Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program and Mainstream Vouchers Program Federal Assistance Listing Numbers: 14.871 and 14.879
Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension. On May 4, 2021, HUD issued Notice PIH 2021-14(HA). In this notice, HUD recognized the unprecedented challenge the COVID-19 pandemic poses to PHAs in carrying out the most essential of their HCV program administrative responsibilities. The notice allowed for the Authority to rely on the owner's certification that the owner has no reasonable basis to have knowledge that life-threatening conditions exist in the unit or units in questions. At minimum, the PHA must require the owner’s certification. The PHA is required to conduct an HQS inspection on the unit as soon as reasonably possible but no later than June 30, 2022. Condition: Based upon inspection of the Authority’s files and on discussion with management there were no owner's certifications performed during the audit period. The Authority only performed initial and special inspections during the audit period.
Context: The Authority was unable to provide us with a listing of failed inspections during the year under audit. The Authority did not annual perform inspections or obtain owner's certifications in lieu of annual inspections to determine if the units meet the HQS as required by 24 CFR sections 982.158(d) and 982.405(b).
Known Questioned Costs: Unknown
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance with Notice PIH 2021-14(HA).
Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are in material non-compliance with the with the special tests and provisions type of compliance related to HQS enforcement.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance, the compliance supplement, and all PIH notices.
Authority Response: Management unintentionally did not request owner's certifications during the audit period as required by Notice PIH 2021-14(HA). The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs and will implement internal control procedures that will ensure compliance of federal regulations, including PIH notices.