FAC Explorer

Finding 505124 (2023-008)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-11-08
Audit: 327788
Organization: City of Long Beach (CA)
Auditor: Kpmg LLP

AI Summary

  • Core Issue: The City failed to enforce housing quality standards, with repairs not completed within the required 30-day timeframe for 10 out of 40 samples.
  • Impacted Requirements: Compliance with HUD's housing quality standards enforcement and proper abatement of Housing Assistance Payments (HAP) was not maintained.
  • Recommended Follow-Up: Implement additional controls to ensure timely remediation of deficiencies and proper abatement or proration of HAP payments when repairs are overdue.

Finding Text

Finding Number: 2023-008 Program: COVID-19 Section 8 Housing Choice Vouchers ALN #: 14.871 Pass-through Entity: N/A – Direct Award Federal Agency: Department of Housing and Urban Development (HUD) Federal Award Numbers: Multiple – City receives incremental funding throughout the year. Federal Award Year: 2023 Compliance Requirement: Special Tests- Housing Quality Standards Enforcement Criteria For units under housing assistance payment (HAP) contracts 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 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). Title 45 US Code of Federal Regulations Part 75 (45 CFR part 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303 also states that nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure eligibility criteria are met and documented. Conditions Found During our testing, we noted that for 10 of 40 samples selected, the required repairs were not completed within the 30-day time period, and the City did not properly abate voucher payments by the abatement effective date. As noted above, this date is to be no later than the first of the month following the specified correction period. Additionally, for 31 of 40 sample selections, we noted that deficiencies were not remediated within 30 days, and therefore, the control failed to ensure that repairs were completed timely. The City’s control of sending a letter to the tenant to inform them of the deficiency ensures they are aware of the time frame, but does not ensure action is taken. The City's control over ensuring that voucher payments are properly stopped for abated units, requires the Inspection Supervisor to sign the bi-monthly check run to ensure the HAP register's completeness and accuracy. For six of the seven samples selected, the check run/HAP register did not include the signature of the Inspection Supervisor. Cause Due to the required number of deficiencies and limited resources, the City was not able to abate payments, or prorate the payments based on the effective abatement date. The City was also unable to enforce the housing quality standards. Effect The City is not in compliance with the housing quality standards enforcement requirements as set by HUD. Questioned Costs Not applicable Repeat finding A similar finding was not reported in the prior year. Statistical sample The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the City implement additional control procedures to ensure that deficiencies are remediated within 30 days. Additionally, control procedures should be in place for those that are not remediated within 30 days to ensure HAP payments are abated or prorated, as appropriate. View of Responsible Officials Due primarily to limited staffing resources, HACLB was unable to verify whether required repairs were completed by the owners, and was unable to take the proper subsequent steps of abating payments to them. To ensure that required repairs are completed within the 30-day time period, HACLB will implement a process to ensure reinspection dates occur before the expiration of the 30-day remediation period. HACLB will also establish clear criteria and standards for the Inspections Housing Assistance Coordinator who is responsible for timely abatement entries, ensuring compliance with operational and regulatory requirements. The Inspections Housing Assistance Coordinator will receive additional training on abatement procedures to enhance their skills and understanding. Furthermore, the Housing Assistance Coordinator will conduct weekly reviews of deficiencies that exceed the 30-day remediation period to ensure timely action for abatement or proration. Response to Views of Responsible Officials The City communicated verbally and in writing, through process narrative understanding documents, that the Inspection Supervisor reviews the register to ensure that payments are stopped for abated units, or restarted for units coming off the abatement list. The Inspection Supervisor is required to sign or initial each check run/HAP register to ensure its completeness and accuracy. It is further noted that when one coordinator is unavailable, another coordinator will perform their review and approval of the register. Written process narratives were provided to KPMG on June 5, 2024.

