Issue Date
April 25, 2005
Audit Report Number
2005-BO-1003
TO: Donna J. Ayala, Director, Office of Public Housing, 1APH
FROM:
John Dvorak, Regional Inspector General for Audit, 1AGA
SUBJECT: Audit of Milford, CT, Housing Authority’s Capital Fund Program, Development
Grants for Scattered Sites, Section 8 Voucher Program, and Specific
Administrative Policies and Procedures
HIGHLIGHTS
What We Audited and Why
As part of our annual plan, we audited the Milford Housing Authority (Authority)
of the City of Milford, CT, to determine whether the Authority’s Capital Fund
program was operating in an effective and efficient manner and in compliance
with its U.S. Department of Housing and Urban Development (HUD) Annual
Contributions Contract, applicable laws, and contractual requirements. Our initial
survey results identified additional risk areas. Therefore, we expanded the scope
of our audit to include the Authority’s public housing development grants for
scattered sites, Section 8 Voucher program, and specific administrative policies
and procedures.
The audit was conducted between June 2003 and February 2004 and covered the
period January 1, 2000, through December 31, 2003. When appropriate, the audit
was extended to include other periods.
We conducted our audit in accordance with generally accepted government
auditing standards.
What We Found
Our audit identified eight findings, resulting in questioned costs and opportunities
for funds to be put to better use totaling $1,525,796 (see appendix A). We
determined that the Authority failed to:
• Address exigent health and safety issues at its Foran Towers project;
• Manage its Harrison Avenue Renovation Project in an effective and
efficient manner;
• Use development funds for scattered site units on necessary and needed
expenditures, maintain an inventory for the prematurely replaced or newly
purchased scattered site equipment, and comply with Section 504
handicapped requirements for the development of scattered site units;
• Comply with Federal requirements and its own contracts for legal services
incurred;
• Implement adequate management controls and procedures over Section 8
inspections;
• Lease-up Section 8 units at an acceptable rate;
• Comply with HUD procurement regulations and its own procurement
policy; and
• Obtain the required HUD approval for the Executive Director’s 5-year
employment contract and establish performance measurements and
execute performance evaluations for the Executive Director, properly
charge HUD programs for personal use of the Executive Director’s
automobile, comply with requirements for executive sessions, and
perform employee evaluations for staff.
The above conditions occurred because the Executive Director and Board of
Commissioners failed to establish policies and management controls necessary to
comply with the Annual Contributions Contract. As a result, the Authority did
not provide safe, decent, and affordable housing for many families, made
questionable expenditures, and lost opportunities to put funds to better use.
2
What We Recommend
We recommend that the Authority:
• Prioritize the repair and/or replacement of the brick façade and sanitary
piping at Foran Towers using available operating reserves and Capital
Funds;
• Reimburse the Scattered Site Development fund $135,824 from
nonfederal funds for the premature replacement of kitchen appliances,
kitchen cabinets and countertops, furnaces, and roofs;
• Comply with the Section 504 handicapped-accessible regulations covering
the development of scattered sites;
• Reimburse its applicable programs from nonfederal funds for the
ineligible legal costs and develop adequate management controls over
legal expenditures, including the requirement to obtain the concurrence of
HUD’s Regional Counsel before incurring any legal costs related to
matters involving litigation;
• Reimburse HUD $26,280 from nonfederal funds for the Section 8
administrative fees collected by the Authority when its Section 8 program
units did not meet housing quality standards;
• Implement an effective system to ensure all outstanding housing quality
standards deficiencies are monitored and corrected within the required
time. This will result in future housing assistance payments being put to
better use than the $280,628 paid for substandard housing;
• Submit a monitoring plan to ensure they use all available Section 8
funding;
• Implement controls to ensure it complies with HUD regulations and its
own procurement policy in awarding competitive and noncompetitive
contracts;
• Submit the Executive Director’s current contract for HUD approval and
establish specific goals and measurements to evaluate the Executive
Director’s performance; and
• Reimburse its applicable programs from nonfederal funds $25,347 for the
Executive Director’s personal use of vehicle.
3
For each recommendation without a management decision, please respond and
provide status reports in accordance with HUD Handbook 2000.06, REV-3.
Please furnish us copies of any correspondence or directives issued because of the
audit.
Auditee’s Response
We held an exit conference with the Milford Housing Authority (Authority) on
January 20 and 21, 2005. We provided the Authority our discussion draft report
during the exit conference.
On January 27, 2005, we requested the Authority to provide comments on our
draft audit findings by February 11, 2005. At the Authority’s request, we
provided an 11-day extension for submission of comments. The Authority’s
written response to the draft report was received on February 22, 2005.
The Authority disagreed with the majority of the findings and recommendations,
and provided only limited additional factual data over what had been provided
during the course of the audit to support their disagreement. However, we
withdrew two recommendations related to Finding 2 and modified several others
based on the factual data provided in the response. In addition, the Authority has
taken corrective action on several recommendations that should correct the cited
deficiencies. We included the complete text of the Authority’s response, and our
comments to the Authority’s response in appendix B of this report. The Authority
also submitted approximately 250 exhibits with their response, but the exhibits
added little support for the responses. The exhibits were not included as part of
this report, and will be available to HUD upon request and to the public through a
freedom of information request.
4
TABLE OF CONTENTS
Background and Objectives 6
Results of Audit
Finding 1: Authority Failed To Address Exigent Health and Safety Issues at 7
Foran Towers
Finding 2: The Authority Failed To Manage Its Harrison Avenue Renovation 12
Project in an Effective and Efficient Manner
Finding 3: The Authority’s Use of Development Funds Was Unnecessary and 16
Wasteful
Finding 4: The Authority Failed To Comply with Federal Requirements and Its 20
Own Contracts for Legal Services
Finding 5: The Authority Lacked Adequate Management Controls and 28
Procedures Over Section 8 Inspections
Finding 6: The Authority Failed To Lease Section 8 Units at an Acceptable Rate 35
Finding 7: The Authority Failed To Comply with HUD Procurement 39
Regulations and its Own Procurement Policy
Finding 8: The Authority Had Deficiencies in Several Administrative Policies 46
and Procedures
Scope and Methodology 53
Internal Controls 56
Follow-up on Prior Audits 57
Appendixes
A. Schedule of Questioned Costs and Funds To Be Put to Better Use 58
B. Auditee Comments and OIG’s Evaluation 59
C. Schedule of Premature Replacements for Scattered Sites 112
D. Schedule of Federal Subsidies Expended for Substandard Housing 114
E. Schedule of Questioned Administrative Fees the Authority 116
Received To Manage Substandard Housing
5
BACKGROUND AND OBJECTIVES
The Milford Housing Authority (Authority) of the City of Milford, CT, was created in
accordance with Section 8-40 of the Connecticut General Statutes to provide low-income public
housing for qualified individuals. The Authority contracted with the Federal Government, acting
through the U.S. Department of Housing and Urban Development (HUD), for financial
assistance for low-income public housing pursuant to the United States Housing Act of 1937, as
amended.
The Authority also contracted with the State of Connecticut Department of Economic and
Community Development for the financial assistance of housing projects for the elderly through
capital grants and/or loans pursuant to Sections 8-70 and 8-114a of the Connecticut General
Statutes.
At the completion of our audit fieldwork, the Authority owned 313 units of Federal low-income
housing and administered a regional Section 8 program with 266 units. The Authority’s main
office is located at 75 DeMaio Drive, Milford, CT. The daily operations are managed by the
Executive Director, who was appointed by a five member Board of Commissioners. The Board
of Commissioners was appointed by the City’s Mayor. The Authority has a staff of 11
employees. Revenue for fiscal year 2003, the last period for which audit financial statements
were available, was $5.3 million.
Since fiscal year 2000, HUD’s Capital Fund program has provided annual funding to public
housing authorities. The funds provide for capital and management activities, including
modernization, correcting physical deficiencies, financing, and development of public housing.
The Capital Fund grants are awarded noncompetitively and are based on a formula that considers
the existing and future modernization needs of a public housing authority.
The Authority applied for and received two grants from HUD for $1,696,950 and $1,835,900 to
develop scattered site low-income public housing in Milford, CT. Efforts to develop the housing
with these grants was rejected in 1995 by the Authority’s Board of Commissioners. This action
resulted in lawsuits filed by the U.S. Department of Justice and the National Association for the
Advancement of Colored People in the fall of 1998. Subsequently, a Settlement Agreement was
reached between the parties whereby the Authority agreed to develop up to 28 units of low-
income public housing over the course of 3 years. HUD agreed to consolidate the development
grants into one development program (CT26-P030-009-91F) for $3,532,850. In addition,
$254,241 of 1998 Capital Grant Program funds were reallocated for development purposes for a
total budget of $3,787,091.
Our overall audit objective was to determine whether the Authority was operating its Capital
Fund, Development Fund, and Section 8 Voucher programs in an effective and efficient manner
and in compliance with HUD regulations, applicable laws, and contractual requirements. We
also reviewed specific administrative policies and procedures at the Authority.
6
RESULTS OF AUDIT
Finding 1: The Authority Failed To Address Exigent Health
and Safety Issues at Foran Towers
The Authority failed to address exigent health and safety issues at the Foran
Towers development 1, as required by the Annual Contributions Contract. We
identified $838,000 in funds that should be put to better use by reallocating the
funds from the Authority’s Harrison Avenue development 2 to Foran Towers,
which continues to have a more urgent and immediate need.
These conditions occurred because the Authority’s Executive Director and Board
of Commissioners gave the Harrison Avenue Phase III renovations priority over
Foran Towers. The Executive Director and the Authority’s General Legal
Counsel continually asserted to HUD officials that the Authority had a binding
contract for Phase III of Harrison Avenue at a cost of $838,000. However, the
Authority had removed Phase III work from the contract and was in dispute as to
the contract credit amount. They also stated that it would cause serious legal
problems and cost the Authority a great deal of money if it attempted to break its
contract. They further stated that the New Haven, CT, Legal Assistance Branch
of the National Association for the Advancement of Colored People would likely
sue the Authority if program funds were reallocated from Harrison Avenue to
Foran Towers. We found no evidence to support their claims. As a result, the
elderly tenants at Foran Towers were exposed to unsafe and unsanitary conditions
since 1999.
HUD Requirements
The Annual Contributions Contract requires the Authority to operate each project in
a manner that promotes serviceability, efficiency, economy, and stability. The
Annual Contributions Contract states in part that the Housing Authority shall at all
times develop and operate each project solely for the purpose of providing decent,
safe, and sanitary housing.
The health and safety concerns at Foran Towers include a damaged brick façade
on the building’s exterior and the poor condition of sanitary piping. Both are
considered to be emergency repair items and a potential threat to human life. In
addition, the roof and windows need replacement.
1
The Foran Towers development is a housing project for the elderly.
2
The Harrison Avenue development is a family housing project.
7
Harrison Avenue Renovation
Contract
On November 2, 2001, the Authority awarded a contract for $2,340,000 to
complete renovations of 45 family units at its Harrison Avenue development. The
contract was divided into three phases. Phases I and II were for the renovation of
25 units, and Phase III was for the renovation of the remaining 20 units.
The Authority Failed To
Properly Deduct Phase III
The Authority’s General Legal Counsel established a two-step process to issue a
notice to proceed with the construction because the Authority did not have
sufficient funds to complete the entire project. The Authority requested HUD
approval to issue bonds by pledging future Capital Fund program grants as
collateral. The two step-process was intended to provide the Authority with time
to deduct Phase III and its $838,000 cost if HUD did not approve the issuance of
bonds. The last date on which the Authority could exercise the deduct option
without penalty was February 28, 2002. If the bonds were approved, there would
be a second step, meaning a notice to proceed for Phase III would be issued.
HUD did not approve the bonds, and the Authority failed to exercise the option to
deduct Phase III in writing before the expiration date.
The Authority’s General Legal Counsel stated that he notified the contractor by
telephone, leaving a voicemail on February 28, 2002, that the Authority was
exercising the option to deduct Phase III. However, the contractor disputed this
assertion. This resulted in a contract dispute for $91,938 and legal costs incurred
by both parties. Although the dispute was settled in favor of the Authority we
maintain that had the Authority exercised the option in writing by February 28,
2002, there would have been no dispute (see finding 2).
We asked the Executive Director to explain his involvement in notifying the
contractor that the Authority would not be going forward with Phase III. The
Executive Director did not respond to our inquiries.
8
Serious Health and Safety
Issues at Foran Towers not
Addressed
Serious health and safety issues at Foran Towers were not addressed. The
Authority must prioritize repairs at Foran Towers before considering renovations
at other projects. There are serious health and safety issues at Foran Towers such
as a damaged brick façade and poor sanitary piping that have not been properly
addressed by the Authority. Based on the Real Estate Assessment Center’s
inspections dating back to 1999 and four engineering studies, the poor condition
of the brick façade is considered to be a major concern, and at least three of the
engineering studies showed that the conditions were a threat to human life. In
addition to a chain link fence installed as a result of the first engineering study,
the U.S. Army Corps of Engineers (Corps) determined that the front of Foran
Towers was an area of particular concern. As an interim measure, the Corps
requested that a protective canopy be installed along the front of the building to
protect residents and visitors. The Corps stated that this measure was intended as
only a temporary solution since the condition of the brick façade would continue
to deteriorate, suggesting that permanent replacement or repairs be completed as
soon as possible. The following photograph of Foran Towers shows the
protective canopy and fencing.
The most recent engineering study, completed on February 11, 2004,
recommended that additional safety measures be initiated within the next 12
months. This study estimated costs to correct the overall masonry construction
deficiencies, including window replacement, ranging from $829,615 to
9
$1,171,200. The study did not evaluate the condition of the building’s sanitary
piping. However, a previous engineering study estimated the cost of replacing the
piping at $134,200.
HUD officials have repeatedly requested that the serious health and safety issues
at Foran Towers be addressed. The Authority has continually asserted the lack of
funds due to a binding contract for Harrison Avenue renovations. However, as
stated above, the Authority removed Phase III work from the contract in 2002 but
is in dispute as to the contract credit amount (see finding 2). As a result, the
elderly tenants at Foran Towers were exposed to unsafe and unsanitary
conditions.
Since Phase III is no longer an option, the $838,000 set aside for Phase III could
realistically be used for repairs at Foran Towers. In a letter, dated March 27,
2003, the Director of the New England Office of Public Housing informed the
Authority that in addition to Capital Funds, funding sources for Foran Towers
could include operating reserves, excess Section 8 administrative fees, and other
unrestricted cash.
Available Funds of $1,234,595
To determine Operating Reserves available for Foran Towers, we used an analysis
of the availability of operating reserves performed by the Authority's Fee
Accountant and updated information from the Independent Public Accountant’s
report for fiscal year 2003. According to our analysis, the Authority would have
approximately $388,373 for general purposes as of December 31, 2003.
