oversight

The Lake Metropolitan Housing Authority, Painesville, Ohio, Did Not Always Ensure That Section 8 Units Met HUD's Housing Quality Standards

Published by the Department of Housing and Urban Development, Office of Inspector General on 2009-10-28.

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

                                                                  Issue Date
                                                                           October 28, 2009
                                                                  Audit Report Number
                                                                           2010-CH-1001




TO:         Thomas S. Marshall, Director of Public Housing Hub, 5DPH


FROM:       Heath Wolfe, Regional Inspector General for Audit, 5AGA

SUBJECT: The Lake Metropolitan Housing Authority, Painesville, Ohio, Did Not Always
           Ensure That Section 8 Units Met HUD’s Housing Quality Standards

                                    HIGHLIGHTS

 What We Audited and Why

             We audited the Lake Metropolitan Housing Authority’s (Authority) Section 8
             Housing Choice Voucher program (program). The Authority was selected for
             audit based upon a congressional request from the Honorable Steven C.
             LaTourette. Our objective was to determine whether the Authority administered
             its program in accordance with the U.S. Department of Housing and Urban
             Development’s (HUD) requirements and its program administrative plan
             regarding the enforcement of housing quality standards. This is the second of
             multiple audit reports that may be issued regarding the Authority’s program.


 What We Found

             The Authority’s program administration regarding housing unit conditions was
             inadequate. Of the 53 housing units statistically selected for inspection that did
             not receive a quality control inspection by the Authority, 51 did not meet HUD’s
             housing quality standards, and 38 had exigent health and safety violations that
             existed at the time of the Authority’s previous inspections. As a result, more than
             $42,000 in program funds was spent on units that were not decent, safe, and
             sanitary. The Authority also received nearly $5,000 in inappropriate program
             administrative fees. Based on our statistical sample, we estimate that over the

                                              1
           next year, HUD will pay more than $903,000 in housing assistance for units with
           housing quality standards violations that had not received a quality control
           inspection.

           Further, of the 27 housing units that received a quality control inspection by the
           Authority, 26 did not meet HUD’s housing quality standards, and 15 had exigent
           health and safety violations that existed at the time of the Authority’s previous
           inspections. As a result, more than $39,000 in program funds was spent on units
           that were not decent, safe, and sanitary. The Authority also received nearly
           $4,000 in inappropriate program administrative fees.

           We informed the Authority’s executive director and the Director of HUD’s
           Cleveland Office of Public Housing of minor deficiencies through a
           memorandum, dated September 23, 2009.

What We Recommend

           We recommend that the Director of HUD’s Cleveland Office of Public Housing
           require the Authority to reimburse its program from nonfederal funds for the
           improper use of more than $81,000 in program funds and implement adequate
           procedures and controls to address the finding cited in this audit report. These
           procedures and controls should help to ensure that more than $903,000 in
           program funds is spent on housing units that meet HUD’s requirements.

           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 issued because of the audit.


Auditee’s Response

           We provided our inspection review results and supporting schedules to the
           Director of HUD’s Cleveland Office of Public Housing and the Authority’s chief
           executive officer during the audit. We also provided our discussion draft audit
           report to the Authority’s executive director, its board chairman, and HUD’s staff
           during the audit. We held an exit conference with the Authority’s executive
           director on September 23, 2009.

           We asked the Authority’s executive director to provide comments on our
           discussion draft audit report by September 28, 2009. The Authority’s executive
           director provided written comments, dated September 28, 2009. The Authority
           disagreed with our findings and recommendations. The complete text of the
           written comments, along with our evaluation of that response, can be found in
           appendix B of this report.



                                            2
                           TABLE OF CONTENTS

Background and Objective                                                   4

Results of Audit
      Finding: Controls over Housing Quality Standards Were Inadequate     5

Scope and Methodology                                                     18

Internal Controls                                                         20

Appendixes
   A. Schedule of Questioned Costs and Funds to Be Put to Better Use      22
   B. Auditee Comments and OIG’s Evaluation                               23
   C. HUD’s Regulations and the Authority’s Program Administrative Plan   50




                                           3
                       BACKGROUND AND OBJECTIVE

The Lake Metropolitan Housing Authority (Authority) was created in October 1965 pursuant to
Section 3735.01 of the Ohio Revised Code to provide safe and sanitary housing to low-income
families. In 1977, the Authority began administering federal housing programs, beginning with
the Section 8 rental housing assistance program. The Authority’s jurisdiction was expanded to
include all of Lake County, Ohio, in 1982. The Authority is a political subdivision of the State
of Ohio and is governed by a seven-member board of commissioners appointed for five-year
terms by local elected officials. The Authority’s executive director is appointed by the board of
commissioners and is responsible for coordinating established policy and carrying out the
Authority’s day-to-day operations.

