Finding Text
Finding 2022-003 N. Special Tests and Provisions ? N17. Environmental Contaminants Testing and Remediation Identification of the Federal Program: U.S. Department of Housing and Urban Development (HUD) Assistance Listing No. 14.881 ? Moving to Work (MTW) Demonstration Program Public and Indian Housing (Public Housing) Program Year: January 1, 2022 through December 31, 2022 Program No.: IL002-001-00022D Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR section 5.703 states, ?HUD housing must be decent, safe, sanitary and in good repair. Owners of housing described in ?5.701(a), mortgagors of housing described in ?5.701(b), and PHAs and other entities approved by HUD owning housing described in ?5.701(c), must maintain such housing in a manner that meets the physical condition standards set forth in this section in order to be considered decent, safe, sanitary and in good repair. These standards address the major areas of the HUD housing: the site; the building exterior; the building systems; the dwelling units; the common areas; and health and safety considerations.? Condition: For Uniform Physical Conditions Standards (UPCS) and environmental inspections, management provided populations; however, they were unable to provide evidence that the populations were complete and accurate. Sixty failed UPCS inspections and forty failed environmental inspections were selected for compliance testing out of the total 9,975 failed UPCS inspections and 216 failed environmental inspections, respectively, reported by the Authority. ? Internal controls were not in place to ensure that failed UPCS and environmental inspections were remediated. ? For 35 of the 60 (58%) failed UPCS inspections and 14 of the 40 (35%) failed environmental inspections tested, the Authority did not maintain adequate supporting documentation to evidence that the safety/environmental concern from the failed inspection was remediated. Cause: Internal controls were not in place over the creation and follow-up of work orders related to failed UPCS and environmental inspection reports to ensure the identified safety/environmental concerns were remediated. Effect or Potential Effect: HUD housing may not meet the physical condition standards and environmental contaminants may not get remediated. Questioned Costs: None. Context: The Public Housing program had a total of 19,146 UPCS inspections performed during the year ended December 31, 2022, of which 9,975 were failed inspections that required remediation, 1,801 were inconclusive, and 729 were canceled. The Public Housing program had a total of 256 environmental inspections performed during the year ended December 31, 2022, of which 216 required remediation and 11 were inconclusive. Identification as a Repeat Finding, if Applicable: The finding is a repeat of finding 2021-003 from the prior year. Recommendation: The Authority should implement internal controls over the monitoring of failed UPCS and environmental inspections to ensure that identified safety/environmental concerns are remediated. Adequate supporting documentation should be maintained of all remediation activities. Views of Responsible Officials: Management concurs with the finding and in 2023 began implementation of a plan to correct the finding.