oversight

The Miami Dade Housing Agency, Miami, Florida Did Not Ensure Section 8-Assisted Units Met Housing Quality Standards

Published by the Department of Housing and Urban Development, Office of Inspector General on 2005-12-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                Issue Date
                                                                        December 21, 2005
                                                                Audit Case Number
                                                                        2006-AT-1001




TO:          Karen Cato-Turner, Director, Office of Public Housing, 4DPH



FROM:
             James D. McKay
             Regional Inspector General for Audit, 4AGA

SUBJECT: The Miami Dade Housing Agency, Miami, Florida,
         Did Not Ensure Section 8-Assisted Units Met Housing Quality Standards


                                     HIGHLIGHTS

 What We Audited and Why

              As part of the Department of Housing and Urban Development (HUD), Office of
              the Inspector General’s (OIG) strategic plan, we conducted an audit of the Miami
              Dade Housing Agency’s (Agency) inspection of Section 8-assisted units under the
              Section 8 Housing Choice Voucher program. We selected the Agency for review
              based on risk factors associated with a Section 8 risk assessment. Our audit
              objective was to determine whether Section 8-assisted units met housing quality
              standards in accordance with HUD requirements.

 What We Found


              Our statistical sample of 120 Section 8 units found that 117 units did not meet
              minimum housing quality standards. Of the 117 units, 38 had significant housing
              quality standards violations. Projecting the results of the statistical sample to the
              population indicates at least 12,387 of the Agency’s 13,220 units did not meet
              minimum housing quality standards. Further, 3,265 units had significant housing
              quality standards violations. This occurred because Agency management did not


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           place sufficient emphasis on housing quality standards requirements and did not
           implement adequate internal controls. As a result, tenants lived in units that were
           not decent, safe, and sanitary, and HUD made housing assistance payments for
           units that did not meet standards. Based on the sample, we estimate that over the
           next year, HUD will pay housing assistance payments of more than $25.9 million
           for units with significant housing quality standards violations. In addition, we
           estimate that $7,300 in administrative fees should be reduced or offset.

What We Recommend


           We recommend that the director of the Office of Public Housing require the
           Agency to inspect all of the 117 Section 8 housing choice voucher-assisted units
           to verify that corrective actions were taken by the landlord and if not, to abate the
           rents or terminate the tenants’ vouchers. The director should also require the
           Agency to develop and implement an internal control plan and incorporate it into
           the Agency’s Section 8 administrative plan to ensure units meet housing quality
           standards and inspections meet HUD requirements to prevent an estimated $25.9
           million from being spent on units with significant violations. Further, HUD
           should reduce or offset $7,300 of the Agency’s administrative fees for the 38 units
           with significant housing quality standards violations.

Auditee’s Response


           We discussed our review results with the Agency and HUD officials during the
           audit. We provided the draft report to the Agency and HUD on
           November 15, 2005, for their comments and discussed the report with them at the
           exit conference on December 09, 2005. The Agency provided written comments
           on December 12, 2005. The Agency generally concurred with recommendation
           1A and 1B and has begun to take corrective action. The Agency agreed that
           housing quality standards violations did occur in the sampled units and some were
           significant. However, they disagreed with the methodology used and the
           conclusions of the audit. The Agency disagreed with recommendation 1C
           indicating no evidence of malfeasance or fraudulent behavior was found to
           warrant a reduction in fees.

           The complete text of the Agency’s response, along with our evaluation of that
           response, can be found in appendix B of this report. The Agency also provided
           attachments with its response that are available for review upon request.




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                                             2
HUD Management
Decisions

         Your December 19, 2005, memorandum indicated agreement with the findings
         and recommended corrective actions We have accepted HUD’s management
         decisions for each report recommendation and they will be recorded in the
         Departmental audit resolution tracking system upon report issuance. In
         accordance with HUD Handbook 2000.6, REV-3, please advise the audit liaison
         officer when all final actions have been completed. Also, please furnish us
         copies of any correspondence or directives issued because of the audit.