The Authority administers its Section 8 Housing Choice Voucher program (program) funded by
the U.S. Department of Housing and Urban Development (HUD). It provides assistance to low-
and moderate-income individuals seeking decent, safe, and sanitary housing by subsidizing rents
with owners of existing private housing. As of June 1, 2009, the Authority had 1,381 units under
contract with annual housing assistance payments totaling more than $8.8 million in program
funds.

The Authority certified to troubled status on its Section Eight Management Assessment Program
rating for the fiscal year ending June 30, 2008. As a result, HUD performed an on-site
confirmatory review in February 2009 to assess the magnitude and seriousness of the Authority’s
noncompliance with program performance requirements. HUD and the Authority executed a
corrective action plan, effective February 2009, to correct the deficiencies cited in the
confirmatory review. This audit addressed areas that were not covered by the corrective action
plan.

Our objective was to determine whether the Authority administered its program in accordance
with HUD’s requirements to include determining whether (1) the Authority’s inspections were
sufficient to detect housing quality standards violations and provide decent, safe, and sanitary
housing to its residents and (2) the Authority conducted adequate quality control unit inspections
to detect housing quality standards violations. This is the second of three planned audit reports
regarding the Authority’s program (see report number 2009-CH-1012, issued on August 14,
2009).




                                                 4
                                 RESULTS OF AUDIT

Finding: Controls over Housing Quality Standards Were Inadequate
The Authority did not adequately enforce HUD’s housing quality standards. Of the 80 program
units statistically selected for inspection (53 non–quality control and 27 quality control), 77 did
not meet minimum housing quality standards, and 53 had material violations that existed before
the Authority’s previous inspections. The violations occurred because the Authority lacked
adequate procedures and controls to ensure that the inspections performed were adequate. As a
result, more than $81,000 in program funds was spent on units that were not decent, safe, and
sanitary. We estimate that over the next year, the Authority will pay more than $903,000 in
housing assistance for units with housing quality standards violations.


 HUD’s Housing Quality
 Standards Not Met for Non–
 Quality Control Unit
 Inspections

               From the 236 program units that passed the Authority’s inspections performed
               between March 16 and June 16, 2009, we statistically selected 53 units for
               inspection by using data mining software. We did not include units that received a
               quality control inspection.  The 53 units were inspected to determine whether the
               Authority ensured that its program units met HUD’s housing quality standards. Our
               appraiser inspected the 53 units between July 14 and July 29, 2009.

               Of the 53 units inspected, 51 (96 percent) had a total of 284 housing quality
               standards violations. In addition, 38 units were considered to be in material
               noncompliance since they had one or more exigent health and safety violations that
               predated the Authority’s previous inspections. The following table categorizes the
               284 housing quality standards violations in the 51 units.




                                                 5
                                 Non–quality control unit inspections
                                                            Number of     Number of
                            Category of violations          violations      units
                      Electrical                               65             40
                      Security                                 41             24
                      Toilet/wash basin                        22             13
                      Window                                   17             11
                      Heating equipment                        15             12
                      Wall                                     15             13
                      Other interior hazards                   11             6
                      Site and neighborhood conditions         10             6
                      Stairs, rails, and porches               10             6
                      Tub or shower in unit                    10             7
                      Ceiling                                   9             8
                      Exterior surface                          8             5
                      Other hazards                             8             6
                      Range/refrigerator                        8             6
                      Roof/gutters/chimney                      7             6
                      Smoke detectors                           7             7
                      Water heater                              6             6
                      Plumbing/sewer/water supply               5             3
                      Floor                                     4             3
                      Sinks                                     3             3
                      Interior stairs and common halls          2             2
                      Evidence of infestation                   1             1
                                       Total                   284


Electrical Violations for Non–
Quality Control Inspections

            Sixty-five electrical violations were present in 40 of the Authority’s program units
            inspected. The following items are examples of electrical violations listed in the
            table: exposed fuse box connections, exposed electrical contacts, and missing
            outlet cover plates. The following pictures are examples of the electrical-related
            violations.




