Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Housing Voucher Cluster
Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV
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.
Condition: Based upon inspection of the Authority’s files and on discussion with management, the Authority did not properly abate or provide proper extension documentation for failed inspections selected for testing. In addition, there were inspection reports that were unavailable for examination at the time of audit. Context: The Authority did not provide proper extension documentation or properly abate seven (7) out of twenty-seven (27) failed inspections selected for testing. Additionally, the Authority was unable to provide inspection reports for four (4) out twenty-seven (27) failed inspections selected for testing, therefore we were unable to determine if the unit passed reinspection within the required time. 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).
Known Questioned Costs: $31,398. 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.
Effect: The Housing Voucher Cluster is in material non-compliance 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 and the compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.