As of December 31, 2003, the Authority had $1,321,387 in unexpended Capital
Funds program funds. The estimated amount required to complete Phases I and II
at Harrison Avenue was $475,165. As a result, available Capital Funds were
estimated to be $846,222 ($1,321,387 minus $475,165). Therefore, the Authority
had a total of $1,234,595 ($388,373 plus $846,222) available to make necessary
repairs at Foran Towers.
Conclusion
The Authority’s Executive Director and Board of Commissioners prioritized the
Harrison Avenue Phase III renovations over the more urgent needs at Foran
Towers. The Executive Director misled HUD by asserting that the Authority had
a binding contract for Phase III and by indicating that the National Association for
the Advancement of Colored People would sue the Authority if funds were
10
reallocated from Harrison Avenue to Foran Towers. As a result of the current
conditions at Foran Towers, the project’s elderly tenants are exposed to unsafe
and unsanitary conditions.
Recommendations
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
1A. Prioritize the repair and/or replacement of the brick façade and sanitary
piping at Foran Towers, using available operating reserves and Capital
Funds. If the available Authority funding is exhausted, the Authority may
apply for emergency funding.
11
Finding 2: The Authority Failed To Manage Its Harrison
Avenue Renovation Project in an Effective and Efficient
Manner
The Authority did not adequately address important matters related to construction
activities at its Harrison Avenue development in an effective and efficient manner.
The Authority failed to:
• Provide timely written notification to a construction company hired for
Harrison Avenue renovations of its decision to deduct Phase III (costing
$838,000) from the contract,
• Ensure the timely completion for Phases I and II of Harrison Avenue
renovations, and
• Repair and reoccupy vacant units for Phase III at Harrison Avenue.
These problems occurred because the Executive Director did not make timely
decisions and the Board of Commissioners failed to monitor the Executive
Director’s actions. In addition, because there were significant delays in completing
the construction work at Harrison Avenue, individuals were deprived of housing.
Phase I and II Not Completed
in a Timely Manner
The Authority failed to ensure that Phases I and II for Harrison Avenue were
completed in a timely manner. According to the contract, allowing 324 days for
completion, Phases I and II should have been completed by January 15, 2003.
Change orders added 164 days, resulting in a revised completion date of May 19,
2003. However, Phases I and II were not completed until February of 2004.
We determined that the large number of change orders, a total of 16, and the
Executive Director’s failure to make decisions and approve change orders in a
timely fashion contributed to the delays. It took the Authority an average of 43
days to approve change orders once the construction company submitted its final
change order proposals even though the construction company had already
worked out the change orders with the Authority’s Modernization Coordinator
and Architect.
The Architect and the construction company stated that the Executive Director had
difficulty approving change orders. For example, the project’s laundry room was
redesigned three times, and the Executive Director was slow to decide on interior
12
doors and tub surrounds for bathroom renovations. Both the Architect and the
Authority’s Modernization Consultant stated that the construction company incurred
staffing problems due to the Authority’s failure to make timely decisions.
We used the Architect’s analysis, which showed a completion date of May 19,
2003, to project lost rental income of $55,390 for unoccupied units from May 19,
2003, through January 31, 2004. In addition to the lost rental income, there were
lost housing opportunities for individuals on the Authority’s waiting list, which
consisted of 175 applicants.
The Authority Failed To Ensure
Completion of Work
We found no evidence that the Authority aggressively monitored construction
progress, quantified delays, or took appropriate action to complete Phases I and II
on schedule even though the contract contained a liquidating damages clause for
contractor-caused delays. The construction company reported in the Construction
Minutes as early as August 16, 2002, that the work was behind schedule.
However, the Authority took no action.
We asked the Executive Director what measures he took to ensure that the
construction company completed Phase I and II renovations in a timely manner and
requested any letters, e-mails, or other evidence to show the actions taken. The
Executive Director has not responded to our request.
Vacant Units Not Rehabilitated
and Reoccupied
Once the Authority made the decision to deduct Phase III from the contract in
April 2002 (see finding 1), it should have immediately planned to rehabilitate and
reoccupy the vacant units. In a February 15, 2002, letter to HUD headquarters,
the Executive Director stated that the last 20 units (Phase III) of family housing
would not be available for reoccupancy due to noncompliance with uniform
physical condition standards—unless HUD approved the bond issuance. The
Executive Director further stated that there would be insufficient funds to bring
the units into compliance with uniform physical condition standards for a very
long time, if ever.
We determined that the Authority could have renovated most of the units at
minimal cost. The Authority could have used $20,330 in lost rental income to
fund these repairs. In addition to the lost rental income from the vacant units,
13
families are being deprived of needed housing. The Authority has approximately
175 families on its waiting list.
Currently, 13 of the 20 units in Phase III remain unoccupied. Inspections
performed by the Authority’s Work Maintenance Supervisor in October 2003
showed that 9 of the 13 unoccupied units in Phase III could be brought up to
uniform physical condition standards for the estimated cost of $19,200. The nine
units include 156B, 156C, 156D, 158A, 158C, 162A, 162B, 162C, and 164A.
The Office of Inspector General (OIG) and the local HUD Office of Public
Housing inspected the units in December 2003 and concurred that the units did
not require extensive rehabilitation and could be brought on line at minimal cost.
Vacant Units in Unsanitary
Condition
The remaining four unoccupied units in Phase III will require more extensive
work. However, the Authority should make every effort to bring these units on
line. Although the Authority may not be able to make immediate repairs to those
units, it should clean them. An example of the units’ current condition follows
(Unit 162D).
Conclusion
The Executive Director’s failure to make timely decisions and the Board of
Commissioners’ failure to monitor the Executive Director’s actions regarding
construction activities at Harrison Avenue led to a serious dispute with the
14
construction contractor. Also, the significant delays in completing the
construction work in Phases I and II and the Authority’s failure to occupy units
initially designated for rehabilitation in Phase III deprived individuals of housing.
Recommendation
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
2A. Rehabilitate and prepare vacant units in Phase III at Harrison Avenue for
occupancy.
15
Finding 3: The Authority’s Use of Development Funds Was
Unnecessary and Wasteful
The Authority used $135,824 of development funds on unnecessary and
premature replacement of equipment and other items at its scattered site
properties. The Authority also failed to maintain an inventory of the newly
purchased or replaced equipment that included new stoves, refrigerators and
furnaces. HUD requires a cost-benefit analysis whenever early replacement of
equipment is planned as cited in Public Housing Modernization Standards
Handbook 7485.2, REV-1, Section 1-4. Weak management controls allowed the
Authority to purchase and replace appliances, kitchen cabinets, furnaces, and roof
tiles prematurely. Weak management controls also resulted in the Authority’s
failure to maintain an inventory for the newly purchased and prematurely replaced
equipment. Without an inventory of new equipment, the Authority has no
accounting of what it owns and cannot readily plan its future maintenance needs
or determine the disposal of the replaced equipment. The Authority’s failure to
manage the scattered site program in an economical and efficient manner has
resulted in fewer development funds being available for other public housing
needs. In addition, the Authority did not resell any of the equipment they
replaced that was saleable and reusable.
The Authority also did not provide a handicapped-assessable unit required under
Section 504 of the Rehabilitation Act, and by the Settlement Agreement between
the Authority, the U.S. Department of Justice and the National Association for the
Advancement of Colored People. The Authority’s Executive Director said that he
was unaware of requirements specified in the Settlement Agreement for the
scattered sites. As a result, handicapped individuals were denied access to a
handicap accessible unit.
Eight Properties Acquired
The Authority acquired eight properties containing 18 units. As of January 2004,
16 units had been rehabilitated and reoccupied.
Milford Housing Authority
Replaced All Appliances and
Made Unnecessary Renovations
The Authority replaced kitchen appliances, refrigerators, ranges, kitchen cabinets,
and countertops regardless of their physical condition (see appendix C). In
16
addition, the Authority replaced furnaces at five properties and roof tiles at one
property without consideration of the physical condition of the items. Our review
of the Appraiser’s reports and the Architect’s existing condition reviews,
performed for each of the properties, showed that it was not necessary to replace
these items.
The Architect and the Authority’s Consultant stated that the Authority decided to
replace all ranges with electric stoves and to replace all refrigerators regardless of
their condition. The Architect stated that the Authority’s Executive Director
preferred gas heat furnaces to oil. Therefore, if the scattered site unit’s furnace
used oil, it was converted to gas regardless of the condition of the furnace. We
determined that for at least three properties, the furnaces were only 2 years old
and were in good physical condition, yet they were replaced.
The Authority was unable to provide the cost benefit analysis as required by
HUD’s Public Housing Modernization Standards Handbook 7485.2, REV-1,
Section 1-4, concerning premature replacement. Accordingly, we questioned the
cost (see appendix C) of premature replacement as unnecessary and wasteful.
The Authority’s management decisions have resulted in less funding being
available for other housing needs.
Lack of Inventory for Scrapped
Appliances and Furnaces
The Authority did not maintain an inventory of scattered site equipment, such as
stoves and refrigerators that were either discarded or purchased. The construction
company estimated that approximately 50 percent of the refrigerators and stoves
and 25 percent of the cabinets that were discarded were in good condition.
Furthermore, the contractor stated that his construction company was not required
to maintain an inventory of scrapped or replacement items. The Authority
claimed to have relied upon the Architect, the Consultant, and Clerk of Works to
make disposal determinations on the replaced items. However, the Authority’s
senior management could not provide documentation to support the delegation of
authority.
The Authority is not performing one of its critical functions, which is to safeguard
its assets. As a result, it received no money on record when it disposed of its
excess equipment that was saleable and/or reusable. In addition, without an
inventory of new equipment, the Authority has no accounting of what it owns, nor
can it plan for future maintenance.
17
The Authority Failed To Modify
Units for Handicapped
Accessibility
The Authority did not comply with 24 Code of Federal Regulations, part 8.23b,
which requires that a minimum of 5 percent of the units be handicapped
accessible. Based on this requirement, at least one of the scattered site units
should have been made handicapped accessible. According to the Architect’s
update in May 2001 and our inspection of the property, no modifications were
made to make these units handicapped accessible.
The Authority’s Executive Director claimed to be unaware of the Section 504-
handicapped accessibility requirements. The Authority’s plan for the
development of scattered site units stated that the Authority intended to satisfy the
Section 504 requirement that 5 percent of all newly developed, acquired, or
rehabilitated units be accessible or adaptable to accommodate mobility impaired
individuals. Furthermore, the Settlement Agreement stated that the Authority’s
subsidized housing units would comply with the Fair Housing Act, Section 504 of
the Rehabilitation Act, and HUD’s accessibility guidelines set forth in 24 Code of
Federal Regulations, parts 40 and 100.205. We determined that the Authority did
not comply with these requirements. As a result, handicapped individuals were
denied access to a handicap accessible unit.
Conclusion
The Authority’s use of development funds for scattered site properties was
unnecessary and wasteful. Management did not properly monitor the purchase
and replacement of items acquired for the scattered sites and failed to maintain an
inventory for prematurely replaced or newly purchased scattered site equipment.
The Authority’s failure to manage the Scattered Site program in an economical
and efficient manner resulted in fewer development funds being available for its
public housing needs. In addition, handicapped individuals were denied access to
the scattered site units because the Authority did not provide a handicapped-
assessable unit as required by the Settlement Agreement.
18
Recommendations
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
3A. Reimburse $135,824 to its Scattered Site Development program from
nonfederal funds for the premature replacement of kitchen appliances,
kitchen cabinets and countertops, furnaces, and roofs.
3B. Update and maintain an inventory of scattered site equipment including the
date of purchase, cost, serial number and useful life.
3C. Comply with the handicapped-accessible Section 504 regulations required
by the Settlement Agreement.
19
Finding 4: The Authority Failed To Comply with Federal
Requirements and Its Own Contracts for Legal Services
The Authority did not comply with Federal requirements and its own contracts for
legal services and incurred questionable costs of $219,717 ($215,982 in ineligible
costs and $3,735 in unsupported costs) as follows:
• Litigation services were procured without the required HUD Regional Counsel
concurrence;
• Payments for legal services were improperly made to defend against a lawsuit
that the Authority erroneously thought HUD might bring against it;
• Separate payments were made to the Authority’s General Legal Counsel for
services already included and paid for in his annual retainer contracts;
• Payments for legal services were not supported by sufficient documentation to
justify the reasonableness of the costs; and
• The Authority failed to follow proper procedures in procuring legal counsel (see
Finding 7).
These violations of HUD requirements and Federal cost principles occurred because
the Executive Director, the Board of Commissioners, and the General Legal Counsel
disregarded Federal regulations and contractual requirements. In addition, the Board
of Commissioners failed to exercise its leadership and oversight of the Executive
Director’s actions and establish adequate management controls over legal
expenditures. As a result, the Authority had fewer funds available for safe, decent,
and affordable housing. A summary of legal costs paid and questioned follows:
Type of Legal
Expense Amount Paid Ineligible Unsupported Total
General Counsel $168,673 $100,266 $100,266
Special Counsel 119,451 115,716 $3,735 119,451
Total $288,124 $215,982 $3,735 $219,717
Ineligible Costs of $100,266
Paid to General Counsel
For the period October 1, 2000, through December 11, 2003, the Authority
incurred $168,673 in costs for the General Legal Counsel. We questioned
$100,266 of these costs as ineligible because the services performed were already
included and paid for in the General Legal Counsel’s annual retainer contract.
20
General Legal Counsel
Contract Provisions
The Authority’s contract for the General Legal Counsel recognized HUD
regulations and contained provisions governing the conditions and process for the
General Legal Counsel to follow to request and obtain payment for extraordinary
services and services beyond the scope of those included in the $7,500 per year
retainer contract.
The General Legal Counsel’s retainer contract stated in part that the General
Legal Counsel was to represent the Authority in matters in connection with the
business of the Authority and the conduct of its affairs and the management of its
properties and construction projects. The scope of services to be provided are
outlined under item 2 of the General Legal Counsel’s contract.
The General Legal Counsel’s contract further provides: “said attorney shall,
whenever he is of the opinion that any certain matter of litigation exceeds the
scope of the legal services contemplated by section 2.j or is extraordinary and
beyond the scope of Paragraph 2. of this Agreement, he is to prepare a proposal
for additional fees and submit the proposal and supporting documentation to the
Authority.” The contract further states that the Authority will immediately submit
the request to the HUD Regional Office for approval before execution and
payment of any fees. In the event that there is a question of whether litigation or
other matters are considered extraordinary or extra services, the contract provides
that HUD’s Regional Counsel will make a final determination on the matter.
Based on our review of General Legal Counsel invoices, we identified $100,266
of ineligible charges. We determined that the retainer already covered the
services provided. For example, the Authority made numerous payments for
union and personnel related matters, which are covered in the retainer under
“specific services,” described there as “advice and assistance provided to
members and employees of the Authority with respect to Authority business” and
“rendering legal advice with regard to union grievances on behalf of employees of
the Authority.” Another example of charges that related to advising and assisting
the Authority regarding Authority business, also covered in the retainer, pertains
to various meetings and telephone conferences regarding project renovations.
