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding housing quality standards and quality control inspection requirements. Repeat Finding: No Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month, to determine if the tenant files were prepared in accordance with internal policies and unit the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement.

Corrective Action Plan

2023-001 - HQS Enforcements and Annual HQS Inspections Housing Voucher Cluster - Assistance Listing No. 14.871 Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month, to determine if the tenant files were prepared in accordance with internal policies and until the compliance deficiencies have been corrected. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: In response to the HOS enforcement and annual inspections finding for the Housing Authority of the City of Key West, FL 12-31-2023 audit, management has completed the following items in order to address the issue: • Hired a new HCV Program Manager, • Procured a new outside HCV inspection contractor, • Provided current staff training on HCV program HOS requirements, • Adopted the recommendation from our independent auditors to have the Assistant to the Director of Housing sample 10% of the HCV recertification files monthly to ensure compliance with federal regulations and housing quality standards - files that are found to be out of compliance will be reported to the Director of Housing & Executive Director. In addition, the following items will be done: • Consider changing the administrative plan to prohibit time extensions beyond 30 days, thereby requiring abatement of HAP effective the 31st day in all cases, • Update the job description of the Assistant to the Director of Housing & change the title of the position to Assistant to the Director of Housing/Compliance Specialist. Name(s) of the contact person(s) responsible for corrective action: Randy Sterling, Executive Director Planned completion date for corrective action plan: October 31, 2024.

Other Findings in this Audit

499289 2023-001

Significant Deficiency
1075730 2023-001

Significant Deficiency
1075731 2023-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.269	Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (cdbg-Dr)	$11.60M
14.872	Public Housing Capital Fund	$1.03M
14.871	Section 8 Housing Choice Vouchers	$451,822
14.850	Public Housing Operating Fund	$313,878