                                             6
Unit 31: Exposed wiring
in a junction box on the
furnace because of a
missing safety plate.




Unit 8: One of thirteen
outlets missing a cover
plate in the garage. A
child under the age of
eight resided in this unit.




Security Violations for Non–
Quality Control Unit
Inspections


                 Forty-one security violations were present in 24 of the Authority’s program units
                 inspected. The following items are examples of security violations listed in the
                 table: damaged door frames on entrance doors and damaged locks on entrance
                 doors. The following pictures are examples of the security-related violations.

                                                  7
Unit 43: Security door
frame split, damaged,
insecure, and missing a
striker plate.




Unit 20: Damaged door
striker on main entry
door into building,
causing improper door
lock operation.




                          8
Wall Violations for Non–
Quality Control Inspections

                Fifteen wall violations were present in 13 of the Authority’s program units
                inspected. The following items are examples of wall violations listed in the table:
                handrails not secured to wall, mold on walls, and cracks in the walls. The
                following pictures are examples of the wall-related violations.

Unit 22: Damaged wall
due to insecure handrail
at second floor stairs.




Unit 11: Mold
protruding from wall
through paint and peeling
in bathroom.




                                                 9
HUD’s Housing Quality
Standards Not Met for Quality
Control Inspections

           From the 27 program units that received a quality control inspection performed by
           the Authority in February 2009, we inspected 100 percent of the units.  The 27 units
           were inspected to determine whether the Authority conducted adequate quality
           control unit inspections to detect housing quality standards violations. Our appraiser
           inspected the 27 units between July 14 and July 29, 2009.

           Of the 27 units inspected, 26 (96 percent) had a total of 175 housing quality
           standards violations. In addition, 15 units were considered to be in material
           noncompliance since they had one or more exigent health and safety violations that
           predated the Authority’s previous inspections. The following table categorizes the
           175 housing quality standards violations in the 26 units.

                                  Quality control unit inspections
                                                             Number of     Number of
                            Category of violations           violations      units
                     Security                                   37             17
                     Electrical                                 31             17
                     Window                                     19             13
                     Tub or shower in unit                      16             11
                     Toilet/wash basin                          13             9
                     Wall                                       11             8
                     Ceiling                                    10             8
                     Heating equipment                           6             6
                     Range/refrigerator                          6             5
                     Floor                                       5             4
                     Smoke detectors                             4             4
                     Roof/gutters/chimney                        3             3
                     Sinks                                       3             3
                     Exterior surface                            2             2
                     Interior stairs and common halls            2             2
                     Other interior hazards                      2             2
                     Other hazards                               1             1
                     Plumbing/sewer/water supply                 1             1
                     Site and neighborhood conditions            1             1
                     Stairs, rails, and porches                  1             1
                     Water heater                                1             1
                                      Total                     175




                                             10
Security Violations for Quality
Control Inspections

                Thirty-seven security violations were present in 17 of the Authority’s program
                units inspected. The following items are examples of security violations listed in
                the table: damaged door frames on entrance doors, damaged locks, and missing
                strike plates. The following pictures are examples of the security-related
                violations.

Unit 35: Main entry
door frame severely
damaged and missing
strike plate, allowing
door to be insecure.




                                                11
Unit 36: Entrance door
off kitchen with severely
damaged and split door
frame and missing a
strike plate. Children
under the age of eight
resided in this unit.




Electrical Violations for Quality
Control Inspections

                Thirty-one electrical violations were present in 17 of the Authority’s program
                units inspected. The following items are examples of electrical violations listed in
                the table: exposed fuse box connections, exposed electrical contacts, and lights
                not secured. The following pictures are examples of the electrical-related
                violations.




                                                 12
Unit 03: Electric panel cover
missing and lying on the floor. A
child under the age of seven
resided in this unit.




 Unit 66: Light in the
 basement not properly
 secured, exposing
 wiring.




                                    13
Wall Violations for Quality
Control Inspections

                Eleven wall violations were present in eight of the Authority’s program units
                inspected. The following items are examples of wall violations listed in the table:
                handrails not secured, mold on walls, and holes in walls. The following pictures
                are examples of the wall-related violations.
Unit 09: Damaged wall
at second floor stairs due
to loose and insecure
handrail.




Unit 56: Buildup of
mold on the drywall
above the tub. Children
under the age of 12
reside in the unit.




