Finding 584048 (2023-002)

Department of Housing and Urban Development CFDA #14.871 Section 8 Housing Choice Vouchers Applicable Federal Award Number and Year – 2023 Special Tests and Provisions ‐ HQS Enforcement Significant Deficiency in Internal Control over Compliance Criteria – For units under a HAP contract that fail to meet HQS requirements, the PHA must require the owner to correct life threatening HQS deficiencies within 24 hours after the inspection and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the landlord does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition – During our testing of compliance for HQS Enforcement, we identified 1 instance in which the landlord did not correct the cited HQS deficiencies within the specified correction period and the Housing Authority of Billings, Montana failed to abate the HAP payment timely. Cause – The Housing Authority of Billings, Montana’s internal controls related to the proper abating of HAP payments was not operating as designed. Effect – A weakness in internal control over compliance resulted in the Housing Authority of Billings, Montana failing to abate the HAP payments to a landlord as required by HUD. Questioned Costs – None reported. Context/Sampling – A non‐statistical sample of 33 failed inspections were selected for testing. 1 out of the 33 failed inspections did not have the HAP payment abated timely. Repeat Finding from Prior Year – No. Recommendation – We recommend that the Housing Authority of Billings, Montana establish controls to ensure that HAP payments are abated timely. Views of Responsible Officials – Management agrees with the finding.