Finding 518397 (2024-004)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-01-09

AI Summary

  • Core Issue: The City failed to enforce Housing Quality Standards (HQS) corrections, allowing owners to potentially receive benefits they are not entitled to.
  • Impacted Requirements: Non-compliance with 24 CFR sections 982.158(d) and 982.404 regarding timely correction of HQS deficiencies and stopping Housing Assistance Payments (HAP).
  • Recommended Follow-up: Management should establish and enforce controls to ensure timely compliance with HQS enforcement procedures.

Finding Text

Finding: 2024‐004 U.S. Department of Housing & Urban Development Program Name: Housing Voucher Cluster AL Number: 14.871 Material Non‐Compliance Material Weakness, Special Tests and Provisions Criteria: In accordance with 24 CFR sections 982.158(d) and 982.404, units under housing assistance payment (HAP) contract that fail to meet Housing Quality Standards (HQS), the Public Housing Agencies (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 HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: The City did not follow procedures to ensure that the HQS were corrected or subsequent procedures to stop HAP were not enforced. Context: Of the 16 failed inspections valued at $35,151 during the current year, we examined 4 valued at $8,104 and determined that 1 (25% valued at $5,649) failed inspections was not corrected and the HAP were not stopped timely. Effect: Owner could receive benefits for which they are not eligible. Cause: Lack of proper internal control over HQS enforcement. Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Likely questioned costs do not exceed $25,000. Recommendation: Management should implement controls to ensure that HQS enforcement procedures are followed timely. Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding. Please refer to the Corrective Action Plan section of this report.

Corrective Action Plan

Name of Contact Person: Renae Miller, Public Housing Director Corrective Action/Management’s Response: Inspector Skills and Certifications The current HCV staff inspector demonstrates the necessary skills to effectively inspect units. The inspector has successfully obtained both HQS and NSPIRE certifications. The HCV Manager has also successfully obtained the NSPIRE certification. Coordination of Inspections The Executive Director and HCV Manager ensure the inspector is informed of potential lease-ups promptly. The receptionist collaborates with the inspector to schedule inspections efficiently. The inspector and receptionist have addressed outstanding inspections and will continue to work together to ensure timely scheduling of all future inspections. Review of HUD PIC Reports The Executive Director and HCV Manager will review and discuss the HUD PIC report monthly, or more frequently, if necessary, to maintain oversight and compliance. Training for Inspection Documentation The HCV inspector will receive training on accurately entering all inspection appointments into the Management Software system. This will enhance tracking and ensure comprehensive documentation of inspection activities. Proposed Completion Date: Immediately and ongoing.

Categories

HUD Housing Programs Material Weakness Special Tests & Provisions Internal Control / Segregation of Duties

Other Findings in this Audit

  • 518394 2024-001
    Material Weakness
  • 518395 2024-002
    Material Weakness
  • 518396 2024-003
    Material Weakness
  • 1094836 2024-001
    Material Weakness
  • 1094837 2024-002
    Material Weakness
  • 1094838 2024-003
    Material Weakness
  • 1094839 2024-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $1.17M
14.850 Public Housing Operating Fund $705,509
14.872 Public Housing Capital Fund $305,791
66.458 Clean Water State Revolving Fund $219,340
21.027 Coronavirus State and Local Fiscal Recovery Funds $210,200