                                                14
Weaknesses in the Authority’s
Procedures and Controls over
Its Inspections

             The Authority lacked adequate procedures and controls to ensure that program
             units met HUD’s requirements. The overall quality of the inspections performed
             by the Authority’s contractors was not in accordance with HUD’s housing quality
             standards. Housing quality standards were not interpreted correctly by the
             Authority’s inspectors and as a result, were not applied appropriately and
             correctly by the inspectors. Therefore, the Authority did not determine during its
             inspections whether program units complied with HUD’s housing quality
             standards. The Authority also lacked an effective quality control inspection
             process. It did not verify that its inspectors conducted accurate and complete
             inspections, and as evidenced by this finding, the quality control inspections were
             not adequate.

             The Authority also failed to exercise proper supervision and oversight of its
             program inspections and did not follow its program administrative plan for quality
             control inspections. The plan requires a housing Authority supervisor or other
             qualified person to conduct quality control inspections of a sample of units to
             ensure that each inspector is conducting accurate and complete inspections and
             that there is consistency in the application of housing quality standards. In 2007
             and early 2008, there was no supervisor or other qualified individual conducting
             quality control inspections; rather, the inspectors themselves were performing the
             required quality control inspections.

             Further, from early 2008 through the summer of 2009, there were four different
             individuals in the position of housing choice voucher manager at the Authority.
             This frequent turnover in management contributed to the lack of an effective
             quality control inspection program because there was no consistency within the
             inspection program. Each of the four managers had different thoughts and ideas
             regarding the housing quality standards inspection process, including conducting
             quality control inspections.

Conclusion

             The Authority’s households were subjected to health- and safety-related
             violations, and the Authority did not properly use its program funds when it failed
             to ensure that units complied with HUD’s housing quality standards. In
             accordance with 24 CFR [Code of Federal Regulations] 982.152(d), HUD is
             permitted to reduce or offset any program administrative fees paid to a public
             housing authority if it fails to enforce HUD’s housing quality standards. The
             Authority disbursed $42,197 in program housing assistance payments for the 38
             non–quality control-inspected units that materially failed to meet HUD’s housing

                                             15
          quality standards and received $4,818 in program administrative fees. It also
          disbursed $39,113 in program housing assistance payments for the 15 quality
          control-inspected units that materially failed to meet HUD’s housing quality
          standards and received $3,585 in program administrative fees. Program
          households were subject to potential conditions that were not decent, safe, or
          sanitary for a prolonged time as a result.

          If the Authority implements adequate procedures and controls regarding its unit
          inspections to ensure compliance with HUD’s housing quality standards, we
          estimate that more than $903,000 in future housing assistance payments will be
          spent for units that are decent, safe, and sanitary over the next year. Our
          methodology for these estimates is explained in the Scope and Methodology
          section of this audit report.

Recommendations


          We recommend that the Director of HUD’s Cleveland Office of Public Housing
          require the Authority to

          1A. Certify that the applicable housing quality standards violations have been
              corrected for the 77 units (51 non–quality control plus 26 quality control
              unit inspections) cited in this finding.

          1B. Reimburse its program $81,310 ($42,197 plus $39,113) for housing
              assistance payments and $8,403 ($4,818 plus $3,585) in associated
              administrative fees) for the 53 units (38 plus 15 units) that materially failed
              to meet HUD’s housing quality standards.

          1C. Implement adequate procedures and controls to ensure that all program units
              meet HUD’s housing quality standards to prevent $903,984 in program
              funds from being spent over the next year on units that are in material
              noncompliance with the standards.

          1D. Ensure that all inspectors are properly trained and are familiar with housing
              quality standards and can apply them appropriately.

          1E. Ensure that all supervisory quality control inspectors are properly trained and
              are familiar with housing quality standards and can apply them appropriately.

          1F. Implement a consistent quality control inspection program that is in
              accordance with HUD requirements and its own administrative plan.

          We also recommend that the Director of HUD’s Cleveland Office of Public
          Housing



                                           16
1G.   Revise the February 2009 corrective action plan with the Authority to
      ensure that it encompasses the recommendations cited in this finding.