We found no evidence that the General Legal Counsel prepared and submitted
proposals for extraordinary services except for the implementation of the
Scattered Sites Settlement Agreement. We took no exception to those costs as
shown in the schedule below.
21
We calculated our questioned costs by deducting charges pertaining to the
General Legal Counsel’s separate contract for implementation of the Settlement
Agreement, annual retainers, and amounts charged to State accounts from the
General Legal Counsel’s total charges.
The following table summarizes the calculation for determining the ineligible
costs.
Schedule of Ineligible Legal Costs
Total charges $168,673
Less Settlement Agreement (34,749)
Less retainer (28,767)
Less State charges (4,891)
Ineligible costs $100,266
As a result of paying these ineligible costs, the Authority had fewer funds
available to provide safe, decent, affordable housing.
Ineligible Costs of $115,716 and
Unsupported Costs of $3,735
The Authority hired Special Legal Counsel when litigation matters arose for
which its General Legal Counsel did not have the expertise. The Authority
incurred a total of $119,451 for services incurred by the Special Legal Counsel
from October 22, 2002, through December 31, 2003. Of the $119,451, $115,716
was for ineligible costs, and the remaining $3,735 was for unsupported costs. The
following table lists the use of the funds and whether the use was for ineligible or
unsupported costs.
Schedule of Questioned Special Legal Counsel Costs
Use of Funds Ineligible Unsupported Total
Foran Towers $25,287 $25,287
Employee lawsuit 86,688 86,688
Contract dispute 3,741 3,741
Labor relations 3,735 3,735
Grand Totals $115,716 $3,735 $119,451
22
Public Housing Authority Shall
Not Defend Against Litigation
Without Written HUD
Concurrence
HUD’s Litigation Handbook, 1530.1, REV-4, requires that a public housing
authority not initiate or defend litigation, other than routine eviction actions,
without obtaining the prior written concurrence of HUD’s Regional Counsel. In
addition, the public housing authority must receive the Regional Counsel’s
concurrence before expending program funds for the Authority’s defense.
The Handbook also requires that the Regional Counsel not approve the
expenditure of program funds for a public housing authority’s defense if he or she
finds that the Authority has clearly violated HUD requirements or is otherwise at
fault. HUD policy and Federal cost principles as established by the Office of
Management and Budget do not permit a public housing authority to use project
or program funds to pay the costs of litigation against HUD.
Milford Housing Authority
Must Send Copy of Litigation
Complaint to HUD Regional
Counsel
HUD requires that a public housing authority engaged in litigation promptly send
a copy of the complaint to the Regional Counsel. An authority that is threatened
with litigation must also promptly notify HUD’s Regional Counsel of the name,
title, and address of the complainant; the nature of the complaint; and a factual
statement of the authority’s involvement in the subject of the complaint.
Threatened litigation includes any communication, oral or written, announcing an
intention to institute litigation against an authority or other HUD-assisted
recipient.
Office of Management and Budget Circular A-87 states that a cost is reasonable
if, in its nature and amount, it does not exceed that which would be incurred by a
prudent person under the circumstances prevailing at the time the decision was
made to incur the cost. It further provides that a cost is reasonable if it is
recognized as ordinary and necessary for the performance of a Federal award and
if the entity acted with prudence, considering its responsibilities to its employees,
the taxpayers, and the Federal Government.
The OIG Program Integrity Bulletin dictates that Commissioners are responsible
for the actions and decisions made by the Executive Director to ensure that the
23
public housing authority is properly managed and is acting legally and with
integrity.
Health and Safety Deficiencies
Reported at Foran Towers
The Authority paid its Special Legal Counsel $25,287 to serve as counsel to
protect the Authority and its Commissioners and staff against a possible lawsuit
from the New Haven, CT, Legal Assistance Branch of the National Association
for the Advancement of Colored People and against HUD, related to a
controversy involving the proposal to reallocate funds from Harrison Avenue to
Foran Towers. The Special Legal Counsel made the statement that HUD
preferred that the Authority address health and safety deficiencies at Foran
Towers before completing renovations at Harrison Avenue. The Executive
Director expressed concern that the New Haven, CT, Legal Assistance Branch of
the National Association for the Advancement of Colored People would likely sue
the Authority if funds were reallocated from Harrison Avenue to Foran Towers.
In a March 11, 2003, letter, addressed to the Authority’s Board of Commissioners,
the Special Legal Counsel stated, in part, that it was retained by the Authority to
provide advice and counsel with respect to the Harrison Avenue and Foran
Towers properties.
Use of Federal Funds for
Litigation Against HUD Not an
Allowable Cost
We determined that there was no immediate threat of a lawsuit from the National
Association for the Advancement of Colored People. The Authority’s belief that
the Association might initiate litigation if the Authority did not complete the
Harrison Avenue development on schedule was based solely on a newspaper
article in which an attorney from New Haven Legal Assistance indicated concern
about the completion of the project. However, the belief about possible litigation
was misguided and contrary to the facts known at the time. On March 10, 2003,
the Litigation Director at New Haven Legal Assistance informed the Executive
Director that she did not represent the Greater New Haven Branch of the National
Association for the Advancement of Colored People regarding the current dispute
over Foran Towers and Harrison Avenue and did not have any authority to sue on
behalf of the Association or anyone else. Consequently, there was no reasonable
basis on which to use Federal funds to hire outside litigation counsel to defend the
Authority against a threatened lawsuit.
As previously stated, using Federal funds for the costs of litigation against HUD
are not an allowable legal cost. The Special Legal Counsel’s statement that HUD
24
claimed the Authority was diverting money from Foran Towers toward the
Harrison Avenue rehabilitation was not accurate. While HUD’s Regional
Director made known his concerns that the Authority was not properly protecting
the safety of the elderly tenants at Foran Towers, HUD never threatened to sue the
Authority and never alleged that the Authority had improperly diverted funds
from Foran Towers.
Milford Housing Authority
Defended Against Litigation
Without HUD Concurrence
The Executive Director incurred an additional $86,688 for the Special Legal
Counsel to defend the Authority in a Federal “whistle blower” lawsuit involving a
former employee of the Authority without obtaining prior written concurrence
from HUD’s Regional Counsel. We considered these costs to be ineligible. The
Executive Director failed to inform the Regional Counsel regarding the litigation
between the Authority and the former employee and did not promptly send
pertinent documents, such as the complaint in the case, along with the anticipated
defenses and pleadings filed to the Regional Counsel. The Authority did not
submit the required information until being instructed to do so by the Regional
Counsel on April 3, 2003. This was approximately 5 months after the Authority
began receiving services pertaining to this lawsuit.
OIG asked the General Legal Counsel why the Authority expended funds for
litigation without concurrence of the Regional Counsel. The General Legal Counsel
responded that he did not hire the Special Legal Counsel but, rather, advised the
Authority that he could not provide the required expertise since he did not have
litigation experience.
In a letter dated, March 19, 2003, the Regional Counsel requested that the
Authority submit a copy of the legal service contract between the Authority and
its Special Legal Counsel, along with a description of the scope of services for
which the firm was hired, a detailed account of the procurement methods used in
selecting the Special Legal Counsel, and any Board of Commissioners resolutions
regarding such procurement. The Regional Counsel also requested an accounting
of how much the Authority had paid the Special Legal Counsel, what funds were
being used, and copies of any bills from the firm. The Authority failed to comply
with the Regional Counsel’s request that this documentation be provided within a
specified timeframe. Pursuant to part A, section 15B, of the Annual
Contributions Contract between the Authority and HUD, the Authority is required
to provide HUD with any program-related information and at such times as HUD
requires. After repeated requests by the Regional Counsel, the Authority
provided information that was not sufficient.
25
On November 13, 2003, the Board of Commissioners authorized the Executive
Director to negotiate and enter into a retainer agreement to engage the services of
the Special Legal Counsel to provide construction litigation services for the
Harrison Avenue Project. There is no evidence that the Authority received the
Regional Counsel’s concurrence before the use of $3,741 in program funds.
Therefore, we determined that the $3,741 incurred was ineligible.
Law Firm Hired To Clarify
Bargaining Agreement
We classified $3,735 as unsupported for Special Legal Counsel to represent the
Authority in matters related to union negotiations with its staff. The Special
Legal Counsel was hired specifically to assist the Authority in clarifying the
bargaining unit makeup, including three employee members.
The Authority’s contracted Human Resources Consultant indicated that he would
have the capability of performing a portion of the services related to union
negotiations provided by the Special Legal Counsel. The Consultant stated that
he routinely competes against attorneys for these types of services he provides to
other housing authorities. Since the Human Resources Consultant was already on
retainer, there may have been a duplication of services. Therefore, we classified
the $3,735 in legal services as unsupported, pending receipt of further
documentation.
Board of Commissioners Failed
To Monitor Executive Director
There is no evidence that the Authority’s Board of Commissioners questioned any
of these legal services. The Board of Commissioners is responsible for the review
and approval of the Authority’s payments. A disbursement report with a listing of
all checks is submitted to the Board of Commissioners monthly for approval.
Certain Members of the Board of Commissioners said that they were not aware of
the requirement that HUD’s Regional Counsel’s concurrence was required before
a public housing authority expended program funds for its legal defense. The
record demonstrates that the Board of Commissioners routinely approved legal
bills, which were submitted by the Executive Director on behalf of the General
Legal Counsel and Special Legal Counsel, without any question or concern about
the necessity of the services provided or the reasonableness of the costs for those
services.
As a result of incurring questionable legal costs, the Authority has fewer funds
available for safe, decent, and affordable housing.
26
Conclusion
The Authority’s Executive Director and General Counsel disregarded Federal
regulations and contractual requirements pertaining to legal expenditures. In
addition, the Board of Commissioners failed to exercise its leadership and oversight
of the Executive Director’s actions and establish adequate management controls
over legal expenditures. This resulted in questioned costs of $219,717 with fewer
funds available to provide safe, decent, and affordable housing for individuals.
Recommendations
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
4A. Reimburse $115,716 to its public housing program from nonfederal funds for
the ineligible payments made to its Special Legal Counsel.
4B. Reimburse $100,266 to its public housing program from nonfederal funds for
the ineligible payments made to its General Legal Counsel.
4C. Provide documentation to support the $3,735 of unsupported legal costs. If
documentation cannot be provided, the Authority should reimburse its public
housing program the appropriate amount from nonfederal funds.
4D. Implement procedures and controls to ensure that its procurement of legal
expenditures is performed in accordance with Federal requirements.
27
Finding 5: The Authority Lacked Adequate Management
Controls and Procedures Over Section 8 Inspections
The Milford Housing Authority did not have adequate procedures and controls in
place for Section 8 Inspections. The Authority failed to ensure that:
• Housing quality standards deficiencies were corrected in a timely manner;
• Quality control procedures were implemented to verify the reliability of
inspection reports;
• Section 8 inspection reports, including failure notification letters, were
maintained in Milford Housing Authority files; and
• All units were inspected to verify that they were decent, safe, and sanitary.
These conditions occurred because the Executive Director failed to monitor the
Section 8 Inspector hired to perform Section 8 inspections, and did not ensure that
the Section 8 program was adequately staffed and properly supervised. Also, the
Authority’s failure to establish proper abatement procedures and require prompt
corrective actions for cited violations provided landlords with little incentive to
correct deficiencies. As a result, Federal funds were used for housing that was not
decent, safe, and sanitary. A total of $280,628 (see appendix D) in Federal
subsidies was expended for 63 substandard housing units. Therefore, we
questioned $26,280 (see appendix E) in administrative fees the Authority billed
HUD to manage these substandard units.
Goal of Section 8 Program To
Provide Safe and Sanitary
Housing
The goal of the Section 8 program is to provide decent, safe, and sanitary housing
at affordable cost to lower income families. HUD regulations set basic housing
quality standards that all units must meet. The primary objective of these
standards is to protect tenants receiving assistance under the program by
guaranteeing a basic level of acceptable housing.
28
HUD Required Prompt and
Vigorous Action To Correct
Housing Quality Standards
Public housing authorities must inspect each unit before occupancy, at least
annually, and at other times as needed to ensure the minimum standards are met.
Quality control inspections must be conducted to ensure that the inspection
program provides an accurate assessment of housing conditions. HUD requires
that public housing authorities implement a system to promptly identify units for
which deficiencies have not been corrected within required timeframes. Exigent
or life-threatening violations must be corrected within 24 hours, and other defects
must be corrected within 30 calendar days. Potential sanctions to force corrective
action include abatement of rent and/or termination of assistance to the family.
To ensure proper program management, HUD may reduce or offset any
administrative fee to the public housing authority if it fails to adequately perform
its administrative responsibilities.
Milford Housing Authority
Outsourced Inspection Services
On March 14, 2001, the Authority entered into an agreement with a private
Section 8 Inspector to perform its Section 8 inspections. The Section 8 Inspector
agreed to (1) perform annual inspections, (2) document inspection results on the
Inspector’s web site, (3) inform tenants and landlords of any housing quality
standards violations, (4) perform follow-up inspections as needed, and (5) provide
the Authority completed inspection reports and abatement lists for units that failed
to meet the housing quality standards.
Serious Deficiencies Not
Corrected in a Timely Manner
for 70 Section 8 Units
We reviewed a total of 159 failed inspections identified on the private Inspector’s
web site, covering a 27-month period from October 2001 through December
2003. We observed that 114 of the 159 inspections clearly showed that dwelling
units failed to meet the housing quality standards. Our review showed that 70 of
the 114 had serious and life-threatening deficiencies that were not corrected in a
timely manner. Of the 70 failures,
29
• 32 failed due to missing, inoperable, or improperly installed smoke
detectors, and
• 38 failed for serious deficiencies including infestation, serious structural
damage, electrical hazards, and furnace flues in disrepair - a carbon
monoxide hazard.
It took an average of 146 days before the Section 8 Inspector confirmed that
serious and life-threatening violations were corrected. The Authority’s average of
146 days for corrective action is contrary to HUD’s requirements that exigent or
life-threatening deficiencies be corrected within 24 hours and other housing
quality standards deficiencies be corrected within 30 days. A total of 15 units out
of the 114 with outstanding housing quality standards deficiencies that were not
repaired within the required time remained uncorrected as of December 31, 2003.
Serious Water Leak Left
Uncorrected Led to Collapse of
Roof
The Authority’s failure to take aggressive action to correct deficiencies had severe
consequences. For example, the failure to correct a water leak in one unit eventually
resulted in the roof collapsing on the property 1 year later. The unit failed inspection
for the water leak on September 19, 2001. Inspection reports from April 15 and
May 31 of 2002 showed that the water leakage had become more severe with
evidence of sheetrock falling from the ceiling. On September 5, 2002, the Section 8
Inspector reported a large hole in the ceiling caused by rain coming through the roof
of the building. However, the Authority did not abate the subsidy payment until
October 1, 2002, approximately 13 months after the deficiency was first observed.
On October 12, 2002, the roof of the property collapsed while three of the four units
were occupied. The City of Milford’s Building Inspector attributed the collapse to
extensive water damage.
