Finding Text
Condition:
Project management did not complete repairs needed to ensure that units meet housing quality standards. Project management did not complete periodic inspections at least annually.
Context:
As part of our audit procedure, we selected 9 units to evaluate housing quality standards. Seven selections resulted in HQS Unit Inspections. Work orders related to the seven HQS unit inspections were still opened and required repairs ,as documented on the work orders requests, were not completed as of June 30, 2023. One HQS Unit Inspection was not completed on an annual basis.
Criteria:
24 CRF 886.323(a) states that the owner shall maintain and operate the project so as to provide decent, safe, and sanitary housing and the owner shall provide all the services, maintenance, and utilities which he or she agrees to provide under the contract and the lease. Failure to do so shall be considered a material default under the contract and Regulatory Agreement, if any.
24 CRF 884.217 states that the PHA will inspect each contract unit and related facilities at least annually and at such other times as the PHA may determine to be necessary to assure that the Owner is meeting his obligation to maintain the units in Decent, Safe, and Sanitary condition and to provide the agreed upon utilities and other services.
Cause:
Project employees targeted their efforts on completing emergency repairs on current year inspections.
Effect:
24 CRF 886.323 ( e) states that if HUD notifies the owner that he has failed to maintain a dwelling unit in decent, safe, and sanitary condition, and the owner fails to take corrective action within the time prescribed in the notice, HUD may exercise any of its rights or remedies under the contract, or Regulatory Agreement, if any, including abatement of housing assistance payments (even if the family continues to occupy the unit) and rescission of the sale.
Auditor’s recommendation:
The project management should implement internal control procedures to assure that all units under contract are in a decent, safe and sanitary condition. Required repairs should be completed in a timely manner and properly documented on the work order request.
Views of Responsible officials and corrective actions:
The inspections of Los Húcares I, could not be completed annually, as required, due to staffing limitations. Work orders were not completed because many of the repairs are extraordinary, and personnel take more time to complete them. The maintenance staff is not sufficient for all necessary repairs, and the project requires additional funds to address all needs. We prioritized emergency repairs in both occupied and vacant units. This situation has been communicated to the owner; however, we have not received a response regarding the process to obtain additional funds to cover these needs. Therefore, we request the termination of our management contract effective August 14, 2023.
Audit Status:
Unresolved.