                              17
                          SCOPE AND METHODOLOGY

To accomplish our objective, we reviewed

       •   Applicable laws, regulations, the Authority’s 2000 and 2009 program administrative
           plans, HUD’s program requirements at 24 CFR Parts 35 and 982, HUD’s Public and
           Indian Housing Notice 2005-4, HUD Inspection Form 52580, Housing Inspection
           Manual-Section 8 Existing Housing Program, and HUD’s Housing Choice Voucher
           Guidebook 7420.10.

       •   The Authority’s household files, program policies and procedures, organizational chart,
           and program annual contributions contract with HUD.

       •   HUD’s files for the Authority.

We also interviewed the Authority’s employees, HUD staff, and program households.

Using data mining software, we statistically selected 53 of the Authority’s program units to inspect
from the 236 units that passed annual, initial, or reinspections by the Authority between March 16
and June 16, 2009. The 53 units were selected to determine whether the Authority’s program units
met HUD’s housing quality standards. Our sampling criteria used a 90 percent confidence level, 50
percent estimated error rate, and precision of plus or minus 10 percent.

Our sampling results determined that 38 of the 53 units (72 percent) materially failed to meet
HUD’s housing quality standards. Materially failed units were those units that had one or more
exigent health and safety violations that predated the Authority’s previous inspections. All units
were ranked, and we used auditor’s judgment to determine the material cutoff line.

The Authority’s July 2008 through June 2009 housing assistance disbursements listing showed that
the average monthly housing assistance payment was $509 for the 236 units in the population.
Projecting our sampling results of the 38 units that materially failed to meet HUD’s housing quality
standards to the population indicates that 170 units or 71.70 percent of the population contains the
attributes tested (would materially fail to meet HUD’s housing quality standards). The sampling
error is plus or minus 8.96 percent. In other words, we are 90 percent confident that the frequency
of occurrence of the attributes tested lies between 62.74 and 80.66 percent of the population. This
equates to an occurrence of between 148 and 190 units of the 236 units in the population.

       •   The lower limit is 62.74 percent times 236 units equals 148 units that materially failed to
           meet HUD’s housing quality standards.
       •   The point estimate is 71.70 percent times 236 units equals 170 units that materially
           failed to meet HUD’s housing quality standards.
       •   The upper limit is 80.66 percent times 236 units equals 190 units that materially failed to
           meet HUD’s housing quality standards.



                                                 18
Using the lower limit of the estimate of the number of units and the average housing assistance
payment, we estimate that the Authority will annually spend $903,984 (148 units times $509
average payment times 12 months) for units that materially fail to meet HUD’s housing quality
standards. This estimate is presented solely to demonstrate the annual amount of program funds
that will be correctly paid over the next year on decent, safe, and sanitary housing if the Authority
implements our recommendation. While these benefits would recur indefinitely, we were
conservative in our approach and only included the initial year in our estimate.

We selected for review 100 percent of the Authority’s program units that had received a quality
control inspection since January 2009, which totaled 27 conducted in February 2009. The 27 units
were inspected to determine whether the Authority’s program units met HUD’s housing quality
standards. Our results determined that 15 of the 27 units (56 percent) materially failed to meet
HUD’s housing quality standards. Materially failed units were those units that had one or more
exigent health and safety violations that predated the Authority’s previous inspections.

We performed our on-site audit work between May and August 2009 at the Authority’s offices
located at 189 First Street, Painesville, Ohio. The audit covered the period July 1, 2007, through
April 30, 2009, but was expanded as determined necessary.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our finding and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our finding and
conclusions based on our audit objective.




                                                  19
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are achieved:

   •   Program operations,
   •   Relevance and reliability of information,
   •   Compliance with applicable laws and regulations, and
   •   Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.



 Relevant Internal Controls

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

              •       Program operations – Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

              •       Relevance and reliability of data – Policies, procedures, and practices that
                      management has implemented to provide reasonable assurance that
                      operational and financial information used for decision making and reporting
                      externally is relevant and reliable and fairly disclosed in reports.

              •       Compliance with laws and regulations – Policies and procedures that
                      management has implemented to provide reasonable assurance that program
                      implementation is in accordance with laws, regulations, and provisions of
                      contracts or grant agreements.

              •       Safeguarding of assets and resources – Policies and procedures that
                      management has implemented to prevent or promptly detect unauthorized
                      acquisition, use, or disposition of assets and resources.

              We assessed the relevant controls identified above.

              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.


                                               20
Significant Weakness


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

           •      The Authority lacked adequate procedures and controls to ensure compliance
                  with HUD’s requirements and/or its program administrative plan regarding
                  housing quality standards inspections (see finding).