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                                       3
                             TABLE OF CONTENTS

Background and Objectives                                                      5

Results of Audit
        Finding 1: Section 8 Units Did Not Meet Housing Quality Standards      6

Scope and Methodology                                                          15

Internal Controls                                                              18

Appendixes
   A.   Schedule of Questioned Costs and Funds to Be Put to Better Use         19
   B.   Auditee Comments and OIG’s Evaluation                                  20
   C.   Criteria                                                               31
   D.   Table of Units with Significant Housing Quality Standards Violations   33




                                              4
                     BACKGROUND AND OBJECTIVES

The Miami Dade Housing Agency (Agency) is a department of Miami-Dade County, Florida.
The Agency reports directly to the county manager, who reports to the mayor and 13-member
board of county commissioners. Its primary objective is to provide low- and moderate-income
residents with quality affordable housing opportunities. The Agency administers approximately
13,220 housing choice vouchers. The annual housing assistance payments for fiscal year 2004
were more than $103 million.

Our audit objective was to determine whether Section 8-assisted units met housing quality
standards in accordance with U.S. Department of Housing and Urban Development (HUD)
requirements.




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                                              5
                              RESULTS OF AUDIT

Finding 1: Section 8 Units Did Not Meet Housing Quality Standards
Our inspection of 120 units showed that 117 units did not meet minimum housing quality
standards. Of the 117 units not meeting standards, 38 had significant housing quality standards
violations. Projecting the results of the statistical sample to the population indicates at least
12,387 of the Agency’s 13,220 units did not meet minimum housing quality standards. Further,
3,265 units had significant housing quality standards violations. This occurred because Agency
management did not place sufficient emphasis on housing quality standards requirements and did
not implement adequate internal controls. As a result, tenants lived in units that were not decent,
safe, and sanitary, and HUD made housing assistance payments for units that did not meet
standards. Based on the sample, we estimate that over the next year, HUD will pay housing
assistance payments of more than $25.9 million for units with significant housing quality
standards violations. In addition, we estimate that $7,300 in administrative fees should be
reduced or offset.



 Units Had Significant Housing
 Quality Standards Violations


               We estimate that over the next year, HUD will pay housing assistance payments
               of more than $25.9 million for units with significant housing quality standards
               violations if the Agency does not institute better controls. We inspected a
               statistical sample of 120 units with an OIG housing inspector and the Agency’s
               inspectors. We found that 117 units failed to meet minimum housing quality
               standards. Additionally, 38 of the 117 units had significant housing quality
               standards violations. Appendix D provides details on the 38 units. The following
               table lists the most frequently occurring and serious violations.

                                                          Number of units      Percentage
                       Type of violation     Frequency     with violation        of units
                    Electrical hazards          114              31                 82
                    Security                     60              29                 76
                    Ventilation                  52              28                 74
                    Water heater                 43              30                 79
                    Sewer                         5               5                 13

               The Agency either did not identify many of the violations from our inspections or
               did identify violations but reported them as having been corrected. We believe
               the violations existed when the Agency conducted their most recent inspection.


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      Safety Hazards

      The most predominant violation was electrical hazards, including exposed wiring,
      improper installation of electrical wires, and the use of extension cords as
      permanent wiring. On August 30, 2005, we found exposed electrical wires to an
      air conditioner unit. The Agency did not report this violation during its inspection
      on August 15, 2005. Other safety hazards include security issues such as missing
      door locks, excessive damage to exterior doors, and unsecured windows.




           Exposed electrical wires




           Exterior door missing door lock



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        Ventilation

        We found several violations involving the air conditioner unit not being properly
        sealed, resulting in exposed ceilings and unsecured windows. Other violations
        involved leaking air conditioner units.




             Window unit not properly sealed




             Inoperative drain pump line



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                                         8
       Water Heater

       We also found several units containing a water heater with a pressure relief valve
       that did not fully discharge to a safe place of disposal. In addition, the water
       heater in one unit did not have a pressure relief valve. We inspected this unit on
       August 29, 2005. The Agency passed the unit on August 4, 2005. The tenant said
       the Agency inspector never looked at the water heater. In other units, the water
       heater was so severely corroded that it needed to be replaced.




            Missing pressure relief valve




            Missing pressure relief drain line



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            Corroded water heater

       Health Hazards

       Our inspections disclosed sewer leaks due to an improperly sealed toilet, an
       uncovered septic tank, and washing machines not properly connected to a sewer
       line. These violations pose health hazards to the tenants in these units. We



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       inspected a unit on August 24, 2005, and found a sewer leak caused by an
       improperly sealed toilet. The Agency conducted an inspection on
       August 15, 2005, without reporting this violation.




