Finding Text
Finding 2023-001 – Annual Physical Inspections Not Consistently Performed (Material Weakness, Material Non-Compliance)
Rural Rental Assistance Payments Program – Assistance Listing No. 10.427; Grant Period: Fiscal Year-End September 30, 2023
Criteria
The Multi-Family Housing Programs and Asset Management Handbook (HB-2-3560) and the Code of Federal Regulations (CFR) Title 7, Subtitle B, Chapter XXXV, Part 3560 applicable to the Department of Agriculture, Rural Rental Housing provides guidance and criteria under which the Rural Rental Housing Payments Program is to be administered and operated. Specifically, Chapter 5 of the Handbook and CFR 3560.103(b) specify the performance of annual unit inspections.
Condition and Perspective
During audit fieldwork, auditors requested annual inspection reports for ten sampled units. Authority management was unable to provide applicable annual inspections for three of the ten units requested. The units not inspected appeared to be isolated to one of the three Rural Rental Assistance properties.
Questioned Costs - None
Cause
Failure to perform inspections at one of three applicable sites. Failure to execute controls over property inspection requirements of the Program.
Effect
Non-compliance with federal requirements of the Program.
Recommendation
We recommend that the Authority perform annual inspections on each of its Program properties.
Management’s Response
The Authority will perform annual inspections on each of its Program properties. The Authority’s Executive Director, Jeff Sklet has assumed the responsibility of executing this corrective action as of July 31, 2024.