Milford Housing Authority
Failed To Adequately Monitor
Inspections
We determined that these deficiencies went uncorrected because the Authority did
not properly monitor the Section 8 Inspector to ensure that he performed the
duties required by his contract. The Authority did not receive inspection reports
and abatement lists on a consistent basis.
30
Inspection Reports Not
Maintained
The Independent Public Accountant reported in its annual audited financial
statements for fiscal years 2001 to 2003 that the Authority’s Section 8 inspection
files were not properly maintained because many inspection reports were missing
from the files. Our review of the Authority’s files showed that the Authority
retained inspection reports for only 123 of the 159 failed inspections we reviewed.
The Authority’s visibility of inspection reports was further limited because the
Section 8 Inspector also did not update his web site and post completed inspections
on a consistent basis.
Section 8 Inspector Failed Units
for Minor Deficiencies
The Authority’s employees informed the Executive Director that the Section 8
Inspector was failing units for minor or non-housing quality standards deficiencies.
As a result, the Authority’s Section 8 Coordinator was reluctant to take action on
reported failures. Our review confirmed the Coordinator’s concerns and showed
that 45 of the 123 inspections on file cited questionable housing quality standards
deficiencies. For example, the Section 8 Inspector failed one unit based solely on
the fact that there were unregistered vehicles in the building’s parking lot and the
front lobby was missing tiles. Also, the Section 8 Inspector failed two units because
the shower required recaulking.
Quality Controls Were Not
Implemented for Inspections
The Authority failed to perform quality assurance Inspections, as required by HUD,
pertaining to the 123 inspection reports on file. The Section 8 Coordinator stated
that she received little assistance and direction from the Executive Director,
particularly regarding her responsibilities for conducting quality assurance
inspections. During our review of Section 8 files, we observed that some quality
assurance inspections were contained in the files. However, there was no evidence
that the Authority maintained a record of the quality assurance inspections
performed or used the results to ensure that inspections were conducted in
accordance with HUD’s requirements.
31
Abatement Procedures Not
Implemented for Uncorrected
Deficiencies
The Authority did not implement rent abatement procedures for landlords that
failed to correct deficiencies within timeframes established by HUD. This
occurred primarily because the Authority did not have an effective tracking
system to monitor deficiencies. The current Section 8 Coordinator stated that she
relied on the Section 8 Inspector to track deficiencies and ensure they were
corrected. The current Section 8 Coordinator and the former Section 8 Manager
also stated that the Section 8 Inspector failed to provide abatement reports on a
consistent basis. The Section 8 Inspector confirmed that the reports were not
always provided and did not send reports for a few months starting in July of
2003.
The Section 8 Coordinator said that she did not rely on the failure notifications to
enforce housing quality standards because she had little confidence in the Section 8
Inspector’s performance. Also, because she questioned the quality of the
inspections, she was reluctant to abate payments even when the Section 8 Inspector
provided abatement reports. The Authority abated only two payments during the
period of June 2002 through December of 2003.
$280,628 in Housing Assistance
Payments Required Abatement
We identified 391 subsidy payments for 63 housing units that required abatement.
Payments totaling $282,545 should have been abated because inspection reports
clearly showed that the units failed to meet the housing quality standards, and
deficiencies were not corrected within the required time. However, the Authority
abated only two payments totaling $1,917, resulting in $280,628 ($282,545 minus
$1,917) being disbursed for substandard housing. Because the Authority failed to
properly administer its program, we questioned the $26,280 in Section 8
administrative fees received but not earned to manage housing units that failed to
meet HUD’s housing quality standards.
32
The Authority Failed To
Annually Inspect All Units
The Authority has failed to ensure that 20 of its subsidized units were inspected
within the past year. The Section 8 Inspector failed to perform 18 inspections that
the Authority requested, and the Authority failed to request the additional two
inspections. The Authority was not aware of the error because it did not have a
system in place to ensure that all required inspections were conducted. Therefore, it
could not verify that these 20 units were in decent, safe, and sanitary condition.
Executive Director Failed To
Take Appropriate Action on
Section 8 Deficiencies
We determined the Executive Director did little to monitor known Section 8
inspection deficiencies and did not take appropriate action as the Contracting
Officer to ensure compliance of the Authority’s contracted Section 8 Inspector.
The Executive Director was responsible for monitoring, detecting, and correcting
Section 8 program deficiencies. As a result of the Executive Director’s failure to
fulfill his assigned duties, tenants were living in unsafe and unsanitary conditions.
Conclusion
The Executive Director failed to monitor the Section 8 Inspector hired to perform
Section 8 inspections, and did not ensure that the Section 8 program was
adequately staffed and properly supervised. As a result, tenants did not receive
decent, safe, and sanitary housing, and $280,628 in Federal subsidies was
expended for 63 substandard housing units.
33
Recommendations
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
5A. Reimburse $26,280 to HUD from nonfederal funds for the Section 8
administrative fees collected by the Authority.
5B. Establish an effective system to ensure all outstanding housing quality
standards deficiencies are monitored and corrected within the required time.
This will result in future housing assistance payments being put to better use
than the $280,628 paid for substandard housing.
5C. Implement quality control procedures to ensure inspections are accurate and
reliable and are performed in a timely manner.
5D. Abate subsidies for landlords that fail to correct housing quality standards
deficiencies within the required time.
5E. Properly supervise and adequately staff its Section 8 program.
34
Finding 6: The Authority Failed to Lease Section 8 Units at
an Acceptable Rate
The Authority’s utilization rate for Section 8 Vouchers is currently at 75 percent,
which is significantly below the 95 percent level required by HUD. The lease
rates for fiscal years 2001, 2002, 2003, and a portion of 2004 are listed in the
following table:
Vouchers Vouchers Lease Rate
Period Available Leased Unused Vouchers
Fiscal year 2001 266 187 70% 79
Fiscal year 2002 266 187 70% 79
Fiscal year 2003 266 180 68% 86
4/1/03 – 12/31/03 266 199 75% 67
The Authority did not make sufficient efforts to issue more vouchers. In addition,
we determined that the Authority was not using the correct rents for Section 8
units. The Authority’s Family Section 8 Program Assistant did not acknowledge
the most recent increases in fair market rents. Offering lower rents to prospective
landlords and low voucher utilization rates resulted in reduced opportunities for
families to obtain housing. In addition, the Authority lost $114,090 in potential
administrative fees by not leasing 100 percent of its allocated vouchers. Most
importantly, needy families are being deprived of housing.
HUD Requirements
In accordance with HUD Handbook 7420.3m, REV-2, section 5-16(a), authorities
are required to use 95 percent of their available units. The Authority must work with
HUD to identify and correct needed adjustments in administration, such as landlord
outreach methods or use of staff.
HUD Oversight
On April 23, 2002, the local HUD Office of Public Housing conducted an onsite
review of the Authority’s Section 8 Management Assessment Program. Based on
the review, HUD requested that the Authority submit a corrective action plan to
35
address its low utilization rate. The Authority did not provide the corrective
action plan.
Insufficient Number of
Applicants Shopping for Units
During the past 9 months, the Authority has had an average lease rate of two units
per month with nine applicants shopping for a unit over that period. The
Authority should strive to increase its number of applicants shopping for units.
Section 8 Program Not
Sufficiently Staffed
The Authority’s Fee Accountant stated that the Authority could benefit by
increasing its Section 8 staff. The Section 8 Program Assistant stated that she did
not have the time to work toward improving the utilization rate with her current
workload. In addition to her duties as Program Assistant, she took over the duties
of the Section 8/Family Housing Manager when that person retired on June 28,
2002. Currently, only a part-time person assists the Section 8 Program Assistant.
The Section 8 Program Assistant stated that she asked the Executive Director for
assistance in reducing her workload. The Executive Director has not complied with
her request.
The Authority Did Not Use
Correct Payment Standards for
Section 8
The Authority did not use the correct payment standards for Section 8. The
Authority’s fair market rents increased on October 1, 2003. However, the
Authority continued to base its exception payment standards on the fair market
rents from the September 30, 2002, Federal Register for new tenants in January
and March 2004. The Authority’s Family Section 8 Program Assistant did not
acknowledge the most recent increases in fair market rents. Offering the lower
payment standards to potential landlords reduced the Authority’s opportunity to
increase its utilization rate.
36
The Authority Lost $114,090 in
Potential Administrative Fees
and Is Understaffed
During the 21-month period of April 2002 through December 2003, the Authority
lost $114,090 in potential administrative fees. Total administrative fees earned by
the Authority over the same period was $264,808. Since the Authority earned
substantial administrative fees over this period and has the potential to earn
significantly more, the Authority should study the effect of having more staff in
the Section 8 program, based on the Section 8 program’s current workload and
poor performance.
Chairman of Board of
Commissioners Questioned High
Number of Unused Vouchers
The Chairman of the Authority’s Board of Commissioners expressed concern
regarding the Authority’s low utilization rate and indicated that the Authority
would strive for improvements in this area. Questions regarding the Authority’s
low Section 8 utilization rate were frequently raised at Board of Commissioners
meetings. For example, at a Board of Commissioners meeting conducted on
January 15, 2002, the Board of Commissioners asked questions regarding the high
number of unused Section 8 Vouchers. An adequate response was not provided.
The Executive Director only indicated that issues regarding the Housing Choice
Voucher program would be addressed in the future.
Outreach Efforts to Landlords
Needed
The Authority can improve its Section 8 utilization by including more landlords in
the Section 8 program. One way of accomplishing this is to periodically conduct
landlord workshops to educate new landlords on the benefits of the Section 8
program. According to the Section 8 Program Assistant, the last time the Authority
conducted a landlord workshop was in May 2002. The Section 8 Program Assistant
stated that when there were two full-time employees, including herself and the
former Section 8/Family Housing Manager, the Authority conducted landlord
workshops monthly. The Section 8 Program Assistant could not continue to conduct
these monthly workshops because she did not have sufficient time.
37
As a result of the Authority’s underuse of Section 8 Vouchers, low-income families
are being deprived of affordable housing. In addition, the Authority is losing
opportunities to earn significant administrative fees.
Conclusion
The Authority did not make sufficient effort to lease Section 8 units at an
acceptable rate. In addition, we determined that the Authority was not using the
correct rents for Section 8. Offering lower rents to prospective landlords and low
voucher utilization rates resulted in reduced opportunities for families to obtain
housing. The Authority lost $114,090 in potential administrative fees by not
leasing 100 percent of its allocated vouchers. Most importantly, needy families
are being deprived of housing.
Recommendations
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
6A. Submits a monitoring plan to ensure they use all available funding.
6B. Is using the correct payment standards for Section 8.
38
Finding 7: The Authority Failed To Comply with HUD
Procurement Regulations and Its Own Procurement Policy
The Authority’s procurement practices did not comply with HUD regulations and
its own procurement policy. The Authority failed to:
• Award contracts competitively,
• Justify emergency procurements,
• Execute or update service contracts and/or written agreements,
• Compete contracts fairly,
• Adequately evaluate competitive proposals, and
• Perform cost/price analysis.
As Contracting Officer, the Executive Director did not fulfill his responsibility to
establish and implement effective management controls over the procurement
process. HUD has no assurances that the Authority’s procurement process is fair
and equitable and results in the best quality and/or priced services obtained. In
addition, without formal contract documents, the Authority was at risk for
overbilling and paying for unauthorized services.
Procurement To Provide Full
and Open Competition
The Authority’s Annual Contributions Contract requires it to comply with all
applicable regulations issued by HUD. The Federal procurement regulations are
contained in the Code of Federal Regulations. These regulations require the
Authority to:
• Conduct all procurements in a manner that provides full and open
competition and
• Maintain a contract administration system, which ensures that contractors
perform in accordance with the terms, conditions, and specifications of
their contracts or purchase orders. These records should also include the
rationale and justification for the method of procurement, the type of
contract, the selection of the contractor, and the basis for the contract
price.
The Authority’s procurement policy states that the Authority will comply with
HUD’s Annual Contributions Contract; HUD Handbook 7460.8, Procurement
Handbook for Public Housing Agencies; and the procurement standards of 24
Code of Federal Regulations, part 85.36. The term “procurement” includes both
contracts and modifications - including change orders - for construction or
39
services, as well as purchase, lease, or rental of supplies and equipment. All
contracts and modifications should be in writing, clearly specifying the desired
supplies, services, or construction and supported by documentation regarding the
method of selection, the procurement chosen, the rationale for selecting or
rejecting offers, and the basis for the contract price.
The Authority’s procurement policy provides that a cost or price analysis shall be
performed when only one offer is received or for other procurements as deemed
necessary by the Authority.
The Authority’s procurement policy also requires that for small purchases, no less
than three offerors shall be solicited to submit price quotations, which may be
obtained orally, by telephone, or in writing. The quotations shall be recorded and
maintained as a public record. Award shall be made to the offeror providing the
lowest acceptable quotation.
HUD Handbook 7460.8, REV-1, paragraph 4-23A, provides that when procuring
services by competitive proposals, a written plan for evaluating technical and cost
proposals and an evaluation review process shall be established before the request
for proposal is issued. This plan shall include a rating sheet for each offeror,
which lists each of the evaluation criteria and the weight assigned. The rating
sheets should require the technical evaluator to assign both numerical ratings and
narrative justifications to support the ratings given.
20 Violations Found for Eight
Procurements
We reviewed 14 procurements. The cost of procurements totaled $4,249,579.
For 8 of the 14 procurements, we identified a total of 20 violations of HUD
regulations and/or the Authority’s procurement policy. The following table lists
the contract reviewed, cost of the contract, and whether any deficiencies existed in
the procurement.
40
# Contract Cost Deficiencies
1 Harrison Avenue A&E Contract $150,000 None
2 Harrison Avenue Construction Contract 2,340,000 None
3 Scattered Sites A&E Contract 51,640 None
Scattered Sites Construction
None
4 Contract Phases I and II 903,900
5 Clerk of Works 42,897 2,3,4,5
6 Human Resources Consultant 60,553 1,3
7 Scattered Site Implementation
Development Program Manager 136,000 3,4,5
8 Modernization Program Manager 262,500 4,5
9 Section 8 Annual Unit Inspections 17,700 None
10 Special Legal Counsel – Employee Lawsuit 86,688 1,3,6
11 Special Legal Counsel – Capital Project Funding Issues 25,287 2,6
12 Special Legal Counsel – Contract Dispute 3,741 3
13 General Legal Counsel 133,849 1,3,6
General Legal Counsel – Fair Housing
14 Settlement Agreement 34,824 None
Total $ 4,249,579 20 deficiencies
Legend
1 Awarded contracts without evidence of competition.
2 Lacked justification for emergency procurements.
3 Did not formally execute contracts or update contracts.
4 Did not fairly compete contracts.
5 Failed to adequately evaluate competitive proposals.
6 Did not perform cost/price analyses.
Clerk of Works
The Authority could not justify soliciting for the Clerk of Works services based
on a noncompetitive emergency procurement. We do not agree that this qualified
as an emergency procurement. The Authority’s procurement policy states that
noncompetitive awards may be used only when an emergency exists that seriously
threatens the public health, welfare, or safety or endangers property or would
otherwise cause serious injury to the Authority, as may arise by reason of a flood,
earthquake, epidemic, riot, equipment failure, or similar event. Our review
disclosed that the Authority paid the Clerk of Works a total of $42,897. The
Clerk of Works assisted the Project Manager and Architect to make changes on
plans and specifications and assisted in verifying change order costs, including
quantity and quality for justifications of an increase in the construction contract.