            Unsecured toilet




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                  Washer not properly connected to a sewer line; water drained to backyard

The Agency Did Not Have
Adequate Internal
Controls


           The Agency’s management did not place sufficient emphasis on housing quality
           standards requirements. Management failed to implement an effective internal
           control plan that ensured units met minimum housing quality standards and
           inspections complied with requirements.

           The Agency’s internal control plan should include written policies and procedures
           that provide detailed daily guidance and a quality control plan that ensures
           policies and procedures are followed. The internal control plan, at a minimum,
           should provide guidance on how to properly conduct inspections to meet housing
           quality standards and identify corrective measures for inspectors who perform



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                                           12
           poorly (i.e., training or disciplinary action). The plan must be sufficient to ensure
           the Agency complies with HUD regulations and other requirements.

           An Agency official stated that the quality of the inspections was sacrificed due to
           the volume of inspections. The Agency reported that in fiscal year 2005, 13
           inspectors were responsible for inspecting about 18,500 Section 8 units, resulting
           in 38,200 scheduled inspections. The inspection staff was responsible for all
           inspections, reinspections, emergency and complaint inspections, and the delivery
           of violation notices to landlords. Despite the volume of inspections, the Agency
           did not perform an analysis to determine whether it employed adequate inspection
           staff to perform all required inspections to a level that ensured violations were
           identified.

           According to the Agency’s Section 8 administrative plan, quality control
           inspections will be conducted to ensure that inspections are in conformance with
           housing quality standards, to verify the accuracy and efficiency of inspection
           personnel, and to monitor and document program performance. The plan also
           states that quality control inspections will re-inspect a minimum of 5 percent of
           the total units inspected each month. The Agency did not meet this 5 percent goal
           in fiscal year 2005 and only performed inspections in that fiscal year from
           October through December 2004 and September 2005. Without performing
           regular inspections throughout the year, the Agency cannot identify issues as they
           arise. Also, as shown by the results in this finding, the quality control inspections
           that were completed did not identify the deficiencies in the inspection process.
           Had the Agency developed and implemented specific written procedures to meet
           these objectives, it could have effectively accomplished its 5 percent inspection
           goal and would have been able to identify deficiencies and implement corrective
           actions to prevent further violations.

           In addition to not meeting its goal in the administrative plan, the Agency did not
           conduct the number of quality control inspections required by HUD. According
           to the HUD Section 8 Management Assessment Program, the Agency was
           required to conduct 89 quality control inspections for fiscal year 2005. It only
           conducted 62.

The Agency Has Begun to
Take Corrective Actions


           The Agency has requested landlords and tenants to correct deficiencies on the 117
           units, and inspectors have conducted reinspections. Agency management has
           begun to randomly review inspection results each week and has required
           inspectors to report when inspections were started and completed.



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Conclusion

          Because Agency management did not place sufficient emphasis on housing
          quality standards requirements and did not implement adequate internal controls,
          HUD made housing assistance payments and provided administrative fees to the
          Agency for units that did not meet standards. The Agency did not maintain
          adequate controls to ensure that inspections meet HUD requirements. It
          conducted quality control inspections, but it did not use them as a tool to enhance
          inspector performance and identify whether inspections were performed properly.
          While the Agency has made some improvements, additional improvements are
          needed. Management must emphasize the importance of housing quality
          standards and implement policies and procedures that ensures it complies with
          HUD requirements and gives tenants the opportunity to live in decent, safe, and
          sanitary conditions. By continuing to make necessary improvements, the Agency
          will ensure that at least $25.9 million in Section 8 funds are put to better use.

          In addition, HUD provided the Agency with administrative fees to perform
          administrative duties under the Section 8 program. Based on our results, the
          Agency failed to adequately perform its administrative duties in that Section 8
          units did not meet housing quality standards. Accordingly, we believe the
          administrative fee associated with 38 units should be reduced or offset. We
          generally computed the administrative fee for the 38 units with significant
          violations from the date of the most recent Agency annual inspection to the date
          of our inspection. We estimate that $7,300 in administrative fees should be
          reduced or offset.


