Lexington Housing Authority

24 CFR Part 985 Subpart B—Program Operation § 985.101—SEMAP certification. An PHA must submit the HUD‐required SEMAP certification form within 60 calendar days after the end of its fiscal year. The certification must be approved by PHA board resolution and signed by the PHA executive director. If the PHA is a unit of local government or a state, a resolution approving the certification is not required, and the certification must be executed by the Section 8 program director. During the audit, it was noted that the SEMAP was submitted on time, but the PHA board did not approve the SEMAP via board resolution. The PHA board did not approve the SEMAP via board resolution within 60 calendar days after the end of the fiscal year end. The PHA mistakenly missed approving the SEMAP. The Authority did not follow the federal guidelines relating to SEMAP certification. The SEMAP was prepared by the Authority, so just have the board approve the SEMAP via Board Resolution. None Management agrees and has a Corrective Action Plan identifying steps to resolve this finding.

Criteria: Federal regulations (24 CFR section 982.404) states a Public Housing Agency (PHA) must verify that an owner has corrected any life threatening issue found during a Housing Quality Standard (HQS) inspection within no more than 24 hours. For other defects, the PHA must verify the owner corrected the defect within no more than 30 calendar days (or any PHA approved extension). The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner correct the defect with in the period specified by the PHA and the PHA verifies the corrections.Condition: We noted that the PHA identified defects during annual HQS inspections which require corrective action within 30 calendar days following the discovery of such conditions. However, the PHA was unable to provide documentation that it reinspected the dwelling residences to confirm corrective action had taken place within the correct corrective period. Context: During our testing, we noted that 4 out of 18 failed inspections reviewed did not receive a reinspection with 24 hours or 30 days. With 181 total failed inspections, the extrapolated error amount would be 40 inspections. Cause: The Authority failed to properly monitor the HQS process to ensure the PHA's reinspection policies were being followed.Effect: The Authority is non-compliant with the federal regulations over this federal program, this could potentially result in significant operating and financial penalties. Recommendations: We suggest the Authority structure a system capable of properly overseeing compliance with regulations relative to these grants as well as maintaining more accurate and complete documentation of adherence to compliance. Management Views: Management Agrees; See Management's Corrective Action Plan.

Criteria: Financial Data Schedule (FDS) submission for unaudited financials are due within 2 months after the fiscal year end (24 CFR section 5.801).Condition: Management missed deadline for its unaudited submissions. Context: Upon review of the unaudited FDS submission, we noted that the date of the submission was passed the due date. Cause: Management did not make sure unaudited FDS submission was completed within the 60 day window. Effect: The Authority is not in compliance with HUD reporting requirements. Recommendations: The Authority should improve its internal controls over financial reporting by submitting its financial data on a timely basis. Management Views: We agree with this finding and have outlined our plan of action in our corrective action plan.

US Department of Housing and Urban Development 2021-001 - Housing Quality Standards Inspections & HQS Enforcement - 14.871 Special Test and Provisions - Significant Deficiency Criteria Federal regulations (24 CFR section 982.404) states a Public Housing Agency (PHA) must verify that an owner has corrected any life threatening issue found during a Housing Quality Standard (HQS) inspection within no more than 24 hours. For other defects, the PHA must verify the owner corrected the defect within no more than 30 calendar days (or any PHA approved extension). The PHA must not make any housing assitance payments for a dwelling unit that fails to meet the HQS, unless the owner correct the defect with in the period specified by the PHA and the PHA verfieis the corrections. Condition We noted that the PHA identified defects during annual HQS inspections which require corrective action within 30 calendar days following the discovery of such conditions. However, the PHA was unable to provide documentation that it reinspected the dwelling residences to confirm corrective action had taken place within the correct corrective period. And in two instances failed to abate the housing assistance payments during the period non-correction. Context During our testing, we noted that 4 out of 11 failed inspections reviewed did not receive a reinspection with 24 hours or 30 days. Additionally, we noted that 2 out of the 11 failed HQS inspections sent out HAP payments after abatement. Cause The Housing Authority failed to properly monitor the HQS process to ensure the PHA's reinspection policies were being followed and landlords not completing the defect did not have housing assistance payments abated. Effect - Non-Compliance Recommendations We recommend that the Housing Authority enforce its policies and procedures pertaining to re-inspection of leased units to ensure that such activities are performed in a timely manner. Management Views Management agrees and has a corrective action plan detailing the course of action to be taken in the next fiscal year.