41
The Authority’s former Modernization Coordinator performed Clerk of Works
duties before his termination on March 8, 2002. Four months passed between the
termination of the former Modernization Coordinator and the date the Authority
awarded the Clerk of Works contract on July 8, 2002. Therefore, the Authority
had ample time to advertise the contract. The Board of Commissioners
authorized the Authority’s Work Center Supervisor to function as the acting Clerk
of Works. Our discussions with the Authority’s Modernization Consultant
disclosed that the Work Center Supervisor was capable of providing satisfactory
Clerk of Works services. Therefore, the Authority’s rationale for this
noncompetitive award did not meet its emergency procurement criteria.
One year later, the Executive Director advertised the Clerk of Works position.
However, the Executive Director limited competition by advertising and closing
the contract within 7 days instead of the 25 days required by the Authority’s
procurement policy. The policy requires that the Authority give public notice for
each procurement at least 10 days before issuing the solicitation. The policy also
requires the Authority to provide a minimum of 15 days for preparation and
submission of the bids.
The Authority did not complete a narrative justifying the scoring for the
proposals. The narratives could show that the evaluation process was fair and
reasonable. In addition, the Authority did not execute the contract, dated July 8,
2003, until October 10, 2003. Therefore, the Clerk of Works worked for 3
months without a formal written contract.
Human Resources Consultant
The Authority provided no evidence that the contract for the Human Resource
Consultant was ever competed. The Authority’s former Executive Director
awarded the initial contract without competition for $85 per hour in 1997. The
current Executive Director renewed the contract without competition for the
period April 1998 to April 1999. From April 1999 through March 2001, no
contract or agreement was provided. In April 2002, the 1998 contract was
converted, without competition, from $85 per hour to a fixed amount of $1,500
per month plus out-of-pocket costs. A new agreement was not in place until the
Board of Commissioners’ approval was received on May 22, 2002. In February
2003, the contract was increased, without competition, to $2,000 per month,
retroactive to January 1, 2003. The reason given for the increase was additional
responsibilities brought on by the certification of the International Association of
Machinists union. Therefore, the consultant has worked for the Authority for 7
years without competing for a contract.
42
Scattered Site Implementation
Development Program
Manager
The Executive Director contracted with a Consultant in September 1999 to
provide management and relocation assistance services for scattered sites. The
contract was not fairly competed. The request for proposal was advertised for 18
days with only two proposals received.
Only one Board member evaluated the proposals, and narrative reports were not
issued to explain how the scores were determined. There was no explanation as
to why the Consultant’s $136,000 proposal was selected over a lower proposal bid
of $135,000. Also, we determined that the contractor signed the contract in blue
ink. However, the effective date of September 15, 1999, was written in blue felt
tip marker. The Consultant acknowledged on February 2, 2000, that he started
work before a written contract was established. Therefore, it appears that this
contract award may have been predetermined.
Modernization Program
Manager
The Executive Director awarded the same Consultant a $262,500 contract on
September 5, 2002, to provide modernization management and consulting
services. The request for proposal was advertised for only 12 days instead of the
required 25 days. Therefore, contractors not privy to the impending award had
little time to prepare and submit competitive proposals. The Authority’s files
lacked a narrative evaluation report to show how the scores were determined and
failed to show that the Consultant’s proposal provided the best value for the
Authority. Finally, the Executive Director awarded the contract 5 days before the
Board of Commissioners evaluated the Consultant’s proposals, indicating that the
award may have been predetermined.
Special Legal Counsel –
Employee Lawsuit
The Authority did not solicit bids or quotes for $86,688 in legal services it
received from the Special Legal Counsel. The Authority received legal services
to defend against a Federal whistle blower retaliation lawsuit. The Executive
Director provided no evidence that the services were properly competed or quotes
solicited.
43
Also, the Executive Director did not maintain a contract or agreement for the
$86,688 paid to defend the Authority in the lawsuit. The Authority’s Special
Legal Counsel eventually provided a signed engagement letter specifying the
scope of services and rates to be provided. However, there was no written
documentation indicating the Authority’s acceptance. In addition, no cost/price
analysis was performed to ensure price reasonableness.
Special Legal Counsel – Capital
Project Funding Issue
The Authority could not justify soliciting for legal services as a noncompetitive
emergency procurement. The Authority paid the Special Legal Counsel $25,287
for legal advice related to the funding of capital projects and to assess its legal
position regarding a potential lawsuit with National Association for the
Advancement of Colored People. The Executive Director stated that competition
was not required due to emergency repairs at Foran Towers. However, we
determined that there was insufficient evidence that the procurement was an
emergency. Under these conditions, prospective vendors were improperly denied
access to federally funded contracts. In addition, no cost/price analysis was
performed to ensure price reasonableness.
Special Legal Counsel –
Contract Dispute
The Executive Director did not execute and maintain a contract for legal services
regarding a construction contract dispute handled by the Special Legal Counsel.
The Special Legal Counsel started work in November of 2003. However, the
Special Legal Counsel and the Executive Director did not sign and formally
execute a contract until 3 months later in February of 2004. Therefore, a formal
contract or agreement establishing the services provided was not in place.
General Legal Counsel
The Authority provided no evidence that the procurement for General Legal
Counsel was ever competed, and the General Legal Counsel did not always have a
contract in place. The General Legal Counsel was first hired on September 30,
1994, for the period of October 1, 1994, to September 30, 1995, for $6,300. The
General Legal Counsel continued to work for the Authority without a contract for
an additional 6 years through September 30, 2001. The General Legal Counsel’s
44
contract was noncompetitively renewed for each of the next 2 years through
September 30, 2003, for $7,500 per year. Since the most recent agreement
expired September 30, 2003, the General Legal Counsel continued to work for the
Authority without a contract.
We note that for the period October 17, 2000, to December 17, 2003, the General
Legal Counsel was paid $168,673 for legal services of which we questioned
$100,266 (see finding 3).
The Authority’s Procurement Policy complies with HUD’s Annual Contributions
Contract; HUD Handbook 7460.8, Procurement Handbook for Public Housing
Agencies; and the procurement standard of 24 Code of Federal Regulations, part
85.36. However, as shown above, the Authority did not follow Federal
procurement regulations and its own policy in all cases of procured services.
Therefore, vendors were not provided an equal chance to obtain publicly funded
contracts, and the Authority was not assured that the best price and quality of
services available were received.
Conclusion
The Authority’s Executive Director did not fulfill his responsibility to establish
and implement effective management controls over the procurement process.
HUD has no assurances that the Authority’s procurement process is fair,
equitable, and results in the best quality and/or priced services obtained. In
addition, without formal contract documents, the Authority was at risk for over
billing and paying for unauthorized services.
Recommendation
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
7A. Implement procedures and controls to ensure that its contracts are awarded in a
manner providing full and open competition as required by HUD’s regulations
and its procurement policy.
45
Finding 8: The Authority Had Deficiencies in Several
Administrative Policies and Procedures
The Authority had deficiencies in several administrative areas relating to the
Executive Director’s employment contract and performance evaluations, the
Authority’s handling of personnel functions and employee benefits, and compliance
with requirements for executive sessions conducted during Board of Commissioner
meetings. The deficiencies noted in these areas included:
• The Authority did not obtain HUD approval for Executive Director’s long-
term contract,
• The Authority did not establish performance measurements and execute
performance evaluations for the Executive Director to justify his long-
term employment contract,
• HUD programs were improperly charged for the personal use of the
Executive Director’s vehicle,
• Board of Commissioners meeting minutes did not state the reasons for
going into executive sessions, and
• Employee evaluations were not performed for staff.
The deficiencies were caused by weak management controls and managements’
lack of awareness of HUD requirements and State laws.
As a result:
• The Executive Director’s employment contract requires the Authority to
pay the Executive Director’s salary and benefits for the full contract term
even in the event of involuntary termination of employment.
• HUD programs were charged $25,347 for the Executive Director’s
personal use of an Authority vehicle.
• Board of Commissioners did not publicly disclose its executive sessions,
ensuring that there was not improper business being conducted.
• Authority did not periodically evaluate employee performance.
46
Executive Director’s Contract
The Authority failed to obtain written approval from HUD for the Executive
Director’s 5-year contract. HUD Handbook 7460.8, REV-1, paragraph 4-27, part
B(3), states that an Executive Director may be hired as an employee or retained
under an employment contract and requires HUD approval in writing for
Executive Director employment contracts exceeding 2 years.
Executive Director’s
Performance and Long-Term
Employment Contract
On April 1, 1998, the Authority’s Board of Commissioners approved the
Executive Director’s employment contract with an initial 5-year term. The
contract contained a “golden parachute” renewal clause. In the event of an
involuntary termination of the Executive Director, the Authority shall pay the
Executive Director:
The Executive Director’s annual salary multiplied by the unexpired term of
the Agreement including any extensions in the Agreement,
• Severance pay in an amount of money equal to 2 weeks current salary for
each year of the Executive Director’s service to the Authority,
• An amount of money equal to the Executive Director’s accumulated sick
leave benefits based on his current salary,
• An amount of money equal to the Executive Director’s accumulated
vacation time based on his current salary,
• Recognized retirement status with medical benefits and life insurance
benefits identical to all retired Authority employees under the present
policy of the Authority, and
• Payments to any defined payment plans the Executive Director may have
earned based on plan parameters.
Board of Commissioners
Unfamiliar With HUD
Requirements
Our interpretation of the “third anniversary” clause contained in the Executive
Director’s contract with the Authority is that once the third anniversary passes,
the Executive Director has 3 years remaining on his employment contract unless
the Board of Commissioners votes not to extend his contract. This places the
47
Authority in the position of paying the Executive Director’s salary and benefits
for another 3 years or having to buy out the Executive Director’s contract. HUD
programs are at risk since the vast majority of the Authority's funding is received
from HUD. The current Board of Commissioners members were not on the
Board in 1998, at the time the contract was executed. Therefore, they could not
provide any information regarding the basis for approving the Executive
Director’s contract.
Two Board of Commissioner
Members Considered Executive
Director’s Contract
Unacceptable
On December 12, 2002, the Authority’s Chairman of the Board of Commissioners
initiated a resolution not to grant a 1-year extension on the Executive Director’s
employment contract beyond April 1, 2005, for the purpose of affording the Board
of Commissioners the ability to renegotiate that contract at its formal conclusion in
2004. The Chairman did not understand why Board members would make a long-
term commitment that would bind future members. In addition to the Chairman, a
second Board of Commissioner voted not to grant the 1-year extension through
April 1, 2005, because she concluded that the contract was unacceptable.
The remaining three Commissioners voted against this resolution. Therefore, the
Executive Director’s contract was extended. The three Commissioners voted
against the resolution because they believed that the Executive Director was
deserving of such a contract, although no specific performance documentation
was provided.
The Board of Commissioners did not vote in 2003. Therefore, on April 1, 2004,
the contract was automatically extended through April 1, 2007.
The Board of Commissioners did not act prudently in approving and continuing to
renew a contract that could put the Authority’s funds at risk. Such a long-term
lucrative contract should contain specific objectives and performance goals that
are used to measure the Executive Director’s performance to justify the continued
renewal of the contract.
The Executive Director’s contract is not valid from HUD’s perspective because
the Authority failed to obtain prior written approval of the contract from HUD.
Therefore, HUD should not assume any risk that could occur from involuntary
termination of the Executive Director’s employment.
48
HUD Criteria
HUD programs were charged $25,347 for the personal use of the Executive
Director’s vehicle. According to his contract, the Executive Director is entitled to
the use of an automobile and related expenses. However, prudent practice
dictates that the personal use of the vehicle should not be charged to HUD
programs. The Authority’s Board of Commissioners failed to establish sufficient
guidelines for the Executive Director’s personal use of an Authority vehicle.
Part A, section 2. of the Annual Contributions Contract stipulates that operating
expenditures shall include all costs incurred by the Housing Authority for
administration, maintenance, and other costs and charges that are necessary for
the operation of the public housing authority.
The Finance Director said the Authority had not calculated and withdrawn the
value provided by the Executive Director’s personal use of the automobile. In
fact, the Finance Director was not aware of the value of benefits provided to the
Executive Director for the use of the vehicle. According to the Finance Director,
the Authority’s Fee Accountant planned to calculate the benefits for personal use
of Authority vehicles in April of 2004 when compiling the Authority’s year-end
accounting statements.
Executive Director Received
Benefits of $25,347
The Authority paid the Executive Director for driving 79 miles per day to and
from work as well as the personal use of the vehicle on weekends, vacations, and
holidays. Therefore, HUD programs are charged with the costs associated with
the Executive Director’s personal use of the Authority’s vehicle. We estimated
that the Executive Director received $25,347 in benefits. The following table
explains the method used to calculate the amount of benefit derived by the
Executive Director. We excluded personal use on weekends, vacations, and
holidays from our computations.
49
Year Daily Work Days Total Internal Benefits
Commuting (52 wks @ 5 days/wk Commuting Revenue (Miles x Rate)
less 20 vacation days
Miles & 10 holidays)
Miles Service
Mileage
Rate
2000 79 230 18,170 $ 0.360 $ 6,541
2001 79 230 18,170 $ 0.365 $ 6,632
2002 79 230 18,170 $ 0.345 $ 6,269
2003 79 230 18,170 $ 0.325 $ 5,905
Total $ 25,347
Reasons for Going into
Executive Sessions Not
Established
The minutes of the general meetings for the Authority’s Board of Commissioners
did not contain the reason(s) why the Board went into an executive session. The
Board’s minutes only show the times that the motions were made to adjourn to
executive sessions and the time the executive sessions were completed. The
Executive Director was not aware of any specific disclosure requirements related
to executive sessions.
Prudent practice dictates that the Board minutes should provide an adequate
reason for going into executive session. Otherwise, the public cannot be assured
that the Authority’s Board is conducting business properly. Also, section 1-225
of the State of Connecticut’s Freedom of Information Act states that public
meetings, such as Board of Commissioners meetings, must state the reasons for
such executive sessions. Executive sessions cannot be used to shield public
employees from disclosure of substance of Board votes taken as result of
nonpublic discussions.
Personnel Issues
The Authority did not perform employee evaluations for staff. We interviewed
five key employees, and all expressed concern that they failed to receive an
annual performance rating in writing. The Authority’s failure to perform periodic
employee performance appraisals was unfair to employees. It also created
confusion among employees as to their eligibility for promotions or salary
increases and could lead to employee grievances and disputes. The Authority
failed to follow its personnel policies, which state that employees shall receive an
annual performance rating in writing and performance ratings shall be included in
employee service records.