Separate Communication of
Minor Deficiencies

           We informed the Authority’s executive director and the Director of HUD’s
           Cleveland Office of Public Housing of minor deficiencies through a
           memorandum, dated September 23, 2009.




                                            21
                                   APPENDIXES

Appendix A

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

                 Recommendation                           Funds to be put
                     number             Ineligible 1/     to better use 2/
                       1B                 $89,713
                       1C                                    $903,984
                      Totals              $89,713            $903,984


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
     policies or regulations.

2/   Recommendations that funds be put to better use are estimates of amounts that could be
     used more efficiently if an Office of Inspector General (OIG) recommendation is
     implemented. These amounts include reductions in outlays, deobligation of funds,
     withdrawal of interest, costs not incurred by implementing recommended improvements,
     avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
     that are specifically identified. In this instance, if the Authority implements
     recommendation 1C, it will cease to incur program costs for units that are not decent,
     safe, and sanitary and, instead, will expend those funds in accordance with HUD’s
     requirements. Once the Authority successfully improves its procedures and controls, this
     will be a recurring benefit. Our estimate reflects only the initial year of this benefit.




                                            22
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION

Ref to OIG Evaluation   Auditee Comments




Comment 1




                         23
Ref to OIG Evaluation   Auditee Comments




Comment 1


Comment 2

Comment 3


Comment 2




Comment 3


Comment 2



Comment 2




Comment 1




                         24
Ref to OIG Evaluation   Auditee Comments




Comment 4



Comment 2




Comment 3


Comment 5




Comment 6




                         25
Ref to OIG Evaluation   Auditee Comments




Comment 7


Comment 2



Comment 7



Comment 2


Comment 8




                         26
Ref to OIG Evaluation   Auditee Comments




Comment 2


Comment 2



Comment 2



Comment 2


Comment 2



Comment 2



Comment 9




                         27
Ref to OIG Evaluation   Auditee Comments




Comment 9




Comment 2


Comment 1

Comment 2


Comment 4


Comment 2



Comment 2




                         28
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 2




Comment 2



Comment 2




Comment 9


Comment 2



Comment 3




                         29
Ref to OIG Evaluation   Auditee Comments




Comment 10




Comment 2



Comment 2



Comment 2




Comment 11




                         30
Ref to OIG Evaluation   Auditee Comments




Comment 1

Comment 2



Comment 2




Comment 11



Comment 2



Comment 12



Comment 2




                         31
Ref to OIG Evaluation   Auditee Comments




Comment 2

Comment 8




Comment 12




Comment 2




Comment 2




Comment 2




                         32
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 2




Comment 2




Comment 2


Comment 2



Comment 1


Comment 2




                         33
Ref to OIG Evaluation   Auditee Comments




Comment 2



Comment 2




Comment 3


Comment 3



Comment 13


Comment 14



Comment 2



Comment 12




                         34
Ref to OIG Evaluation   Auditee Comments




Comment 12




Comment 3



Comment2




Comment 2



Comment 2




Comment 2




                         35
Ref to OIG Evaluation   Auditee Comments




Comment 7



Comment 15


Comment 14



Comment 16

Comment 2




Comment 2



Comment 8




                         36
Ref to OIG Evaluation   Auditee Comments




Comment 7



Comment 15


Comment 2


Comment 2




Comment 5




Comment 2




                         37
Ref to OIG Evaluation   Auditee Comments




Comment 2



Comment 2




Comment 4




Comment 2



Comment 1

Comment 2




                         38
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 1

Comment 2



Comment 2




Comment 3




Comment 2




                         39
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 2




Comment 8


Comment 2




Comment 2

Comment 4




                         40
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comments 17




Comments 17 11




                         41
Ref to OIG Evaluation   Auditee Comments




Comment 17




Comments 17 14




Comments 17 14


,




                         42
Ref to OIG Evaluation   Auditee Comments




Comment 17




Comment 18




                         43
Ref to OIG Evaluation   Auditee Comments




Comment 17



Comment 17




                         44
Ref to OIG Evaluation   Auditee Comments




                         45
                          OIG Evaluation of Auditee Comments

Comment 1   We agree with the Authority’s assertion that HUD’s Housing Choice Voucher
            Guidebook 7420.10G does not identify a missing globe as a hazard. However, we
            made our determination based on the Authority’s housing quality checklist, entitled
            “Most Common Inspection Faults,” that lists light globes on all lights interior and
            exterior (except basement) as a common inspection fault. In addition, this violation
            was not listed as an exigent health and safety violation that predated the Authority’s
            previous inspections; therefore, we did not question the housing assistance
            payments.

