Finding 541812 (2024-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-03-31

AI Summary

  • Core Issue: The Authority failed to conduct required Housing Quality Standards (HQS) inspections on time for 7 out of 40 sampled units.
  • Impacted Requirements: Compliance with annual HQS inspection requirements as outlined in 24 CFR sections 982.405(a) and 982.405(b).
  • Recommended Follow-Up: Implement controls to ensure timely completion of HQS inspections to avoid repeat findings.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879Federal Award Identification Number and Year: SC911VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The South Carolina State Housing Finance and Development Authority (the Authority) must inspect a unit leased to a family at least annually to determine if the unit meets HQS (24 CFR sections 982.405(a) and 982.405(b)). Condition: The Authority did not perform HQS inspections in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: A sample of 40 units found that 7 units that were not inspected timely. Cause: HQS inspections were not completed within the required timeframe for 7 units. Effect: The Authority is not in compliance with HQS inspection requirements. Repeat Finding: Yes, see finding 2023-002. Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Housing Voucher Cluster – Assistance Listing Numbers 14.871/14.879 Compliance Requirement: Special Tests and Provisions – Housing Quality Standards (HQS) Inspections Recommendation: We recommend the Authority implements controls to ensure that required HQS are completed timely. Views of responsible officials: There is no disagreement with the audit finding. Action planned/taken in response to finding: Management commits to re-review applicable CFR and Admin Polices to assure we are starting from a good foundation and adjust HQS processes as needed to bring all HQS inspections into compliance. Management to provide refresher process training on HQS expected timelines and documentation required to be in OnBase. No later than May 2025, SC Housing is restructuring the HCV department. This realignment will result in a dedicated inspection team that is not burdened with ancillary administrative tasks that have contributed to their inability to meet critical deadlines. Additionally, inspectors will have the flexibility to inspect 4-5 days per week as necessary. One of the key inspectors is physically located in the Low Country area which will minimize the travel time required to inspect in this region. Two of the inspections with findings were in a portfolio assigned to an employee exhibiting substandard performance who was subsequently terminated. These cases have been reassigned. Name(s) of the contact person(s) responsible for corrective action: Lisa Wilkerson, Director of Rental Assistance and Compliance Lenzy Morris, Director of HCVP Operations Planned completion date for corrective action plan: Restructure in planned for late April, initial training will begin immediately and continue as needed.

Categories

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

Other Findings in this Audit

  • 541813 2024-002
    Material Weakness Repeat
  • 541814 2024-002
    Material Weakness Repeat
  • 541815 2024-003
    Material Weakness Repeat
  • 541816 2024-003
    Material Weakness Repeat
  • 541817 2024-003
    Material Weakness Repeat
  • 541818 2024-004
    Significant Deficiency Repeat
  • 541819 2024-004
    Significant Deficiency Repeat
  • 541820 2024-004
    Significant Deficiency Repeat
  • 541821 2024-005
    Significant Deficiency Repeat
  • 541822 2024-005
    Significant Deficiency Repeat
  • 541823 2024-005
    Significant Deficiency Repeat
  • 1118254 2024-002
    Material Weakness Repeat
  • 1118255 2024-002
    Material Weakness Repeat
  • 1118256 2024-002
    Material Weakness Repeat
  • 1118257 2024-003
    Material Weakness Repeat
  • 1118258 2024-003
    Material Weakness Repeat
  • 1118259 2024-003
    Material Weakness Repeat
  • 1118260 2024-004
    Significant Deficiency Repeat
  • 1118261 2024-004
    Significant Deficiency Repeat
  • 1118262 2024-004
    Significant Deficiency Repeat
  • 1118263 2024-005
    Significant Deficiency Repeat
  • 1118264 2024-005
    Significant Deficiency Repeat
  • 1118265 2024-005
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.195 Project-Based Rental Assistance (pbra) $164.29M
14.239 Home Investment Partnerships Program $93.81M
14.275 Housing Trust Fund $8.84M
21.023 Emergency Rental Assistance Program $6.50M
21.026 Homeowner Assistance Fund $4.56M
14.871 Section 8 Housing Choice Vouchers $2.90M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $981,190
14.879 Mainstream Vouchers $450,646