Categories

HUD Housing Programs Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility

Other Findings in this Audit

  • 505102 2023-002
    Material Weakness Repeat
  • 505103 2023-002
    Material Weakness Repeat
  • 505104 2023-002
    Material Weakness Repeat
  • 505105 2023-002
    Material Weakness Repeat
  • 505106 2023-002
    Material Weakness Repeat
  • 505107 2023-003
    Material Weakness
  • 505108 2023-003
    Material Weakness
  • 505109 2023-003
    Material Weakness
  • 505110 2023-003
    Material Weakness
  • 505111 2023-003
    Material Weakness
  • 505112 2023-004
    Material Weakness
  • 505113 2023-004
    Material Weakness
  • 505114 2023-004
    Material Weakness
  • 505115 2023-004
    Material Weakness
  • 505116 2023-004
    Material Weakness
  • 505117 2023-005
    Material Weakness
  • 505118 2023-005
    Material Weakness
  • 505119 2023-006
    Material Weakness
  • 505120 2023-006
    Material Weakness
  • 505121 2023-007
    -
  • 505122 2023-007
    -
  • 505123 2023-008
    Material Weakness
  • 505125 2023-009
    Material Weakness
  • 505126 2023-009
    Material Weakness
  • 505127 2023-010
    Material Weakness
  • 505128 2023-011
    Material Weakness
  • 1081544 2023-002
    Material Weakness Repeat
  • 1081545 2023-002
    Material Weakness Repeat
  • 1081546 2023-002
    Material Weakness Repeat
  • 1081547 2023-002
    Material Weakness Repeat
  • 1081548 2023-002
    Material Weakness Repeat
  • 1081549 2023-003
    Material Weakness
  • 1081550 2023-003
    Material Weakness
  • 1081551 2023-003
    Material Weakness
  • 1081552 2023-003
    Material Weakness
  • 1081553 2023-003
    Material Weakness
  • 1081554 2023-004
    Material Weakness
  • 1081555 2023-004
    Material Weakness
  • 1081556 2023-004
    Material Weakness
  • 1081557 2023-004
    Material Weakness
  • 1081558 2023-004
    Material Weakness
  • 1081559 2023-005
    Material Weakness
  • 1081560 2023-005
    Material Weakness
  • 1081561 2023-006
    Material Weakness
  • 1081562 2023-006
    Material Weakness
  • 1081563 2023-007
    -
  • 1081564 2023-007
    -
  • 1081565 2023-008
    Material Weakness
  • 1081566 2023-008
    Material Weakness
  • 1081567 2023-009
    Material Weakness
  • 1081568 2023-009
    Material Weakness
  • 1081569 2023-010
    Material Weakness
  • 1081570 2023-011
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $109.58M
14.871 Covid-19 Section 8 Housing Choice Vouchers $9.90M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $8.84M
21.023 Covid-19 Emergency Rental Assistance Program $6.76M
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $4.81M
14.218 Community Development Block Grants/entitlement Grants $3.83M
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $2.97M
14.231 Covid-19 Emergency Solutions Grant Program $2.63M
14.267 Continuum of Care Program $2.49M
17.259 Wioa Youth Activities $1.82M
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $1.50M
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $1.38M
20.106 Covid-19 Airport Improvement Program $1.34M
93.498 Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $1.17M
93.917 Hiv Care Formula Grants $1.11M
93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants $1.10M
15.514 Reclamation States Emergency Drought Relief $1.08M
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $1.03M
97.056 Port Security Grant Program $931,745
93.069 Public Health Emergency Preparedness $917,989
15.504 Title Xvi Water Reclamation and Reuse Program $850,412
14.900 Lead Hazard Reduction Grant Program $795,149
14.905 Lead Hazard Reduction Demonstration Grant Program $790,056
93.268 Immunization Cooperative Agreements $765,063
93.967 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health $686,801
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $645,239
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $424,261
97.067 Homeland Security Grant Program $369,977
16.825 Smart Prosecution Initiative $353,473
14.896 Family Self-Sufficiency Program $344,211
93.977 Sexually Transmitted Diseases (std) Prevention and Control Grants $321,057
15.916 Outdoor Recreation Acquisition, Development and Planning $310,615
20.205 Highway Planning and Construction $296,991
14.231 Emergency Solutions Grant Program $270,907
16.835 Body Worn Camera Policy and Implementation $252,470
14.239 Home Investment Partnerships Program $239,741
17.277 Wioa National Dislocated Worker Grants / Wia National Emergency Grants $236,914
20.106 Airport Improvement Program $227,664
16.738 Edward Byrne Memorial Justice Assistance Grant Program $212,696
10.559 Summer Food Service Program for Children $207,866
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $197,989
20.616 National Priority Safety Programs $179,047
16.560 National Institute of Justice Research, Evaluation, and Development Project Grants $151,117
93.994 Maternal and Child Health Services Block Grant to the States $150,165
20.600 State and Community Highway Safety $144,593
93.778 Medical Assistance Program $140,991
21.016 Equitable Sharing $133,000
15.557 Applied Science Grants $112,593
66.472 Beach Monitoring and Notification Program Implementation Grants $102,678
93.070 Environmental Public Health and Emergency Response $93,711
93.197 Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $91,128
14.895 Jobs-Plus Pilot Initiative $87,063
97.042 Emergency Management Performance Grants $82,000
93.914 Hiv Emergency Relief Project Grants $69,207
93.558 Temporary Assistance for Needy Families $68,144
14.241 Housing Opportunities for Persons with Aids $57,714
93.940 Hiv Prevention Activities Health Department Based $51,943
97.106 Securing the Cities Program $37,947
93.354 Covid-19 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $36,190
17.278 Wioa Dislocated Worker Formula Grants $34,027
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation�s Health $25,000
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $16,009
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $14,250
15.530 Water Conservation Field Services (wcfs) $14,069
93.008 Medical Reserve Corps Small Grant Program $10,000
14.256 Neighborhood Stabilization Program (recovery Act Funded) $6,429
97.042 Covid-19 Emergency Management Performance Grants $4,880
16.710 Public Safety Partnership and Community Policing Grants $3,968
17.258 Wioa Adult Program $3,890
97.024 Emergency Food and Shelter National Board Program $2,646
14.218 Covid-19 Community Development Block Grants/entitlement Grants $172