The HOME Program is authorized under Title II of the Cranston-Gonzales National Affordable Housing Act, as amended. Title 24, Code of Federal Regulations, part 92 implements the statutory authority to manage the HOME Program. Westmoreland County’s HOME program is compromised of a Consortium including the County of Westmoreland, the City of Jeannette and the City of Monessen. Westmoreland County acts as the Representative Member for all participants in the Westmoreland County Housing Consortium. Administration of the HOME Program is performed by the Redevelopment Authority of the County of Westmoreland. For Fiscal Years 1997, 1998, and 1999 the Westmoreland County Consortium was authorized HOME funding of $1,325,000, $1,632,000 and $1,762,000 respectively. HOME funds were allocated to the Consortium and CHDO’s as follows: Year Consortium (1) CHDO (2) Total 1997 $ 895,000 $430,000 $1,325,000 1998 1,152,000 480,000 1,632,000 1999 987,000 775,000 1,762,000 1. Consortium partners consists of Westmoreland County, City of Jeannette and Monessen, PA. 2. Community Housing Development Organization (CHDO) consists of Westmoreland CHDO, Inc., Mon Valley Initiative(MVI), Westmoreland Human Opportunities (WHO) and Connect, Inc. OBJECTIVE, SCOPE AND METHODOLOGY The primary objective of our review was to determine whether the Grantee is administering its HOME Program in compliance with HUD requirements. To accomplish our objective we interviewed HUD Community Planning and Development staff, reviewed field office files, and the County’s latest IPA report. We visited the County, Consortium members, and interviewed pertinent staff. We reviewed financial records, minutes of Board meetings, monitoring reviews, and other relevant data and tested transactions. Transactions were tested in the following areas: n Acquisition and Rehabilitation n New Construction n Tenant Based Rental Assistance n CHDO Activity n Matching Requirements n Home Ownership n Period of Affordability 2 We also judgmentally selected 10 properties recently rehabilitated by the Consortium and CHDO members to determine if rehabilitation work was completed as scheduled and if rehabilitation costs were within HUD prescribed limits. CRITERIA According to 24 CFR 92.504a.: “The participating jurisdiction is responsible for managing the day to day operations of its HOME Program, ensuring that HOME funds are used in accordance with all program requirements and written agreements, and taking appropriate action when performance problems arise. The use of State recipients, subrecipients, or contractors does not relieve the participating jurisdiction of this responsibility. The performance of each contractor and subrecipient must be reviewed at least annually.” 24 CFR 92.508 requires: “Each participating jurisdiction must establish and maintain sufficient records to enable HUD to determine whether the participating jurisdiction has met the requirements of this part.” 24 CFR 92.251a.1 states: “Housing that is constructed or rehabilitated with HOME funds must meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion…” To accomplish this the Consortium members and subrecipients perform a property inspection and a work write-up of necessary repair work. 24 CFR 85.36(2) requires: “Grantees and subgrantees will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” 24 CFR 92.254a.2 requires : “The housing must be modest housing as follows: ii. In the case of acquisition with rehabilitation, the housing has an estimated value after rehabilitation that does not exceed 95 percent of the median purchase price for the area…” RESULTS OF REVIEW Generally, we found the County is administering its HOME Program in compliance with HUD requirements. However, in our review we did identify one area where the County needs to improve its monitoring efforts to ensure HOME properties meet rehabilitation standards. Specifically, we found CHDO’s were either not completing HOME rehabilitation property inspections or when inspections were completed they were not accurate. Also, property inspections completed by the County on its own rehabilitation projects were not always accurate. This occurred because the County had no quality inspection process in place to monitor the rehabilitation activities of its CHDO’s nor was it providing adequate quality control oversight over inspections it had completed on its own rehabilitated properties. As a result, County and CHDO rehabilitated HOME properties did not always meet local building code or required rehabilitation standards, and some program participants may be indebted for work which was not completed or done properly. 3 Property Rehabilitation To quantify the effect the lack of monitoring had on the program, we judgmentally selected and inspected ten properties, six completed by CHDO’s and four completed by the Consortium members. We found deficiencies in all six of the CHDO properties and one of the Consortium properties as summarized below and detailed in Appendix A. County management accompanied the OIG on property inspections and generally agreed with the cited deficiencies. Inspection Results Entity 1/ Property 2/ Work Items Not Done Work Items Not Correctly Completed Westmoreland CHDO Inc. 3/ 1 X X 2 X Mon Valley Initiative (CHDO) 3 X X Westmoreland Human 4 X X Opportunities (CHDO) 3/ 5 X X 6 X X Westmoreland County 7 X (Consortium) 8 No Deficiencies Noted 9 No Deficiencies Noted 10 No Deficiencies Noted 1/ Properties 1 - 6 above are administered by the CHDOs and 7 - 10 by the Consortium 2/ Property addresses and additional details of deficiencies were provided to the County for corrective action 3/ The Westmoreland CHDO and the Westmoreland Human Opportunities CHDO’s could not provide documentation evidencing the properties were inspected For properties rehabilitated by CHDO’s, there was no evidence the County had implemented a routine property inspection procedure as part of its overall monitoring system. Furthermore, the County had not implemented adequate quality control measures (quality control inspections) under its own Homeowner Rehabilitation Program to ensure the work of contractors and rehabilitation inspectors was routinely monitored and evaluated by appropriate supervisory personnel. County officials indicated they were not monitoring these aspects of the program and acknowledged the need to correct the existing deficiencies and implement a quality control program to ensure properties are rehabilitated according to program requirements. 