Section III. Findings and Questioned Costs for Federal Awards
Item 2024-001
Assistance Listing Numbers: 14.871 – Housing Voucher Cluster
Federal Agency: U.S. Department of Housing and Urban Development
Pass-through Entity: N/A
Type of Finding: Material Weakness in Internal Control over Compliance and
Noncompliance
Compliance Requirement: Special Tests and Provisions
Questioned Costs: None
Criteria
24 CFR 982.305(a) requires that grantees must inspect housing units at least
biennially, and annually per their Housing Administrative Plan, to determine whether
housing units meet Housing Quality Standards. 2 CFR 200 requires that internal
control over compliance be established to provide reasonable assurance for
compliance.
Condition
During our audit testing, we haphazardly selected a sample of 40 tenants to
determine if the admission criteria were met. Of those 40 tenants, we identified 7
instances where an inspection was not conducted on an annual basis.
Cause
The City’s established procedures did not include sufficient controls to ensure that
the criteria were met in accordance with policy and regulation before the housing
assistance payments were authorized.
Effect
The City was not in compliance with these program requirements.
Recommendation
We recommend that management strengthen controls to ensure that housing
assistance payments are not authorized before the required criteria are met. Ideally,
this would include changes to the authorization process that prevent authorization
from being made without the review having been completed.
Management’s Response
131
Management acknowledges the audit finding related to Material Weakness in
Internal Control over Compliance and Noncompliance for 14.841 – Housing
Voucher Cluster. We agree with the assessment and recognize the importance of
addressing the underlying issue to enhance the organization's operations and internal
controls.
To resolve this issue, the City has already implemented staffing changes aimed at
addressing this material weakness and better program management for housing
These changes include the hiring of Terrence Hamilton. Terrence comes to the City
with a strong background in housing and has already implemented structural changes
to address housing division needs.
Management is confident that the hiring of Terrence and the support for his actions
have effectively remediated the material weakness and will help prevent similar
issues in the future. We remain committed to maintaining strong internal controls
and will continue to monitor the effectiveness of these changes regularly.
Person responsible for corrective action: Terrence Hamilton
Anticipated completion date: May 31, 2025