Finding 972718 (2023-001)

Finding 2023 001 – Special Tests and Provisions – HQS Enforcement Federal Program: Housing Choice Voucher Program (HCVP) ALN Number: 14.871 Federal Agency: Department of Housing and Urban Development Federal Award Year: 2020 Grant Number: CA104VO/CA104AF Pass Through Entity: None Criteria: 24 CFR 985.3 – Indicators, HUD verification methods and ratings. (f) HQS enforcement. (1) This indicator shows whether, following each HQS inspection of a unit under contract where the unit fails to meet HQS, any cited life threatening HQS deficiencies are corrected within 24 hours from the inspection and all other cited HQS deficiencies are corrected within no more than 30 calendar days from the inspection or any PHA approved extension. In addition, if HQS deficiencies are not corrected timely, the indicator shows whether the PHA stops (abates) housing assistance payments beginning no later than the first of the month following the specified correction period or terminates the HAP contract or, for family caused defects, takes prompt and vigorous action to enforce the family obligations. (24 CFR 982.404) Title 45 US Code of Federal Regulations Part 75 (45 CFR part 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303 also states that nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition and Context: During our testwork over HQS enforcement requirements, we selected a sample of 40 failed HQS inspections out of a population of 569 failed HQS inspections. We noted that for two samples the City did not stop housing assistance payments (HAP) as required per the above criteria. The City made payments of $1,972 that were not in compliance with the above requirements. Cause and Effect: The City’s controls are not operating effectively to ensure that HAP is abated beginning no later than the first of the month following the specified correction period or terminates the HAP contract or, for family caused defects, takes prompt and vigorous action to enforce the family obligations. As a result, the City was not in compliance with HAP guidelines. Questioned Costs: The City made payments of $1,972 that were not in compliance with the requirements. Isolated or Systemic: Systematic Whether the Sampling was a Statistically Valid Sample: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend that the City strengthen their processes and controls in place to comply with HQS enforcement requirements.