Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Numbers: 14.871 and 14.879
Federal Award Identification Number and Year: FL080; 2023
Award Period: October 1, 2022 to September 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance,
Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: For units under HAP contract that fail to meet HQS, the PHA 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 abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). In addition, all HCV units are required to be inspected annually.
The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)).
Condition: During the testing of 120 Housing Voucher Cluster tenant files, certain special provision compliance deficiencies were noted as summarized below:
Failed HQS Inspections
Number of Instances -- Finding
7 -- The Authority did not properly abate HAP after the second failed inspection and/or the tenants passed inspection reports and dates were missing and it could not be verified if the HAP payments were properly abated for the units.
Annual HQS Inspections
Number of Instances -- Finding
19 -- The annual inspection was not performed in a timely manner, the Authority failed to enforce regulation, or the inspection was unable to be located.
2 -- The Authority's HQS inspection was missing
Questioned Costs: Undeterminable; estimated to be over $25,000
Context: Out of 60 files tested for failed inspections, 7 files contained errors as noted above. Out of 60 files tested for annual inspections, 19 files contained errors as noted above.
Cause: The Authority does not have adequate procedures in place to ensure units are inspected timely or to ensure that units with housing quality standard deficiencies are not paid housing assistance payments.
Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards.
Repeat Finding: This is a repeat finding from previous years. The finding numbers are 2017-002, 2018-002, 2019-002, 2020-002, 2021-002, and 2022-002.
Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS inspections. We recommend the Authority to hire outside consultants to assist with inspections or increase staffing in this area.
Views of Responsible Officials: There is no disagreement with the audit finding.