Recommendations

          We recommend that the director of the Office of Public Housing require the
          Agency to

          1A. Inspect the 117 Section 8 housing choice voucher-assisted units to verify
              that corrective actions were taken by the landlord and if not, to abate the
              rents or terminate the tenants’ vouchers.

          1B. Develop and implement an internal control plan and incorporate it into the
              Agency’s Section 8 administrative plan to ensure units meet housing quality
              standards and inspections meet HUD requirements to prevent an estimated
              $25.9 million from being spent on units with significant violations.

          1C. Reduce or offset $7,300 in the Section 8 administrative fees for the 38 units
              with significant housing quality standards violations.



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                        SCOPE AND METHODOLOGY

Our audit objective was to determine whether Section 8-assisted units met housing quality
standards in accordance with HUD requirements. To accomplish our audit objective, we

    • Reviewed applicable laws, regulations, and other HUD program requirements.

    • Reviewed the Agency’s Section 8 policies and procedures and administrative plan.

    • Interviewed HUD and Agency program staff.

    • Reviewed the Agency’s latest independent public accountant report and HUD program
      monitoring reviews,

    • Obtained a download of the Agency’s Section 8 housing stock for the Housing Choice
      Voucher program as of March 2005. We then performed limited tests of the reliability of
      the data, such as the tenant information, housing assistance payments, and inspection
      results. Based on the tests, we assessed the data as sufficiently reliable, given our
      objective and intended use.

    • Selected a statistical sample of units for inspection from the Agency’s Section 8 housing
      stock for the Housing Choice Voucher program as of March 2005.

    • Reviewed previous Agency inspection reports.

    • Inspected 120 units with an OIG housing inspector and Agency inspectors to determine
      whether the units met housing quality standards. We performed the inspections
      April 11-15, 2005, and August 15-September 22, 2005.

HUD provided the Agency with administrative fees to perform administrative duties under the
Section 8 program. Based on our audit results, we believe the Agency failed to adequately
perform its administrative duties, and the administrative fee associated with 38 units should be
reduced or offset. We generally computed the administrative fee for the 38 units with significant
violations from the date of the most recent Agency annual inspection to the date of our
inspection. We computed the administrative fee to be $14,601, which is 100 percent of the
administrative fee for the 38 units in the months between the Agency inspection and our
inspections. To be conservative, we estimate that $7,300 (50 percent) should be reduced or
offset since the Agency also used the $14,601 for other administrative purposes.




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                                               15
Statistical Sample Selection
and Methodology



            The download of the Agency’s Section 8 housing stock for the Housing Choice
            Voucher program resulted in 13,220 active units. We used a Microsoft Excel
            spreadsheet designed to calculate sample sizes. Based on a confidence level of 90
            percent, a precision level of 7.3 percent, and an assumed error rate of 39 percent,
            the spreadsheet returned a sample size of 120 units. We then used the Defense
            Contract Audit Agency’s EZ-Quant software to select a simple random statistical
            sample of 120 from the 13,220 units. We also used the software to generate 50
            additional samples for replacements if we could not gain access to a unit. We
            used statistical sampling because each sampling unit is selected without bias from
            the audit population, thereby allowing the results to be projected to the
            population.

            Projecting the results of the 117 failed units in our statistical sample to the
            population yields the following:

            •   The lower limit is 93.7 percent * 13,220 units = 12,387 units not meeting
                housing quality standards.
            •   The point estimate is 97.5 percent * 13,220 units = 12,890 units not meeting
                housing quality standards.
            •   The upper limit is 99.3 percent * 13,220 units = 13,127 units not meeting
                housing quality standards.

            Of the 117 failed units, we determined that 38 units have significant housing
            quality standards violations. We defined these units as being in extremely poor
            condition, resulting from (1) a deficiency that existed for an extended period of
            time, (2) a deficiency noted in a prior inspection but not corrected, and/or
            (3) deferred maintenance that consistently fails the unit. We based our
            assessment on prior Agency inspection reports, tenant comments, and our
            observation and judgment of the condition of the unit during the inspection.

            Projecting the results of the 38 units that have significant housing quality
            standards violations to the population yields the following:

            •   The lower limit is 24.7 percent * 13,220 units = 3,265 units with significant
                housing quality standards violations.
            •   The point estimate is 31.7 percent * 13,220 units = 4,187 units with
                significant housing quality standards violations.
            •   The upper limit is 39.3 percent * 13,220 units = 5,195 units with significant
                housing quality standards violations.



