Finding Text
Finding Reference Number: 2023-004
Title and Assistance Listing Number of Federal Program: 14.239 HOME Investment Partnerships
Finding Resolution Status: IN PROCESS
Information on Universe Population Size: 17 rental units
Sample Size Information: 6 rental units
Identification of Repeat Finding and Finding Reference Number: N/A NONE.
Criteria:
During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)).
Statement of Condition:
Audit procedures performed in connection with the compliance requirements associated with the HOME Investment Partnerships program revealed that bi- annual on-site inspections had not been performed.
Cause:
Due to improper oversight over compliance and turnover of site level staff the inspections were not completed as required.
Effect or Potential Effect:
Management is not in compliance with respect to the inspection requirements of the HOME Investment Partnerships program.
Auditor Non-Compliance Code: Z - Other
Questioned Costs: $0
FHA/Contract Number: 127-HD025 S3800-040: Questioned Costs: $0
Reporting Views of Responsible Officials:
After discussion with the auditor, senior management understands the importance of having a properly functioning monitoring system in place to ensure that housing quality unit inspections are performed on an annual basis.
Context:
We tested 6 units for compliance with the inspection requirements and 6 out of 6 files lacked documentation of inspection reports. When we broadened out our request for inspections, it was revealed that unit inspections had not occurred as required under the program requirements; however, the Corporation received a passing grade from HUD REAC as a result of its last physical inspection.
Effect: The Corporation was not in compliance with HUD requirements with respects to the housing quality and inspection requirements.
Recommendation: Management should design policies and procedures to ensure that compliance requirements over housing quality and bi-annual unit inspections are met.
Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: Management agrees with the finding and the auditor’s recommendation, and will take the necessary steps to mitigate further non- compliance.
Response Indicator: Agree (A)
Completion Date: November 27, 2023
Response:
Management agrees with the recommendation of the auditor and plans to take corrective actions to ensure that unit inspections of every unit is performed on at least a bi-annual basis in accordance with HUD regulations.