50
Conclusion
Weak management controls and lack of familiarity with HUD requirements and
State laws created deficiencies related to the Executive Director’s performance
evaluations and related employment contract, the Authority’s handling of
personnel functions and employee benefits, and compliance with requirements for
executive sessions conducted during Board of Commissioner meetings.
The impact of these deficiencies includes the fact that the Executive Director’s
current employment contract places the Authority in the position of having to pay
the Executive Director’s salary and benefits for several years in the event of
involuntary termination of the Executive Director’s employment. HUD’s
programs are at risk because the vast majority of the Authority's funding is from
HUD programs. In addition, the Authority’s Board of Commissioners’ failure to
enforce proper guidelines for the Executive Director’s personal use of an
Authority vehicle resulted in HUD programs being charged with ineligible costs
of $25,347. This resulted in fewer funds available for the Authority to provide
affordable housing to tenants.
In addition, without proper disclosure of executive sessions, the public cannot be
assured that the Authority’s Board of Commissioners is not conducting improper
business.
The Authority’s failure to perform periodic employee performance appraisals was
unfair to employees. It created confusion among employees as to the eligibility
for promotions or salary increases and could lead to employee grievances and
disputes.
Recommend
We recommend that HUD’s Director of Public Housing, Boston Regional Office,
assure that the Authority:
8A. Submit the Executive Director’s current contract for HUD approval.
8B. Establish specific goals and measurements to evaluate the Executive Director’s
performance.
8C. Reimburse the applicable HUD programs $25,347 from nonfederal funds for
the Executive Director’s personal use of the Authority’s vehicle.
51
8D. Establish a policy to identify charges for personal benefits and withdraw
amounts to ensure that HUD programs are not charged.
8E. Ensure that Board of Commissioners’ minutes state the reason(s) for going
into an executive session.
8F. Ensure that all staff receive annual performance evaluations.
52
SCOPE AND METHODOLOGY
Our overall audit objective was to determine whether the Authority was operating
its Capital Fund program, Development Fund program, and Section 8 Voucher
program in an effective and efficient manner and in compliance with HUD
regulations, applicable laws, and contractual requirements. We also reviewed
specific administrative policies and procedures at the Authority.
To accomplish the audit objectives, we
• Reviewed Federal requirements including HUD Handbooks and Public
and Indian Housing Notices and Directives. In addition, we reviewed the
Housing Authority’s organizational and administrative structure,
administrative plans, and personnel policies; 24 Code of Federal
Regulations, part 941 - Public Housing Development; and recorded
minutes of the Board of Commissioner meetings.
• Interviewed Massachusetts and Connecticut State Office of Counsel and
Public Housing personnel to obtain information relating to the Authority’s
operations and management controls.
• Reviewed independent public accountant audit reports, as well as
monitoring reviews conducted by the HUD Field Office, to determine the
status of the Authority’s management and financial operations.
For the Capital Fund program, we
• Determined whether the Authority’s procurement practices complied with
HUD regulations and its own procurement policy.
• Interviewed the Harrison Avenue construction company related to the
contract dispute for Phase III.
• Examined a nonrepresentative sample of Capital Fund program contracts.
A nonrepresentative selection was appropriate because the items of
interest that had a high degree of risk were readily apparent. We did not
project the sample results to the universe.
53
For the development of scattered sites, we
• Evaluated the Authority’s development procurement practices related to
architectural and construction services, appraisals, program management
and relocation assistance, legal service, and acquired real estate to
determine whether procurements were conducted in accordance with
requirements of 24 Code of Federal Regulations, part 85.36.
• Evaluated 100 percent of income and related expenses for the Scattered
Site Development program because we considered this a high-risk area.
• Performed physical inspections to determine if units were occupied and
work completed and if at least one unit was handicapped accessible as
required by the Settlement Agreement.
For the Section 8 program, we
• Evaluated the Authority’s management controls and overall performance
of its Section 8 program.
• Evaluated the Section 8 inspections for assurance that housing quality
standards deficiencies were corrected in a timely manner and whether
subsidy payments were abated when deficiencies were not corrected
within the required period. We limited testing to Section 8 inspection
reports performed by an independent contractor during the period of
October 15, 2001, to December 31, 2003. We used the contractor’s web
site as our source document for inspection because the Authority’s files
were incomplete. The period tested was limited to inspections conducted
after October 15, 2001, because the web site only listed inspections after
that date.
To evaluate the Authority’s administrative policies and procedures, we
• Conducted interviews with the Board of Commissioners, Executive
Director, and Authority’s employees.
• Reviewed 100 percent of legal payments ($168,673) made to the
Authority’s General Legal Counsel covering the period from October
2000 to December 2003 and 100 percent of legal payments ($119,451)
made to the Authority’s Special Legal Counsel covering the period from
November 2002 through February 2004. We reviewed 100 percent
because we considered this a high-risk area.
54
• Reviewed the Executive Director’s employment contract and fringe
benefits. Also, we reviewed the Authority’s compliance with its personnel
policies and executive sessions.
We analyzed the Authority’s computer system to ensure accurate and reliable data
were maintained for its Federal programs and to determine at a minimum, 1) the
type of computers the Authority used, 2) how the computer system was organized,
3) the main characteristics of the system and environment, 4) how management
controlled computer system activities, and 5) any known problems with the
system.
The audit was conducted between June 2003 and February 2004 and covered the
period January 1, 2000, through December 31, 2003. When appropriate, the audit
was extended to include other periods.
We conducted our audit in accordance with all generally accepted government
auditing standards.
55
INTERNAL CONTROLS
Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:
• Effectiveness and efficiency of operations,
• Reliability of financial reporting, and
• Compliance with applicable laws and regulations.
Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined the following internal controls were relevant to our audit objectives:
• Administrative controls to assure proper management,
• Financial controls to assure proper accounting,
• Management controls over program receipts and expenditures,
• Management controls over procurement and contract administration, and
• Safeguards over assets; records; and compliance with applicable laws,
regulations, and contractual agreements.
We assessed the relevant controls identified above.
Significant Weaknesses
A significant weakness exists if management controls do not provide reasonable
assurance that the process for planning, organizing, directing, and controlling
program operations will meet the organization’s objectives.
Our review identified significant weaknesses in the management control areas we
assessed. Specific control weaknesses related to HUD programs are described in
the findings sections of this report.
56
FOLLOWUP ON PRIOR AUDITS
Prior Independent Public
Accountant Report Findings
The Annual Audit Financial Statements for fiscal years 2001 to 2003 contained
findings that the Authority’s Section 8 tenant files were not properly maintained.
Our audit determined that this condition had not been corrected. We focused our
review on the lack of housing quality standards inspection reports. (see finding 5)
57
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
AND FUNDS TO BE PUT TO BETTER USE
Recommendation Ineligible Unsupported Unnecessary Funds To Be Put to Better
Number 1/ 2/ 3/ Use 4/
1A $838,000
3A $135,824
4A $115,716
4B $100,266
4C $3,735
5A $26,280
5B $280,628
8C $25,347
Total $267,609 $3,735 $135,824 $1,118,628
1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
that the auditor believes are not allowable by law; contract; or Federal, State, or local
polices or regulations.
2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
or activity when we cannot determine eligibility at the time of audit. Unsupported costs
require a decision by HUD program officials. This decision, in addition to obtaining
supporting documentation, might involve a legal interpretation or clarification of
departmental policies and procedures.
3/ Unreasonable/unnecessary costs are those costs not generally recognized as ordinary,
prudent, relevant, and/or necessary within established practices. Unreasonable costs
exceed the costs that would be incurred by a prudent person in conducting a competitive
business.
4/ “Funds to be put to better use” are quantifiable savings that are anticipated to occur if an
OIG recommendation is implemented, resulting in reduced expenditures later for the
activities in question. This includes costs not incurred, deobligation of funds, withdrawal
of interest, reductions in outlays, avoidance of unnecessary expenditures, loans and
guarantees not made, and other savings.
58
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 1
59
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 2
Comment 3
Comment 4
Comment 5
Comment 6
Comment 7
60
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
61
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 5
Comment 5
Comment 5
62
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 7
Comment 7
Comment 7
63
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 8
Comment 9
Comment 9
64
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 9
Comment 10
65
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
66
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 11
67
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
68
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
69
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
70
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
71
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
72
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
73
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
74
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 12
Comment 13
Comment 13
Comment 13
75
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
76
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
Comment 14
77
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
Comment 14
78
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
79
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
80
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
81
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
82
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
Comment 14
83
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
Comment 14
84
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
Comment 14
85
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
86
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
87
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 14
88
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 15
Comment 16
Comment 17
89
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 18
Comment 19
90
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 20
Comment 21
Comment 22
91
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 23
92
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
93
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
94
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
95
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 24
96
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
97
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 25
Comment 26
98
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Refer to OIG Evaluation Auditee Comments
Comment 27
Comment 28
Comment 29
99
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 1 The Authority submitted a three-ring binder containing the response and
approximately 250 associated exhibits. Due to their volume, we did not
include the Authority’s exhibits in the report. However, we will make the
exhibits available to HUD upon request and to the public through a freedom of
information request.
Comment 2 The Authority’s assertion of drastically reduced subsidies is incorrect. The
subsidies have remained constant over the past 5 years.
Comment 3 The Authority’s statement on the amount of time spent conducting the audit is
an incorrect statement. We were only on-site at the Authority for a period of 8
months.
Comment 4 The statements on the Authority’s operation and accounting system are
misleading and give the impression that OIG made these representations in the
report. We did not make any representations on the Authority’s accounting
system in the report, and did not express any opinon regarding the existence of
irregularities or improprieties in the operation, or on the accuracy and reliablity
of data, or on its effective use of the data in managing its programs.
Comment 5 We strongly disagree with the Authority’s statements that the life threatening
conditions of the building were unsupported. The life threatening conditions at
Foran Towers were supported by three engineering studies performed at the
building. The life threatening conditions identified in the studies were the
poor condition of the building’s sanitary piping and the poor condition of the
building’s outer structure. The studies also point out that the temporary
solution of the canopy and fence did not eliminate the life threatening
condition of the building’s outer structure, and the building’s condition would
continue deteriorate until permanent replacement or repairs to the brick facde
were completed. In addition, we did consider the NATCOMM study on the
outer structure of the the building completed over one year ago. The Authority
trys to use the NATCOMM’s “Envelope Study,” to discount the life
threatening conditions described in the previous engineering studies. The
Authority points to the statement made by NATCOMM that there was “no
evidence of loose damage brick units” and “at this we are not of the opinion
that the veneer is in eminent danger of collapse”. However, NATCOMM
noted major deficiencies in the masonry construction, similar to those
identified in the three previous engineering studies. The NATCOMM study
stated “This condition (Façade Repair) must be addressed within the next 12
months.” Since the study was completed over one year ago, we believe our
assertions are supported and this work must be addressed immediately.
100
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 5 We believe the NATCOMM study supported that Foran Towers be prioritized
(Continued) ahead of the Harrison Avenue redevelopment due to the masonry construction
deficiencies, and necessary window and roof replacements. The Authority
needs to address and eliminate all of the poor conditions and the threats to
human life at Foran Towers.
In addition, we disagree with the Authority’s statement that it has consistently
included funds for modernization and repairs at Foran Towers in its five-year
Capital Plan. The Authority failed to fund renovations at Foran Towers when
serious health and safety issues first became evident. The Authority
reallocated 2000 and 2001 Program funds that were designated for repairs of
the brick facade at Foran Towers to Harrison Avenue. In fact, the Authority
did not allocate any funding for Program Years 1996 through 2003 for repairs
of the damaged brick facade or the sanitary piping at Foran Towers. Instead,
the Authority funded a construction contract for modernization at Harrison
Avenue. The Authority continues to disregard HUD program officials and
OIG recommendations to prioritize Foran Towers poor conditions, and
recently the Authority decided to vacate Harrison Avenue and go forward with
additional renovations estimated to cost $1.5 million for phase III. These
costly renovations will leave little funding for the elimination of Foran
Towers’ life threatening conditions for several years.
Comment 6 The Authority states that the continued deterioration of the Harrison Avenue
Development resulted from the heavy use of residing families for over thirty
years. However, the Authority needs to accept the responsibility for the
deterioration of the housing stock which is the result of the Authority’s failure
to enforce the lease and conduct periodic rehabilitation efforts of its housing
stock during the thirty years. In addition, the heavy use by families does not
warrant the diversion of funds needed to address the exigent health and safety
conditions at Foran Towers.
101
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
The dispute and Authority’s need to defend itself was the result of the
Comment 7
Authority’s failure to notify the Harrison Avenue Construction Company of its
decision to deduct Phase III in writing. In fact, the Authority’s General
Counsel informed OIG that it was his mistake that the Contractor was only
notified orally, and was not notified in writing regarding the elimination of
Phase III. The Authority was responsible for the litigation and the legal
expenses incurred are considered unnecessary. However, the dispute was
settled, and we withdraw our recommendation. Our position regarding
counsel’s litigation fees is that the fees were unnecessary, ineligible program
costs and should be repaid from nonfederal funds (Recommendation 4A).
We maintain that the Authority’s failure to monitor construction
activities and make timely decisions contributed to significant delays in
completing Phase I & II. We disagree with the Authority’s statement that
rehabilitation work on Phase I & II was completed efficiently and effectively
since the work was not completed until approximately 8 months past the
revised completion date of May 19, 2003. Further evidence of the Authority’s
inefficiency and ineffectiveness were the failure to obtain required
construction progress schedules and timely enforce the liquidating damages
clause of the contract for contractor caused delays during the construction
period. This is further supported by the arbitrator’s decision not to award
liquidating damages clauses that the Authority ultimately sought.
Comment 8 The Authority’s representation that HUD imposed a $100,00 threshold
requirement due to their effective procurement practices is incorrect. The
threshold requirement is a limit established for everyone and is not reflective
of how good the Authority’s practices are, or how well they were being
followed. In addition, the procurement was not in accordance with the
Authority’s procurement policy because a formal contract was not in place
until 3 months after legal work was started. (See Finding 7) We do concur that
HUD Regional Counsel concurrence is required prior to the award of litigation
services contracts expected to exceed the $100,000 threshold. However, the
issue here is not the award of the contract that required the HUD Regional
Counsel concurrence but rather that concurrence was required before
expending funds for litigation.
102
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 9
We disagree with the Authority’s statement that OIG’s method was flawed
because certain variables there were not taken into consideration. The
Architect committed an error and a change order was necessary to correct the
error. The Authority acknowledged that the Architect omitted a portion of the
required asbestos abatement from project specifications, and is
misrepresenting our statement on the need for a change order. If the Architect
had properly computed the area for asbestos replacement, the original bid may
have been lower due to the normal volume discount for the replacement. If the
Authority believed that the Architect was at fault, it should have attempted to
recover the increased cost from the Architect. The Army Corp stated that the
change order was acceptable and cited the 30% reduction achieved through
negotiations. We believe this supports our original premise that the omission
may have resulted in excessive costs bid for the change order. In addition, the
Authority failed to provide documentation in support of its statement that the
cost to abate asbestos would be in excess of $4,000 per unit at the time of our
audit. However, based on the additional factual data submitted in the
Authority’s written response, we removed recommendation 2B regarding the
overpayment.
