Finding 571354 (2023-004)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2025-07-15
Audit: 362297
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: The owner failed to conduct required Housing Quality Standards (HQS) inspections for 2023, leading to potential non-compliance with HUD standards.
  • Impacted Requirements: The Use Agreement mandates that properties must be maintained in good condition, which includes timely HQS inspections.
  • Recommended Follow-Up: Management should implement procedures to ensure all units are inspected on time and address any findings promptly.

Finding Text

Finding No. 2023-004 - Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions - Significant Deficiency HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Low Income Housing Preserve & Resident Homeownership Act of 1990 Capital Grant Entity Identifying Number Initial year Finding instances Beacon 126-35062 1996 2 Taylor 126-55017 1996 1 Total Instances 3 Criteria In accordance with the Use Agreement, Housing Quality Standards require that the Owner shall maintain the property in good repair and condition. Condition The owner did not ensure passing HQS inspections were performed during 2023. Cause Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 3 instances of the 3 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: No Recommendation Management should ensure that all units are inspected timely, that they meet the HUD Housing Quality Standards and that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023, with staffing shortages it is possible that not every unit was inspected in 2023. Specifically, around the 3 instances of the 3 files tested after the finding were provided to REACH we provided the annual inspection for unit #11 at Beacon. For unit #5 at Beacon the annual inspection was not in the current resident file that was tested because the unit was vacant at the time of 2023 annual inspection. The annual inspection for the last file at Taylor this inspection was missed due to staffing changes at the time. REACH continued to reestablish our annual unit inspection process post COVID in 2024.

Corrective Action Plan

Finding No. 2023-004 HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria In accordance with the Use Agreement, Housing Quality Standards require that the Owner shall maintain the property in good repair and condition. Condition Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Cause Management did not perform HQS inspections during the year ended December 31 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 3 instances of the 3 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: No Recommendation Management should resume making sure all units meet the HUD Housing Quality Standards and ensure that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023, with staffing shortages it is possible that not every unit was inspected in 2023. Specifically, around the 3 instances of the 3 files tested after the finding were provided to REACH we provided the annual inspection for unit #11 at Beacon. For unit #5 at Beacon the annual inspection was not in the current resident file that was tested because the unit was vacant at the time of 2023 annual inspection. The annual inspection for the last file at Taylor this inspection was missed due to staffing changes at the time. REACH continued to reestablish our annual unit inspection process post COVID in 2024.

Categories

Special Tests & Provisions HUD Housing Programs Significant Deficiency

Other Findings in this Audit

  • 571351 2023-001
    Significant Deficiency Repeat
  • 571352 2023-002
    Significant Deficiency Repeat
  • 571353 2023-003
    Significant Deficiency Repeat
  • 571355 2023-005
    Significant Deficiency
  • 571356 2023-006
    Significant Deficiency Repeat
  • 571357 2023-007
    Significant Deficiency
  • 1147793 2023-001
    Significant Deficiency Repeat
  • 1147794 2023-002
    Significant Deficiency Repeat
  • 1147795 2023-003
    Significant Deficiency Repeat
  • 1147796 2023-004
    Significant Deficiency
  • 1147797 2023-005
    Significant Deficiency
  • 1147798 2023-006
    Significant Deficiency Repeat
  • 1147799 2023-007
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $1.76M
14.275 Housing Trust Fund $1.63M
99.999 Low Income Housing Preservation and Resident Homeownership Act of 1990-Capital Grant $964,955
14.195 Section 8 Housing Assistance Payments Program $536,176
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $527,343
21.000 Section 607(e ) of the Neighborhood Reinvestment Corporation Act, As Amended $432,750
14.241 Housing Opportunities for Persons with Aids $380,000
14.239 Home Investment Partnerships Program $214,929