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                                              16
      To be conservative, we used the lower limit to project to the population.

      Using the lower limit and the average annual housing assistance payment for our
      audit period, we estimated the Agency spent at least $25,971,988 for 3,265 units
      with significant housing quality standards violations. The estimate is not a
      statistical projection and is used only for determining funds that can be put to
      better use.

      We conducted our fieldwork from March through October 2005 at the Agency’s
      offices in Miami, Florida. Our audit period was from October 1, 2003, through
      February 28, 2005. We expanded our audit period as needed to accomplish our
      objective.

      We conducted the audit in accordance with generally accepted government
      auditing standards.




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                                      17
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance 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 the plan of organization, methods, and procedures adopted by
management to meet its missions, goals, and objectives. Internal controls include the processes
for planning, organizing, directing, and controlling program operations. They include the
systems for measuring, reporting, and monitoring program performance. Internal controls also
serve as the first line of defense in safeguarding assets and preventing and detecting errors;
fraud; and violations of laws, regulations, and provisions of contracts and grant agreements.



 Relevant Internal Controls


              We determined the following internal controls were relevant to our audit objective.

                   ƒ   Controls over program operations
                   ƒ   Controls over the validity and reliability of data
                   ƒ   Controls over compliance with laws and regulations
                   ƒ   Controls over the safeguarding of resources

              A significant weakness exists if the internal controls do not provide reasonable
              assurance that housing units meet housing quality standards in accordance with
              HUD requirements.


 Significant Weaknesses

              Based on our review, we believe that the following item was a significant
              weakness:

                   ƒ   The Agency did not have adequate internal controls to ensure that Section
                       8 units met housing quality standards. (see finding 1)




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                                               18
                                       APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS
                AND FUNDS TO BE PUT TO BETTER USE


             Recommendation               Questioned costs:           Funds to be put
                 number                     ineligible 1               to better use 2
                   1B                                                  $25,971,988
                   1C                           $7,300

                    Total                       $7,300                 $25,971,988



1/     Questioned costs include ineligible costs, unsupported costs, and
       unnecessary/unreasonable costs. Ineligible costs are defined as those costs that are
       questioned because of an alleged violation of a provision of a law, regulation, contract,
       grant, cooperative agreement, or other agreement or document governing the expenditure
       of funds.

2/     “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 at a later time
       for the activities in question. This includes costs not incurred, reductions in outlays,
       avoidance of unnecessary expenditures, de-obligation of funds, withdrawal of interest,
       loans and guarantees not made, and other savings.




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Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




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                         20
Comment 1




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                    21
Comment 2




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                    22
Comment 3




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                       23
Comment 4



Comment 5




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                       24
Comment 6




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                         25
Comment 7




Comment 8




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                        26
                        OIG Evaluation of Auditee Comments



            Date of OIG Inspection Compared to Date of MDHA’s Most Recent Inspection

Comment 1   The Agency commented that there are significant gaps of time between the
            inspection they conducted and our inspection. They cited HUD regulations for
            housing quality standards quality control inspections, which stipulate that the
            reinspected sample is to be drawn from recently completed housing quality
            standards inspections performed during the three months preceding reinspection.
            We did not use the methodology cited in the HUD regulations because the
            objective of our review is different than the Agency when they perform quality
            control reinspections. For our objective, we chose to use statistical sampling to
            ensure that inspection results were representative of the Agency’s Section 8
            housing choice voucher stock. This methodology allows each sampling unit to
            be selected without bias from the audit population. To select only recent
            inspections would no longer make the sample statistically valid.

            The Agency stated that in the months between OIG and their inspections,
            changes in the physical condition of a unit may and probably have occurred. We
            recognize that our inspection results reflect a snapshot of the conditions of a unit
            at a particular point in time. However, 24 CFR 982.401(a)(3) requires that all
            program housing meet the housing quality standards performance requirements
            both at commencement of assisted occupancy, and throughout the assisted
            tenancy.

            The Agency stated that two hurricanes caused widespread damage to units that
            did not have pre-existing violations. During our inspections, we distinguished
            between those violations related to hurricane damage. In addition, we excluded
            those damages in our determination on whether a unit failed with significant
            violations.