Comment 10 The Authority stated that OIG did not provide any support for its estimate of
$19,500 required to bring the 9 units in Phase III up to Uniform Property
Condition Standards. We maintain that 9 vacant units in Phase III of Harrison
should be prepared for occupancy. We consider the estimate to repair units as
reliable based on the input received from two qualified sources. In fact, one of
the Authority’s own staff (Work Center Supervisor) provided us the $19,500
estimate to bring the 9 units on line. OIG, and two employees from the local
HUD field office, including a Construction Analyst, concurred that the units
could be brought up to Uniform Property Condition Standards at a minimal
cost. These units have been vacant for two years and the Authority has lost
significant rental income and the opportunity to house families. We note that
seven of the adjacent units were occupied during our review. Therefore, we do
not understand the need for complete asbestos removal. We contend that the
units can be brought up to physical conditions standards at minimal cost until
the Authority has the funding for major renovations.
103
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 11 The Authority states in the response that “the decision to replace certain
fixtures and equipment were both adequately supported and prudent.” The
Authority provided approximately 40 photographs, and several change order
documents as evidence that they did not prematurely replace capital assets.
However, the photographs provided with the Authority’s response were
difficult to view or not clearly marked, dated, or traceable to the properties in
question. During the audit, the Architect and Appraiser provided extensive
photographs that indicated that the fixtures did not have to be replaced. In
addition, the Authority repeatedly stated, “Due to the unknown age, condition,
and efficiency of all appliances MHA commissioners made the determination
to replace and standarize all appliances.” The response clearly supports our
determination that the capital assets were replaced regardless of their physical
condition and that no cost benefit analysis was performed as required by
HUD’s Public Housing Modernization Standards Handbook 7485.2,
concerning premature replacement. The Authority’s response also fails to
clearly present the condition of capital assests that were known. For example,
the Authority’s response cites 3 locations (136 Merwin Ave, 76-78 Atwater St,
and 79-81 Elaine St.) but fails to include the appraiser and architect reports
which indicated that the furnaces were only 2 years old, yet they were
replaced. The Authority’s response only provided anecdotal evidence,
pictures, and a few change order proposals prepared by the renovations
contractor. They did not provide any factual data to change our position.
Comment 12 We acknowledge the Authority’s intent to comply with our recommendation to
update and maintain an inventory for the scattered site equipment.
The Authority contends that scattered site units are not subject to the
Comment 13
handicapped accessible rule. The Authority also stated that all project plans
and specifications submitted were approved by HUD, and received no notice
of alleged Section 504 non-compliance prior to receipt of the draft audit report.
We disagree. The governing criteria is contained in the Authority’s Plan for
the Development of Scattered Site Properties (Part II, Section A) that stated
“The MHA intends to satisfy the section 504 requirement that 5% of all newly
developed, acquired, or rehabilitated units (in this case, 2 of the 28 units) be
accessible or adaptable to the mobility impaired.”
104
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 13 In addition, the Settlement Agreeement between the Authority, the Department
(Continued) of Justice and the National Association For the Advancement of Colored
People states that the Authority is “to ensure that persons with disabilities have
equal opportunity to live in the Authority’s subsidized housing units for
families, those units will comply with the Fair Housing Act, Section 504 of the
Rehabilitation Act, and HUD’s accesibility guidelines set forth in 24 CFR Part
40 and 24 CFR Part 100.205.” These guidelines also contain the 5%
requirement. Furthermore, HUD is not responsible for detecting Section 504
violations. Compliance with Section 504 is the responsibility of the
Authority. We also disagree with the Authority’s response that they are in
compliance with Section 504. The Authority contends that scattered site units
do not constitute new construction and are not subject to the 5% handicapped
accessibility requirement based on the PIH notice. In this case, the Settlement
Agreement between the Authority, the Department of Justice and the National
Association For the Advancement of Colored People takes precidence.
Comment 14 The Authority contends that the legal costs are eligible and supported, but no
additional documentation was provided with the response. In addition to the
costs being ineligible and unsupported, we continue to maintain that the
services were not properly procured (See Finding 7). Since we coordinated
this finding with HUD Regional Counsel, we have forwarded the Authority’s
response to them for final analysis and resolution.
The Authority contends that the hourly rate paid to General Counsel is
reasonable. However, OIG’s concern is not whether the hourly rate is
reasonable, but whether the Authority is contractually obligated to pay for
these services and whether documentation is adequate to support the billings
for legal services outside of the retainer contract to determine eligibility.
The Authority contends that they complied with federal regulations for
General and Special Legal Counsel, and the legal charges are eligible because
the attorney advised the Authority of all charges exceeding the scope of the
services contract. We disagree. The legal charges are not eligible because they
were not supported by proper documentation. The Authority improperly paid
for additional costs for services contained in General Counsel’s annual retainer
contract and did not did comply with the requirements of the HUD Litigation
Handbook for litigation services.
105
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 14
The Authority contends that fees paid to legal counsel were eligible because of
(continued)
the HUD litigation handbook criteria, HUD’s requirement for allowable
expenses, OMB Circular A-87 attachment B item 10(B), HUD’s Settlement
Agreement, and potential investigation by the City. In addition, the Authority
contends that budgetary and actual costs and billings were provided to the
Executive Director and discussed and approved by the Board of
Commissioners. This response is not relevant to our findings because it gives
the impression that the Board was fully informed. We interviewed the Board
of Commissioner’s and determined that they were unaware of the requirements
contained in HUD’s Litigation Handbook requiring prior HUD approval for
expenditures. In addition, the Board was not familiar with what was contained
in General Legal Counsel’s retainer contract but rather relied on the Executive
Director’s and General Counsel’s assertions.
The Authority contends that litigation HUD does not allow is limited to court
litigation and they (Authority) were not involved in court litigation. We
disagree. HUD policy and Federal cost principles as established by the Office
of Management and Budget do not permit a public housing authority to use
project or program funds to pay the costs of litigation against HUD.
The Authority contends that they never threatened litigation against HUD.
The finding states that the Authority paid for legal services to defend against
HUD because they erroneously believed that HUD was going to bring suit
against them. Regardless of the Authority’s misintrepretation of the facts in
the finding, the legal service cost they spent under the erroneous belief of
possible ligitation against HUD are not an allowable program cost.
The Authority is responsible for managing the program to ensure that costs are
allowable program costs. The Authority cannot transfer this responsibiltiy to
HUD by claiming that HUD Regional Counsel did not communicate to the
Authority that the Authority was not in compliance or by claiming that they
(Authority) did not have to comply with the litigation handbook because they
intrepreted the handbook differently. The Authority did not comply with HUD
requirements for procuring the services of an attorney.
106
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 15 The Authority feels that an appropriate system was in place but not followed
and is taking steps to implement a more effective system. Also, they did not
agree with our calculation of $26,280 for administrative fees. The Authority
stated that they did not believe we took into account the 30 days in which the
owner had to make repairs.
Management should have realized that procedures were not followed, and by
their own admission, these deficiencies “resulted in housing assistance payments
being provided for units that did not currently meet housing quality standards”.
We contend that our calculation did provide the 30 day grace period. In addition,
we offered to provide support and further discussion for any of our findings at the
time the discussion draft report was transmitted as well as at the exit conference.
In fact, data was requested and provided to the Authority for another finding
(asbestos omission). Detailed computations will be furnished upon request.
Comment 16 The Authority feels that it had an appropriate system in place. However, the
Authority has taken steps to implement a more effective system by
subcontracting this effort to the Ansonia, Connectiuct Housing Authority and
working with its inpection firm, Kelson and Associates. In addition, the
Authority states that the Section 8 staff took actions that had the effect of
concealing the non-abatement from the Executive Director.
We strongly disagree with the Authority’s statement that it had an appropriate
system in place. We contend that the Executive Director did little to monitor
known inspection deficiencies and did not take appropriate action when he was
apprised by his Section 8 staff. We found no evidence that the Section 8 staff
took actions to conceal non-abatements from the Executive Director. In
conclusion, it is ultimately the responsibility of the Executive Director to
ensure that the Section 8 staff follows established procedures.
Comment 17 The Authority stated that a new system has been implemented that should
improve the quality control procedures over inspections and abatements.
We concur.
The Authority stated that with the assistance of its Section 8 Administrator, the
Comment 18
new system should allow the Authority to abate subsidies for units that do not
meet housing quality standards. We concur.
107
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 19 Prior to its hiring Ansonia Housing Authority, the Authority stated that the
Section 8 Program was adequately staffed and that the staff received
appropriate training. We disagree with the Authority’s assessment. Our report
did not comment or question whether or not staff received appropriate training.
However, we contend that the Authority’s Section 8 Program could have
benefited by having more staff available to process Section 8 applicants and
have more applicants out shopping for units.
Comment 20 The Authority states that it is currently at 99.7% of its monthly budget
authority and will monitor this on a monthly basis. The Authority also stated
that on May 28, 2002, the Executive Director requested a 119% payment
standard from HUD due to difficulty in leasing units. In addition, in
September 2003, the Authority drafted a Section 8 Project Based Assistance
Program Request for Proposal that was put on hold due to funding constraints.
In fiscal year 2005, HUD revised its method of funding the Section 8 Program
due to budgetary constraints. Because the Authority historically underutilized
it’s authorized funding, HUD significantly reduced its FY05 funding to its
historical baseline. As a result, the Authority is leased at 99.7% of its monthly
budget authority and is serving 211 eligible families.
We maintain that had the Authority made sufficient efforts to lease Section 8
Program units at an acceptable rate their current funding would not have been
reduced. As a result, we estimate that the Authority has lost the ability to
house approximately 55 additional families (266 – 211) in the City of Milford.
In addition, we disagree that the Authority was proactive to the April 23, 2002
onsite review by HUD. The Authority’s May 28, 2002 letter requesting a
119% payment standard was in direct response to the local HUD field office’s
May 3, 2002 e-mail informing the Authority that they could increase rents to
119% of the published Fair Market Rents without completing a survey.
Based on the Authority’s response, we revised our recommendation to
require the Authority to submit a monitoring plan to ensure they use all
available funding.
108
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 21 The Authority stated that they reviewed the payment standards currently in use
in conjunction with its new Section 8 contract administrator and is now using
the correct standards. In addition, the Authority stated they complied with
HUD’s recommended practice for annual re-certifications. Although our
finding and recommendation referred to using proper payment standards for
new tenants, not re-certifications, the Authority’s corrective actions should
result in the use of proper payment standards.
Comment 22 We agree with the Authority that the Section 8 Program Assistant was made
aware of changes in Fair Market Rents for existing housing. The Executive
Director recently provided OIG emails sent to the Section 8 Program Assistant
with regard to the annual changes required by HUD in the FMR’s. Based on
the emails, OIG agrees with the Authority’s assertion and has removed the
statement from the report.
The Authority asserted that the Executive Director and Board of
Comment 23
Commissioners worked continuously to manage its procurement policy. The
Authority states that it provided extensive evidence that the organization
procured goods and services in a manner that resulted in the best quality and/or
prices for services obtained. The Authority stated that the procurement of
Clerk of Works was an emergency procurement. The Authority added that the
procurement resulted in fair and reasonable rates.
We strongly disagree. Based on our review, it was evident that the Authority’s
procurement practices did not comply with HUD regulations and its own
procurement policy. The Authority’s response contained no more factual data
than what we obtained during the course of our audit. Contrary to the
statements made by the Authority, the evidence we received was not sufficient
to assure that the Authority procured goods and services in a manner that
resulted in the best quality and/or prices for services. Therefore, our
recommendation remains unchanged.
We disagree that the procurement of Clerk of Works qualified as an
emergency procurement. Consideration of rates is not the main focus in this
situation. The Authority did not comply with HUD regulations and its own
procurement policy which states that noncompetitive awards may be used only
when an emergency exists that seriously threatens the public health, welfare,
or safety or endangers property or would otherwise cause serious injury to the
Authority, as may arise by reason of a flood, earthquake, epidemic, riot,
equipment failure, or similar event.
109
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 24 The Authority stated that the Executive Director’s 5-year employment contract
was not subject to HUD review and approval under Handbook 7640.8 Rev-1.
Also, the Authority stated that multi-year contracts for Executive Directors do
not violate any federal statute or regulation of HUD. The Executive Director
utilizes Part II, Section 14 of the ACC, applicable to conditions of employment
and benefit plans, to contend that HUD has no jurisdiction over the
employment contract. The Authority stated that the procurement Handbook is
not applicable to employment contracts nor are the procurement regulations at
24 CFR 85.36.
We disagree. HUD requirements limit multi-year contracts for the Execuitve
Directors to 2 years. We believe that the Handbook is applicable, and states
that an Executive Director may be hired as an employee or retained under an
employment contract and, if such agreement exceeds two years, approval from
HUD is required. OIG utilized handbook criteria, handbook 7460.8, Section
4-27B, as criteria without reference to the ACC. Therefore, there is no conflict
between the handbook and the ACC. Contrary to Authority’s assertions, HUD
does have authority over the employment contract. The Executive Director is
correct that HUD did abolish the Personnel Policies handbook containing the
criterion being used in the finding. However, the provision in the Handbook
was reinstated in the procurement handbook when it was revised. The revision
to the handbook does address employment contracts for executive directors of
housing authorities with more than 250 units and this Authority is subject to
this provision. We confirmed our understanding with HUD legal in Hartford,
Connecticut who had contacted HUD Legal in headquaters for an opinion.
Comment 25 The Authority stated that it established specific goals and measurements to
evaluate the Executive Director’s performance. We disagree with the
Authority’s response. Other than anectdotal evidence, no documentation was
provided to support this statement.
Comment 26 The Authority stated that since the Executive Director is on call 24 hours a
day, seven days a week the use of a vehicle for commuting to and from work
should be an eligible expense. We disagree. We consider the Executive
Director’s normal commute to be a personal expense and any reasonble
method to calculate the expense amount to be withdrawn for the period is
acceptable. In those rare instances when the Executive Director uses the
vehicle to respond to emergencies, we would consider the cost to be an eligible
business expense.
110
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
OIG Evaluation of Auditee Comments
Comment 27 The Authority stated that it will continue to accurately prorate and allocate
expenses between activities and W-2’s will be issued to employees who have
personal use of a vehicle. We concur these personal costs should be reported
on employee W 2’s. However, the personal costs should not be charged to
programs.
Comment 28 The Authority stated that it will continue to comply with the Freedom of
Information Act and that the reasons for the executive sessions were included
on their agendas. We disagree. Agendas are planned events that may not
occur. The Board Minutes are a permanent record of what actually transpired.
Therefore, the minutes need to reflect the reasons for going into executive
session.
