Finding 569830 (2024-004)

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Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-06-30

AI Summary

  • Core Issue: The Authority lacks proper documentation for Housing Quality inspection failures, impacting Indicator 6 HQS Enforcement.
  • Impacted Requirements: Compliance with 24 CFR 985.2 and 985.3 is compromised, affecting the ability to accurately sample and report inspection results.
  • Recommended Follow-Up: Develop clear reporting guidelines for inspectors and maintain thorough documentation to support SEMAP testing and submissions.

Finding Text

Condition: During our audit of the Authority’s SEMAP submission and discussion with the Authority staff we noted that the Authority did no have proper documentation of Housing Quality inspection failure types as it related to Indicator 6 HQS Enforcement. Criteria: 24 CFR 985.2 and 985.3 outlines sampling and testing methodologies for each indicator to allow the Authority to select the correct sample size from the correct universe and to correctly test and report the sample. Context: We obtained the Authority’s SEMAP submission and available supporting documentation. As a part of the testing process we attempted to review the Authority’s sampling and testing methodology for the SEMAP indicators. The Authority’s documentation did not note what type of failure each inspection was and therefore we were unable to determine that the HQS inspection failures were followed up in the correct time frame. Cause: The Authority experienced reporting and operational changes with some of the inspectors used which created challenges to ensuring properly documentation in regards to SEMAP testing. Effect: The Authority is unable to support the testing conclusion performed for Indicator 6 as part of the annual SEMAP submission. Questioned Costs: Unknown. Auditor Recommendations: The Authority should develop reporting guideline with inspectors and keep documentation to clearly outline the testing performed as a part of the SEMAP submission and readily have necessary supporting documentation. Management Response: See Corrective Action Plan.

Corrective Action Plan

The Jacksonville Housing Authority’s (JHA) Housing Choice Voucher (HCV) program is the largest rental assistance program in the City of Jacksonville. Through the Annual Contributions Contract (ACC), the program receives over $90M from the United States Department of Housing and Urban Development (HUD) and assist over 7,700 families each year. The ACC requires JHA to comply with federal regulations and HUD guidelines, as amended from time to time. Audit Findings Berman Hopkins Wright & LaHam, CPAs and Associates, LLP conducted the recent FY2024 JHA Audit (Period: October 1, 2023 – September 30, 2024) and identified continued material weakness findings within the JHA Housing Choice Voucher (HCV) program including but not limited to: Material Weaknesses in Internal Controls, Material Weaknesses in Non-Compliance and Material Weaknesses in the Housing Quality Standards (HQS) Inspection process. Berman Hopkins Wright & LaHam, CPAs and Associates, LLP previously conducted JHA’s FY2023 audit (Period: October 1, 2022 – September 30, 2023) and FY2022 audit (Period: October 1, 2021 – September 30, 2022) which disclosed consecutive historical material weaknesses in JHAs internal controls and noncompliance of the Housing Choice Voucher (HCV) program. Under new CEO leadership at JHA, a request to the JHA Board of Commissioners is in place for a vote on Friday, June 27, 2025, to authorize the following action of Nan McKay & Associates to Administer, Manage and Operate the JHA Housing Choice Voucher Program for an effective date of Monday July 7, 2025. This will also include HCV HQS inspections. Pending Resolution: AUTHORIZE THE AWARD OF THE MIAMI-DADE HOUSING & COMMUNITY DEVELOPMENT PIGGYBACK CONTRACT IN THE NOT-TO-EXCEED AMOUNT OF 72% OF THE ADMINISTRATIVE FEES CONCURRENT WITH THE EXISTING CONTRACT TERMS TO NAM MCKAY AND ASSOCIATES, FOR HOUSING CHOICE VOUCHER MANAGEMENT AND OPERATIONS. As evidenced by the increase in overall HCV audit findings, loss of federal revenues, inability to correctly serve existing and future HCV program participants, noncompliance on both a local and federal level for section 8 program funding for the administration and operations of the HCV program, immediate action is requested to authorize Nan McKay & Associates to administer and operate JHA’s HCV program. Combined with a plethora of likely compliance issues and deteriorated financial condition, these concerns pose a significant threat to both the immediate and long-term success of Jacksonville’s HCV program. Responsible: Nan McKay & Associates POINT OF CONTACT: Steven Rosario, Sr. Director EMAIL: srosario@nanmckay.com JHA POC: Roslyn Phillips, Interim COO EMAIL: RPHILLIPS@JAXHA.ORG

Categories

Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $92.09M
14.850 Public and Indian Housing $11.59M
14.872 Public Housing Capital Fund $5.90M
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $2.92M
14.871 Section 8 Housing Vouchers $1.94M
14.879 Mainstream Vouchers $1.05M
14.895 Jobs-Plus Pilot Initiative $839,921
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $683,915
14.896 Family Self-Sufficiency Program $369,946
14.870 Resident Opportunity and Supportive Services- Service Coordinators $153,665
14.218 Community Development Block Grants/entitlement Grants $70,000