Finding 592362 (2022-002)

Material Weakness
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-03-30

AI Summary

  • Core Issue: The Authority failed to enforce timely corrections of Housing Quality Standards (HQS) deficiencies, impacting compliance with federal requirements.
  • Impacted Requirements: The Authority did not require owners to fix life-threatening deficiencies within 24 hours or other issues within 30 days, leading to improper Housing Assistance Payments (HAP).
  • Recommended Follow-Up: Implement controls to ensure timely correction of HQS deficiencies and proper abatement of HAP for non-compliant units.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Numbers: 14.871/14.879 Federal Award Identification Number and Year: SC911VO - 2022 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Material Noncompliance (Modified Opinion) Criteria or specific requirement: For units under HAP contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Authority did not require HQS deficiencies to be corrected within the required timeframe. The Authority did not abate units that failed to correct HQS deficiencies within the required timeframe. Questioned costs: Known questioned costs of $7,185 were calculated based on the HAP payment for units that should have been abated, multiplied by the number of months where HAP was incorrectly paid. Unable to determine likely questioned costs. Context: Exceptions were noted in 16 out of 40 failed inspections: ? The Authority did not require the owner to correct HQS deficiencies within the required timeframe for 16 out of 40 failed inspections. ? The Authority did not properly abate HAP for 3 out of 40 failed inspections. The sample was statistically valid. Cause: The Authority did not reinspect or abate units timely. Effect: The Authority is not in compliance with HQS enforcement requirements. Repeat Finding: No. Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.

Categories

Questioned Costs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 15915 2022-001
    Material Weakness
  • 15916 2022-002
    Material Weakness
  • 15917 2022-003
    Significant Deficiency
  • 15918 2022-004
    Significant Deficiency
  • 15919 2022-001
    Material Weakness
  • 15920 2022-002
    Material Weakness
  • 15921 2022-003
    Significant Deficiency
  • 15922 2022-004
    Significant Deficiency
  • 15923 2022-001
    Material Weakness
  • 15924 2022-002
    Material Weakness
  • 15925 2022-003
    Significant Deficiency
  • 15926 2022-004
    Significant Deficiency
  • 15927 2022-001
    Material Weakness
  • 15928 2022-002
    Material Weakness
  • 15929 2022-003
    Significant Deficiency
  • 15930 2022-004
    Significant Deficiency
  • 15931 2022-005
    Significant Deficiency
  • 592357 2022-001
    Material Weakness
  • 592358 2022-002
    Material Weakness
  • 592359 2022-003
    Significant Deficiency
  • 592360 2022-004
    Significant Deficiency
  • 592361 2022-001
    Material Weakness
  • 592363 2022-003
    Significant Deficiency
  • 592364 2022-004
    Significant Deficiency
  • 592365 2022-001
    Material Weakness
  • 592366 2022-002
    Material Weakness
  • 592367 2022-003
    Significant Deficiency
  • 592368 2022-004
    Significant Deficiency
  • 592369 2022-001
    Material Weakness
  • 592370 2022-002
    Material Weakness
  • 592371 2022-003
    Significant Deficiency
  • 592372 2022-004
    Significant Deficiency
  • 592373 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Covid-19 Emergency Rental Assistance $230.71M
14.195 Section 8 Housing Assistance Payments Program $149.95M
14.239 Home Investment Partnerships Program $87.49M
21.026 Covid-19 Homeowner Assistance Fund $14.53M
14.871 Section 8 Housing Choice Vouchers $14.48M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $9.30M
14.275 National Housing Trust Fund $1.69M
14.871 Section 8 Housing Choice Vouchers- Emergency Housing Vouchers $564,015
14.871 Section 8 Housing Choice Vouchers - Cares $513,332
14.879 Mainstream Vouchers $124,031
14.228 Hera Neighborhood Stabilization Program $3,867