4 Other Issues In our review of the CHDO activity files, we found the Westmoreland Human Opportunities (WHO) CHDO was not obtaining post rehabilitation property appraisals as required by the HOME requirements. Consequently, the County had no assurance that the properties remained modest housing as required by the HOME requirements. The Executive Director of WHO told us that he was not aware of the appraisal requirements, and agreed to obtain appraisals for all current projects. The City of Jeannette, a Consortium member, places applicants on a waiting list when they initially express an interest in the program. This often precedes submission of a dated written application. However, the City did not document an applicant’s initial contact and therefore, could not ensure applicants were selected according to its own procedures. City staff said they would now maintain documentation evidencing an applicant’s initial contact. ****** In summary, the County can improve its HOME Program by ensuring its monitoring system requires quality control inspections are completed on CHDO and County rehabilitated properties. This will ensure contracted rehabilitation work is completed and meets applicable building code and rehabilitation standards. Recommendations: We recommend your office: 1A. Require the County to complete the necessary repairs for the properties listed in Appendix A and establish a quality inspection program to ensure properties rehabilitated with HOME funds meet applicable codes and are rehabilitated according to contract requirements. 1B. Take appropriate action to ensure the Westmoreland Human Opportunities (WHO) CHDO obtains after rehabilitation property appraisals and the City of Jeannette maintains documentation evidencing its selection of program participants. We discussed the results of the review with the County and Community Planning and Development staff in the Pittsburgh Area Office who generally agreed with our results. If you have any questions please contact Allen Leftwich, Assistant District Inspector General for Audit at (215) 656-3401. 5 Appendix A Inspection Results Grantee/ CHDO Inspection Results Property Location 1/ HOME Program Amount CHDO, Inc. Work Items Not Done Correctly Greensburg, PA • Caulking around the bathtub located on the first floor was not adequate Rental Rehab resulting in bulging of the tub surrounding. $ 132,729 Work Items Not Completed Per Rehabilitation Scope of Services • Closet and bedroom doors not installed. • Five of 6 basement windows were not replaced. CHDO, Inc. Work Items Not Done Correctly Greensburg, PA • The contractor did not connect the drain pipe to the down spout Rental Rehab $ 79,582 MVI Work Items Not Done Correctly Monessen, PA • The rear deck did not have a banister to meet HQS code. Home Ownership Work Items Not Completed Per Rehabilitation Scope of Services $47,828 • Damaged foundation wall at left side of structure was not repaired • Full length oval railings on the steps to the basement were not completed. WHO Work Items Not Done Correctly Greensburg, PA • Rear deck size did not meet contract requirements. Home Ownership Work Items Not Completed Per Rehabilitation Scope of Services $42,677 • Installation of new hand rails with necessary brackets was not completed. • Metal closet organizer in the bathroom was not installed. • The furnace did not meet the minimum 10 years warranty requirements. WHO Work Items Not Done Correctly Greensburg, PA • Water continues to leak in basement. Home Ownership • Handrails were not installed in the front porch. $39,429 • The contractor only extended the sewer pipe into the attic, not beyond the roof level as required. This has created sewer smell in the attic and bedroom according to the homeowner. Work Items Not Completed Per Rehabilitation Scope of Services • Three way switches at the first floor stairwell and between interior and exterior basement door were not installed. • Range hood was not installed. • Rear sidewalk was not repaired. Other • Work write-up was identical to other properties completed by CHDO. WHO Work Items Not Done Correctly Jeannette, PA • Drywall and patch work were done poorly. We noted seam cracks on drywall Home Ownership in the west wall of rear bedroom. $48,525 • Windows in the bathroom were not cut properly leaving uneven size in the window sill. 6 Grantee/CHDO Property Location 1/ HOME Program Inspection Results Amount WHO • Gutter was not installed properly. Jeannette, PA Work Items Not Completed Per Rehabilitation Scope of Services Home Ownership • Grass carpet for the front porch floor was not installed. $48,525 • One window was not installed • Kitchen floor tiles were bulging. According to County Inspection supervisor accompanying OIG on inspection, new sub flooring was not installed. • Basement was not painted. • Chimney was not rebuilt or repaired. County Work Items Not Completed Per Rehabilitation Scope of Services West Newton, PA • GFI outlets were not installed in the basement. Owner Occupied • Work write-up required two bedroom windows. However, there was $ 20,962 only one window in bedroom. 1/ Property addresses and additional details of deficiencies were provided to the County for corrective action 7 Appendix B 8 9 Appendix C Distribution Director of Community Planning and Development Division, Pittsburgh Area Office, 3ED Secretary’s Representative, Mid-Atlantic, 3AS (Acting) Audit Liaison Officer, 3AFI Pittsburgh Area Coordinator, 3ES Principal Staff The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, 340 Dirksen Senate Office Building, US Senate, Washington, DC 20510 The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs, 706 Hart Senate Office Building, US Senate, Washington, DC 20515 The Honorable Dan Burton, Chairman, Committee on Government Reform, House of Representatives, 2185 Rayburn Building, Washington, DC 20515 The Honorable Henry Waxman, Ranking Member, Committee on Government Reform, House of Representatives, 2204 Rayburn Building, Washington, DC 20515 Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O’Neil House Office Building, Washington, DC 20515 Director, Housing and Community Development Issue Area, US General Accounting Office, 441 G Street, NW, Room 2474, Washington, DC 20548 ATTN: Stanley Czerwinski Mr. Steve Redburn, Chief, Housing Branch, Office of Management and Budget, 725 17th Street, NW, Room 9226, New Executive Office Building, Washington, DC 20503 Mr. William E. Mitchell II, Assistant Director, Department of Planning and Development, Courthouse Square, 2 N. Main Street, Suite 601, Greensburg, PA 15601 10
Westmoreland County Consortium HOME Program Westmoreland, Pennsylvania
Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-08-21.
Below is a raw (and likely hideous) rendition of the original report. (PDF)