Finding 50420 (2022-004)

Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Lower Income Housing Assistance Program ? Section 8 Moderate Rehabilitation Federal Catalog Number: 14.856 Federal Grant Number: Not Applicable Category of Finding: Eligibility and Special Tests and Provisions ? Housing Quality Standards Inspections Classification of Finding: Significant Deficiency in Internal Control over Compliance Material Noncompliance Authority?s Response & Actions Taken The Authority has made significant progress in addressing the backlog of annual inspections since outsourcing the programmatic functions of the HCV program to a third-party contractor. The Authority remains committed to proactively making substantial movement toward 100% completion of unit inspections by working diligently with its HCV contractor to ensure this occurs. With that said, the Authority maintains that this finding and questioned costs do not consider the three scheduled inspections of the unit in question, between March and August 2022, that all resulted in cancellation or no-show. The auditors refused to take in consideration the evidence of the repeat scheduled inspection dates for this unit and the ?No Show? results. Notwithstanding the fact that in May 2023, the Authority completed the HQS inspection, and the unit passed. This is acceptable documentation which further evidence that the owner did meet its obligations to maintain the unit in decent, safe, and sanitary condition during the audit period. In alignment with the Authority?s HCV administrative plan, both the family and owner are to be provided reasonable notice for all inspections, at least 24 hours prior. The family must allow the Authority to inspect the unit at reasonable times with reasonable notice (24 CFR 982.51 (d)). When a family occupies the unit at the time of inspection, an adult family member must be present for the inspection. If the family misses two scheduled inspections without the Authority?s approval, the Authority will consider the family to have violated its obligation to make the unit available for inspection. This may result in termination of the family?s assistance in accordance with the termination procedures in the HCV administrative plan. If the family?s assistance is to be terminated, the Authority must notify the owner of its intent to terminate the family?s program assistance so the owner can begin eviction procedures. The Authority is obligated to continue to pay the owner until the eviction is completed. Therefore, the potential effect and questionable costs assumed by the auditor are not applicable when the HQS deficiency is due to the tenant?s failure to meet family obligations. The California?s statewide Declaration of Emergency and the City and County of San Francisco?s proclamation of Local Emergency due to COVID-19 was also still in effect during fiscal year 2021-22. The impact COVID-19 pandemic had on housing stability and mental health has been devastating, and disproportionately affected the most vulnerable populations in San Francisco. California State and the City both implemented an eviction moratorium as a mitigating strategy to ensure housing stability. The Authority also made it a priority to ensure health, safety and housing stability of its residents comprised of some of the most vulnerable populations in San Francisco. To that effect, the Authority collaborated closely with landlords and service providers to assess tenants needs and provided needed assistance throughout the COVID-19 emergency period (i.e., processing interims to assist renters experiencing financial hardship, ensuring food security, and delivering personal protective equipment). Anticipated Implementation Date September 30, 2023 Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action HCV Contractor Kendra Crawford, Director of Housing Operations