Finding Text
2022-005 Abatement related to Failed HQS Inspections Repeat of Finding 2021-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 8 Housing Choice Vouchers Assistance Listing Number: 14.871 Federal Award Identification Number and Year: Passthrough Funds Pass-Through Agency: BCHA and WHEDA Pass-Through Number(s): BCHA ? WI 186; WHEDA ? WI 901 Award Period: January 1, 2022 ? December 31, 2022 Compliance Requirement: Special Tests ? HQS Failed Inspections Type of Finding: Material Weakness in Internal Control over Compliance, Other Matter Criteria or Specific Requirement: Per CFR Sections 982.158(d) and 982.404, for units under HAP contract that fail to meet HQS, the Organization 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 PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: During our testing, we noted three tenants who had failed inspections where HAP was not appropriately abated. Questioned Costs: $13,098 Context: From a sample of 40 failed HQS inspections selected for testing, three had issues where HAP was not appropriately abated. One tenant was initially abated but then reinstated a month later without the unit having passed inspection. Two tenants were not appropriately reinspected due to human error and HAP was not abated as required until the inspections passed. Cause: For one tenant, the housing special accidentally reinstated HAP by clicking a box in the system. For two tenants, the inspector did not set up the reinspection dates until after the issues were found as part of compliance testing. Effect: A program participant could receive HAP or the Utility Allowance when they were not qualified due to the unit not passing the HQS inspection. Repeat Finding: Yes. Recommendation: We recommend that Management review their current internal control process over failed HQS inspections and HAP/Utility Allowance abatements to ensure they have a process in place to identify errors before the payments go out. Views of Responsible Officials: There is no disagreement with the audit finding. Refer to the Organization?s Corrective Action Plan for more information.