Finding 2024-002:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Voucher & Emergency Housing Vouchers
Assistance Listing Number: 14.871 & 14.EHV
Noncompliance – N. Special Tests and Provisions – Housing Quality Standards
Non Compliance Material to the Financial Statements:
Section 8 Housing Choice Vouchers - Yes
Emergency Housing Vouchers - No
Material Weakness and Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions. Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the 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)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.
Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority did not properly abate fifteen (15) out of twenty-nine (29) annual failed inspections selected for testing.
Context: The Authority did not properly abate fifteen (15) out of twenty-nine (29) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b).
Our sample size is statistically valid.
Known Questioned Costs:
Section 8 Housing Choice Vouchers $50,873
Emergency Housing Vouchers $1,308
Cause: There is a material weakness in Section 8 Housing Choice Vouchers and a significant deficiency in Emergency Housing Vouchers in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the special tests and provisions type of compliance related to HQS inspections and the Emergency Housing Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: We agree with the Auditor’s observations on the re-inspection of the failed units. The Authority had an independent contractor whose contract was terminated due to their unacceptable performance with HQS inspections. As a result, two HQS inspectors were recently hired, and a clerical person to assist in improving the quality control component of the program as it relates to HQS inspections. In addition, the Authority recently hired a Director of Leasing and Occupancy, and a Supervisor of the department, and has implemented a more stringent oversight to ensure that internal control policies are being followed in a timely manner to show improvement in this area, and an overall improvement to the entire function of this department. We are also actively seeking to fill two vacant Tenant Interviewer/Investigator positions. The current staffing change mentioned above puts the agency in a position to implement and ensure a tracking system being able to capture areas on Annual HQS unit status, First Inspection if failed for life threatening HQS deficiencies rescheduled within 24 hours and 30 days for all other deficiencies. Abatements are placed on all units having two failed HQS inspections. All current occupied units are being reviewed for HQS inspection status, and a resolving issues to those units not in compliance with the program.
Views of responsible officials and planned corrective action: Ms. Irma Gorham, Executive Director is responsible to remedy the deficiency by March 31, 2025.