Comment 29 The Authority stated it will comply with its union agreements and provide
evaluations in accordance with its personnel policy. Although the Authority’s
prior personnel policy dictated that all employees of the Authority were to
receive annual performance ratings in writing and they did not, the policy
needs to be enforced.
111
Appendix C
SCHEDULE OF PREMATURE REPLACEMENTS FOR
SCATTERED SITES
Property Refrig- Kitchen Furnaces Roofs Hot Total
Address erators/ Cabinets & Water Costs
Ranges Countertops System
136 Merwin 1,300 3,300 4,750 9,350
Avenue (single
family)
Appraiser’s Report 4/6/2000, Property has new appliances. The furnace and oil tank were
replaced in 1998. Architect’s Report 2/8/2000, Kitchen cabinets and appliances were in
good condition. The Mechanical and Electrical Report indicated that the oil-fired furnace
was 2 years old.
176-178 Platt 2,600 9,200 6,100 17,900
Street (two
family)
Appraiser’s Report 4/6/2000, Property is in average/good condition overall. All
appliances, mechanicals, and utilities are in average condition. Current condition has no
adverse effect on marketability of property. Architect’s Report 1/28/2000, Kitchen
cabinets and countertops were in good condition. The Mechanical and Electrical Report
indicated that the two gas-fired furnaces used are 12 to 15 years and 15 to 20 years old,
respectively.
20 White Oaks 1,300 4,500 5,800
Terrace (single
family)
Appraiser’s Report 4/12/2000, No obsolescence noted for property and no repairs or
improvements are recommended at this time. The effective age of the property reflects
regular maintenance and repairs of the improvements. Architect’s Report 2/3/2000,
Kitchen cabinets were in good condition.
22-24 Casco 2,600 12,318 14,918
Street (two
family)
Appraiser’s Report 4/10/2000, Property is in good overall condition. All appliances,
mechanicals, and utilities are in average condition. Current condition has no adverse
effect on marketability of property. No repairs or upgrades were required. Architect’s
Report 1/28/2000, Kitchen cabinets and countertops were in good condition.
86-88 West 2,600 4,600 4,600 11,800
Town Street
(two family)
112
Appendix C
SCHEDULE OF PREMATURE REPLACEMENTS FOR
SCATTERED SITES
Property Refridg Kitchen Furnaces Roofs Hot Total
Address erators/ Cabinets & Water Costs
Ranges Countertops System
Appraiser’s Report 12/15/2000, Property in good condition overall. All appliances,
mechanicals, and utilities in average condition. Current condition has no adverse effect
on marketability of property. No needed repairs or upgrades. Architect’s Report
10/13/2000, Kitchen cabinets and countertops were in good condition. Mechanical and
Electrical Report indicated heating supplied by two furnaces; age of which are unknown.
76-78 Atwater 2,600 4,222 5,000 1,100 12,922
Street (two
family)
Appraiser's Report 1/2/2000, Unit was remodeled within the past 2 years. Kitchens,
including cabinets, and furnaces are 2 years old. All appliances, mechanicals, and
utilities are reported in good condition. No repairs or upgrades are required. Architect’s
Report 11/14/2000, Kitchen cabinets and countertops were in good condition. Architect
indicated property was remodeled within the past 2 years.
79-81 Elaine 2,600 5,000 2,300 9,900
Street (two
family)
Appraiser's Report 1/2/2000, Unit was remodeled within the past 2 years. Property
reported to be in good condition. Kitchens and furnaces are only 2 years old, and
property has new kitchen cabinets/countertops. No needed repairs or upgrades noted.
Architect’s Report 11/14/2000, Kitchen cabinets and appliances reported in good
condition. Mechanical and Electrical Report indicated that the furnace was installed in
1998.
10 Housatonic 7,800 27,000 18,434 53,234
Avenue (6
units)
Appraiser’s Report 12/22/2000, Property is in great condition. Appraiser reported that
property is approximately 10 years old and has new appliances. Architect’s Report
2/5/2001, Kitchen cabinets/countertops and appliances were in good condition.
Grand Totals $23,400 $65,140 $25,450 $18,434 $3,400 $135,824
113
Appendix D
SCHEDULE OF FEDERAL SUBSIDIES EXPENDED FOR
SUBSTANDARD HOUSING
Date Date Months Total Exigent?
Address Failed Passed Lapsed HAPAssistance Yes/No
Payment
Amount
27 Lansdale Avenue 3/20/02 6/7/02 2 $ 674 No
27 Lansdale Avenue 4/10/03 9/12/03 4 1,956 No
71 Bridgeport Avenue 3/21/02 6/7/02 3 978 Yes
27 Wildwood Avenue 5/9/02 4/8/03 11 8,965 Yes
nd
27 Broadway 2 1/29/02 4/8/02 2 2,087 No
27 Broadway 2nd 5/20/03 * 6 6,150 No
52 A Locust Street 8/20/02 11/15/02 2 1,536 No
52 A Locust Street 4/21/03 * 7 5,376 No
43 Laurel Avenue 9/19/01 11/1/02 13 9,571 No
12 Bridgeport Avenue 4/9/03 6/2/03 1 456 No
180 Melba Street #218 9/13/02 12/13/02 2 608 No
308 Meadowside #201 3/18/02 5/10/02 1 603 No
308 Meadowside #201 4/22/03 5/23/03 1 725 Yes
137 Edgefield Avenue 4/18/02 7/10/03 15 11,760 Yes
757 Milford Point Road 4/15/02 5/31/02 1 422 Yes
152 Broad Street Rear 12/13/02 5/19/03 5 1,830 Yes
118 Naugatuck Avenue 2nd 11/18/02 4/1/03 5 3,975 Yes
22 Darina Place 11/19/02 12/31/02 1 694 Yes
22 Darina Place 5/28/02 * 19 12,878 Yes
68 Cooper Avenue 7/19/02 11/18/02 4 3,992 Yes
101-103 Bridgeport Ave 4/9/03 * 8 7,800 Yes
155 West Main Street 3/20/02 6/11/02 3 1,470 Yes
183 Broadway 1st Floor 1/14/02 4/8/02 3 882 Yes
33 Broadway #3 9/19/01 10/30/02 12 8,424 No
33 Broadway #3 4/23/03 5/29/03 1 1,144 Yes
33 Broadway #3 9/23/03 * 2 2,288 No
92 Opal Street 3/21/02 1/21/04 22 6,525 Yes
95 Naugatuck Avenue 1/30/02 4/15/02 2 1,550 No
4 Elm Street #1 4/18/02 6/11/02 2 1,924 Yes
4 Elm Street #1 4/23/03 * 7 7,875 No
300 Meadowside #208 4/21/03 * 7 5,915 No
58 Laurel Avenue 12/13/02 3/13/03 2 2,088 No
121 Seemans Lane #14 5/19/03 8/11/03 2 958 No
82 West Town Street 4/21/03 8/11/03 3 3,000 No
180 Melba Street #303 3/25/02 6/11/02 2 492 No
180 Melba Street #303 4/7/03 8/11/03 3 861 No
218 West Main Street 1st 4/21/03 6/2/03 1 683 No
107 Bridgeport Avenue 4/15/02 7/19/02 3 2,050 Yes
19 James Street 11/18/02 4/10/03 4 3,608 No
*An asterisk indicates that deficiencies have not been corrected as of December 31, 2003.
114
Appendix D
SCHEDULE OF FEDERAL SUBSIDIES EXPENDED FOR
SUBSTANDARD HOUSING
Date Date Months Total Assistance Exigent
Address Failed Passed Lapsed Payment ?
Amount Yes/No
138 Melba Street 1st 3/25/02 6/11/02 2 710 No
105 Bridgeport Avenue 4/9/03 9/23/03 4 3,300 No
44 Harkness Avenue 1/28/02 9/23/03 19 17,822 No
49 A Fairwood Avenue 4/8/02 * 19 13,129 No
st
601 Milford Point Road, 1 4/10/03 * 8 6,496 Yes
27 Peck Street 4/21/03 7/10/03 2 2,588 No
1 Park Circle #2 3/21/02 6/11/02 2 1,138 No
33 Broadway, Rear 1/14/02 4/8/02 2 1,144 No
54 A Naugatuck Avenue 11/18/02 * 12 5,376 No
92 B Robert Treat Drive 4/22/03 * 8 4,216 Yes
194 A Cherry Street 4/21/03 6/2/03 1 251 No
216 Naugatuck Avenue, 1st 1/28/02 5/31/02 3 1,791 No
91 C Robert Treat Drive 3/20/02 5/10/02 1 351 No
91 C Robert Treat Drive 4/22/03 * 7 5,505 No
27 Broadway, 1st 1/14/02 4/8/02 3 2,700 Yes
st
27 Broadway, 1 4/23/03 9/12/03 5 4,500 Yes
122 Naugatuck Avenue 1/28/02 6/7/02 4 2,500 No
122 Naugatuck Avenue 5/20/03 * 7 4,995 Yes
273 Seaside Avenue, 2nd 4/19/02 8/20/02 3 936 No
st
27 Kittery Street, 1 11/18/02 3/13/03 4 3,300 Yes
106C Merwin Avenue 4/19/02 * 19 11,006 No
52 Hawley Avenue #6 4/19/02 7/19/02 2 822 No
76 Dunbar Road 3/21/02 9/12/02 6 6,768 Yes
76 Dunbar Road 4/8/03 * 8 9,024 Yes
308 Meadowside #103 4/22/03 8/11/03 3 2,127 No
180 Melba Street #301 4/7/03 10/21/03 5 3,260 No
180 Melba Street #301 3/20/02 9/12/02 5 4,000 No
16 Wall Street 2nd Floor #2 3/25/02 6/11/02 2 862 No
36 Beechland Avenue 3/25/02 7/8/02 3 3,351 No
36 Beechland Avenue 4/7/03 7/15/03 2 1,184 No
180 Melba Street #309 9/13/02 12/13/02 2 1,614 No
519 Naugatuck Avenue 2nd 3/20/02 6/7/02 2 1,162 No
24 Lenox Avenue 2nd Fl 3/21/02 5/9/02 2 1,086 Yes
24 Darina Place 3/20/02 9/12/02 5 5,000 No
1070 New Haven #76 4/8/03 6/2/03 1 851 No
106B Merwin Avenue 7/19/02 3/13/03 8 6,992 Yes
180 Melba Street #105 9/13/02 12/13/02 2 1,650 No
rd
27 Broadway 3 Floor 5/20/03 9/12/03 4 2,348 Yes
Grand Total 391 $280,628
*An asterisk indicates that deficiencies have not been corrected as of December 31, 2003.
115
Appendix E
SCHEDULE OF QUESTIONED ADMINISTRATIVE FEES
AUTHORITY RECEIVED TO MANAGE SUBSTANDARD
HOUSING
Address Months of Admin. Questioned
Abatement Fees Fees
27 Lansdale Avenue 2 $65.67 $131
27 Lansdale Avenue 4 67.83 271
71 Bridgeport Avenue 3 65.67 197
27 Wildwood Avenue 11 67.83 746
27 Broadway, 2nd 2 65.67 131
27 Broadway, 2nd 6 67.83 407
52 A Locust Street 2 67.83 136
52 A Locust Street 7 67.83 475
43 Laurel Avenue 13 65.67 854
12 Bridgeport Avenue 1 67.83 68
180 Melba Street #218 2 67.83 136
308 Meadowside #201 1 65.67 66
308 Meadowside #201 1 67.83 68
137 Edgefield Avenue 15 65.67 985
757 Milford Point Road 1 65.67 66
152 Broad Street Rear 5 67.83 339
118 Naugatuck Avenue 2nd 5 67.83 339
22 Darina Place 1 67.83 68
22 Darina Place 19 67.83 1,289
68 Cooper Avenue 4 65.67 263
101-103 Bridgeport Avenue 8 67.83 543
155 West Main Street 3 65.67 197
183 Broadway Street 3 67.83 203
33 Broadway #3 12 65.67 788
33 Broadway #3 1 67.83 68
33 Broadway #3 2 67.83 136
92 Opal Street 22 67.83 1,492
95 Naugatuck Avenue 2 65.67 131
4 Elm Street #1 2 65.67 131
4 Elm Street #1 7 67.83 475
300 Meadowside #208 7 67.83 475
58 Laurel Avenue 2 67.83 136
121 Seemans Lane #14 2 67.83 136
82 West Town Street 3 67.83 203
180 Melba Street #303 2 65.67 131
180 Melba Street #303 3 67.83 203
218 West Main Street 1st 1 67.83 68
107 Bridgeport Avenue 3 65.67 197
19 James Street 4 67.83 271
138 Melba Street 1st 2 65.67 131
116
Appendix E
SCHEDULE OF QUESTIONED ADMINISTRATIVE FEES
AUTHORITY RECEIVED TO MANAGE SUBSTANDARD
HOUSING
Address Months of Admin. Fees Questioned Fees
Abatement
105 Bridgeport Avenue 4 $67.83 $271
44 Harkness Avenue 19 67.83 1,289
49 A Fairwood Avenue 19 67.83 1,289
601 Milford Point Road 1st 8 67.83 543
27 Peck Street 2 67.83 136
1 Park Circle #2 2 65.67 131
33 Broadway, Rear 2 65.67 131
54 A Naugatuck Avenue 12 67.83 814
92 B Robert Treat Drive 8 67.83 543
194 A Cherry Street 1 67.83 68
216 Naugatuck Avenue 1st 3 65.67 197
91 C Robert Treat Drive 1 65.67 66
91 C Robert Treat Drive 7 67.83 475
27 Broadway 1st Floor 3 65.67 197
27 Broadway 1st Floor 5 67.83 339
122 Naugatuck Avenue 4 65.67 263
122 Naugatuck Avenue 7 67.83 475
273 Seaside Avenue 2nd 3 65.67 197
27 Kittery Street 1st Floor 4 67.83 271
106 C Merwin Avenue 19 67.83 1,289
52 Hawley Avenue #6 2 65.67 131
76 Dunbar Road 6 65.67 394
76 Dunbar Road 8 67.83 543
308 Meadowside Road 103 3 67.83 203
180 Melba Street #301 5 67.83 339
180 Melba Street #301 5 65.67 328
16 Wall Street 2nd Floor #2 2 65.67 131
36 Beechland Avenue 3 65.67 197
36 Beechland Avenue 2 67.83 136
180 Melba Street #309 2 67.83 136
519 Naugatuck Avenue 2nd 2 65.67 131
24 Lenox Avenue 2nd Floor 2 65.67 131
24 Darina Place 5 65.67 328
1070 New Haven Ave #76 1 67.83 68
106 B Merwin Avenue 8 67.83 543
180 Melba Street #105 2 67.83 136
27 Broadway 3rd Floor 4 67.83 271
Total 391 $26,280
117
Audit of Milford, CT, Housing Authority's Capital Fund Program, Development Grants for Scattered Sites, Section 8 Voucher Program, and Specific Administrative Policies and Procedures
Published by the Department of Housing and Urban Development, Office of Inspector General on 2005-04-25.
Below is a raw (and likely hideous) rendition of the original report. (PDF)