            Assumption that HQS Violations Would Not Have Been Corrected Within
            USHUD Prescribed Timeframes

Comment 2   The Agency stated that the OIG conclusion that 117 of the 120 inspected units
            did not meet minimum housing quality standards is an assumption without
            consideration that MDHA acted or would act in accordance with HUD
            regulations and allow the landlord or family time to cure the violations. The
            Agency also commented that the audit report did not specify the number of OIG




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                                            27
            inspected units that subsequently passed a compliance inspection or were abated.

            We disagree that our conclusion is an assumption. Our conclusion was based on
            the factual results of our inspections. We also did not state that the Agency
            would not ensure the future compliance of the unit in accordance with
            regulations. Furthermore, our audit objective was to determine whether Section
            8-assisted units met housing quality standards in accordance with HUD
            requirements and not to verify or determine whether the Agency complied with
            abatement and termination policies and procedures.

            Types of Violations Cited by the OIG

Comment 3   The Agency acknowledged and generally concurred with most of our concerns
            regarding electrical hazards, security, ventilation, and sewer violations. The
            Agency disagreed with our violations related to the water heater’s pressure relief
            valve. They mentioned that a County building official informed OIG and the
            Agency that there is no problem in using an approved conduit to reduce the
            pressure relief line to ½ inch for existing construction when expelled to the
            exterior of the property. Our recollection of the meeting with the County
            building official was that the County would not approve a relief valve to go from
            ¾ inch to ½ inch. The County will not require the owner to change all plumbing
            in old buildings. However, the relief valve should discharge full size to the floor
            to meet County building code requirements. If the Agency is to adopt County
            building code requirements for water heaters, we recommend that clarification
            be obtained from the County on this matter.

            Applying the Flawed Sample Results to the Entire MDHA Portfolio

Comment 4   The Agency stated that the OIG report asserts that violations occurred
            historically and were systematically ignored. The Agency disputes this
            allegation. We compared our inspections with Agency inspections to determine
            whether violations had been previously identified. We found that certain
            violations identified by the Agency were later signed off as being corrected
            when our inspection of the unit revealed that the violation was still present. In
            addition, we did not indicate that the Agency systematically ignored violations.




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Comment 5   The Agency disagrees with our projected results, the $25.9 million in housing
            assistance payments issued for units not passing housing quality standards, and
            $7,300 in administrative fees that should be reduced or offset. As indicated
            above, we used statistical sampling that allows our audit results to be projected
            to the population. To be conservative, we used the lower limit to determine our
            projected results. The $25.9 million in housing assistance payments is an
            estimate and not a statistical projection and is used only for the purpose of
            determining the annual amount of Section 8 funds that could be put to better use
            if the Agency implements the suggested recommendations. We also maintain
            that the Agency failed to adequately perform its administrative duties in that
            Section 8 units did not meet housing quality standards. Accordingly, we believe
            the $7,300 in administrative fees associated with the 38 units with significant
            housing quality standards violations should be reduced or offset.

            The Agency also stated that assumptions should not be made regarding future
            Section 8 funds not being put to good use without fairly looking at their
            enforcement of housing quality standards requirements through abatement or
            termination of HAP contracts. As indicated above, our audit objective was to
            determine whether Section 8-assisted units met housing quality standards in
            accordance with HUD requirements and not to verify or determine whether the
            Agency complied with abatement and termination policies and procedures.

            Internal Controls

Comment 6   The Agency concurred with recommendation 1B and has begun to take
            corrective action.

            OIG Recommendations

Comment 7   The Agency concurred with recommendation 1A and has begun to take
            corrective action.

Comment 8   The Agency disagreed with recommendation 1C and stated that no evidence of
            malfeasance or fraudulent behavior was found to warrant a reduction in fees.
            The Agency also commented that the fees support all aspects of the Section 8




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        operations. According to 24 CFR 982.152(d), HUD may reduce or offset any
        administrative fee to the public housing authority if it fails to perform its
        administrative responsibilities correctly or adequately under the program, such
        as failure to enforce housing quality standards requirements. We maintain that
        the Agency failed to adequately perform its administrative duties in not ensuring
        Section 8 units met housing quality standards. In addition, to be conservative,
        we estimate that $7,300 or 50 percent in Section 8 administrative fees for the 38
        units should be reduced or offset since the Agency used the fees for other
        administrative purposes.




