Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Voucher Cluster
Assistance Listing Number: 14.871/14.879/14.EHV
Federal Award Identification Number and Year: VA901; 2023-2024
Award Period: July 1, 2023 through June 30, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or specific requirement: 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections.
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 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 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).
Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files:
- 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year.
- 7 of 60 files tested had inspections that were not performed annually.
- 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection.
During our testing of 60 HQS failed inspections, we noted the following in 8 files:
- 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency).
- 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection.
- 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results.
The samples were statistically valid samples.
Questioned costs: $2,482
Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations.
One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult.
As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team.
Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan.
Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003.
Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made.
Views of responsible officials: There is no disagreement with the audit finding.