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Appendix C


                                          CRITERIA

24 CFR [Code of Federal Regulations] 982.52(a) requires the public housing authority to
comply with HUD regulations and other HUD requirements for the program.

24 CFR 982.54(a) and (d)(22) require the public housing authority to adopt a written
administrative plan that establishes local policies for administration of the program in accordance
with HUD requirements. The public housing authority must administer the program in
accordance with the PHA administrative plan. Among other subjects, the plan must include
procedural guidelines and performance standards for conducting required HQS inspections.

24 CFR 982.401(a)(3) states that all program housing must meet the housing quality standards
performance requirements both at commencement of assisted occupancy and throughout the
assisted tenancy.

24 CFR 982.152(d) states that HUD may reduce or offset any administrative fee to the public
housing authority if it fails to perform its administrative responsibilities correctly or adequately
under the program (such as failure to enforce housing quality standards requirements).

24 CFR 982.405(b) requires the public housing authority to conduct supervisory quality control
housing quality standards inspections.

HUD Housing Choice Voucher Guidebook. Chapter 10.9 of the guidebook provides that
Indicator 5, “HQS Quality Control Inspections,” of the Section 8 Management Assessment
Program requires a public housing authority supervisor or other qualified person to re-inspect a
sample of units under contract during the last fiscal year. If the number of units under contract
exceeds 2,000, the minimum number of units to be sampled is 30 plus 1 for each 200 (or part of
200) over 2,000. This is also stated in 24 CFR 985.2 and 24 CFR 985.3 (e).

Agency Section 8 Administrative Plan: Purpose. One of the objectives of the plan is to
provide decent, safe, and sanitary housing for eligible program participants.

Agency Section 8 Administrative Plan: Housing Quality Standards and Inspections.
Quality control inspections are conducted to ensure that inspections are in conformance with
housing quality standards, to verify the accuracy and efficiency of inspection personnel, and to
monitor and document program performance. It is the intent that these inspections and the
keeping of records will assist in identification and prevention of repeat violations. In addition,




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quality control inspections will re-inspect a minimum of 5 percent of the total units inspected
each month. The number of units selected for quality control inspections is based on the total
number of approved Section 8 certificate and housing vouchers. The selection is done randomly
by the quality control inspector, using a computer listing of all scheduled annual inspections.




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Appendix D

 TABLE OF UNITS WITH SIGNIFICANT HOUSING QUALITY
              STANDARDS VIOLATIONS

                                        Types of violation**
                    Electrical                  Air            Water
     #   Sample #    hazard      Security    conditioner       heater   Sewer
     1       1          7           1            2               3        0
     2       6          1           1            0               1        0
     3      11         11           2            3               2        0
     4      13          4           1            0               1        0
     5      17          7           0            1               1        0
     6      21          4           3            3               1        0
     7      24          2           2            4               0        0
     8      29          4           4            1               4        0
     9      33          2           1            0               1        0
    10      39          0           0            1               1        0
    11      41          3           2            0               3        0
    12      42          3           0            1               1        1
    13      44          0           1            1               1        0
    14      45          7           1            2               1        0
    15      60          3           2            3               0        0
    16      62          4           0            1               1        0
    17      68          2           3            2               2        0
    18      71          3           4            2               0        0
    19      73          2           2            2               0        0
    20      74          0           1            1               1        0
    21      77          2           2            1               1        0
    22      78          0           0            0               1        0
    23      85          0           0            1               1        0
    24      86          5           0            0               1        0
    25      90          4           0            0               2        0
    26      98          2           5            3               1        0
    27      99          4           2            3               0        1
    28     102          0           1            0               1        1
    29     104         10           0            2               0        0
    30     106          1           1            2               1        0
    31     111          2           3            2               1        0
    32     113          6           2            0               0        0
    33     122          3           1            2               2        1
    34     126          0           1            0               2        0




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                                               Types of violation**
                      Electrical                         Air          Water
   #     Sample #       hazard         Security     Conditioner       heater        Sewer
  35       129             3               6              1             1              0
  36       144             1               1              1             2              0
  37       152             1               3              1             0              0
  38       154             1               1              3             1              1
        Total            114               60            52             43             5
** The table does not indicate all violations we found in the unit. We only included the most
     frequently occurring and serious violations.




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