Comment 2   We performed tenant interviews, consulted with our appraiser, and reviewed the
            Authority’s latest inspection reports in conservatively determining whether a
            housing quality standards violation existed before the last passed inspection
            conducted by the Authority or whether it was noted on the last passed inspection
            conducted by the Authority and was not corrected. Also, HUD regulations at 24
            CFR 982.401 require that all program housing meet HUD’s housing quality
            standards at the beginning of the assisted occupancy and throughout the tenancy.
            Therefore, we reported all violations identified at the time of our inspection so
            that HUD and the Authority could ensure that they were corrected. In addition,
            this violation was not listed as an exigent health and safety violation that predated
            the Authority’s previous inspections.

Comment 3   We disagree with the Authority’s assertion that at the time of the original inspection,
            the Authority’s administrative plan did not address the requirement of ground fault
            circuit interrupters. The original inspection took place in December 2008; our
            determination was based on the Authority’s housing quality checklist used through
            December 31, 2008, entitled “Most Common Inspection Faults,” that lists ground
            fault circuit interrupters at all sinks including laundry and sump pumps as a common
            inspection fault.

Comment 4   According to HUD’s Housing Choice Voucher Guidebook 7420.10G, the
            dwelling unit must be free of air pollutant levels that threaten the occupants’
            health. The water control valves and spout were not water sealed flush to the
            wall, resulting in their separating from the wall, which allowed water intrusion
            that will more than likely cause mildew inside the wall. This outcome is probable
            since the tub is surrounded by mildew. Further, HUD’s publication, “The Key to
            Mold Control Is Moisture Control,” states that mold, often called mildew, which
            can grow almost anywhere—on walls, ceilings, carpets, or furniture—is a
            condition caused by wetness. Mold is caused by humidity or wetness, caused by
            water leaks, spills from bathtubs or showers, or condensation. Mold produces
            spores that float through the air and can cause health problems.

Comment 5   According to HUD’s Housing Choice Voucher Guidebook 7420.10G, the
            building must provide an alternate means of exit in case of fire. The emergency
            exit must not be blocked. “Blocked” means that the exit is not useable due to

                                              46
              conditions such as debris, storage, being nailed shut, or a broken lock. An
              inverted door lock is an existing barrier that restricts and deprives emergency exit
              or use. The door can only be opened from the hall. The person inside the room
              does not have control and has been deprived of an exit under normal conditions or
              during emergency. There was a six-year-old child in the unit.

Comment 6     According to HUD’s Housing Choice Voucher Guidebook 7420.10G, any
              sleeping room must have at least one window. If the window was designed to be
              opened, it must be in proper working order. The room has only one window, and
              the air conditioner unit is screwed to the window and window side frame;
              therefore, the window is not in proper working order. Also, according to
              regulations at 24 CFR 982.401(g)(2)(iv), any room used for sleeping must have at
              least one window. If the window was designed to be opened, the window must
              work. In addition, the guidebook states that the building must provide an
              alternate means of exit in case of fire. The emergency exit must not be blocked.
              See comment 5; the bedroom door also had an inverted lock.

Comment 7     HUD’s regulations at 24 CFR 982.401(f)(2), when referring to outlets in both
              sections (ii) and (iii), specifically state that outlets must be in proper operating
              condition. Further, section 10.3 of HUD’s Housing Choice Voucher Program
              Guidebook 7420.10G discusses acceptability criteria for each of 13 housing quality
              standards performance requirements. The acceptability criteria for illumination and
              electricity performance requirements states in part that the public housing agency
              must be satisfied that the electrical system is free of hazardous conditions, including
              improper insulation or grounding of any component of the system. If outlets are not
              functioning as designed, they are a potential hazard. An inoperable ground fault
              circuit interrupter clearly is not “in proper operating condition.”

Comment 8     HUD regulations at 24 CFR 982.401 require that a fixed basin, shower, or tub be in
              proper operating condition.

Comment 9     HUD’s Housing Inspection Manual, General Health and Safety, section 8.7, states
              that types of hazards that may be present in the unit but not recorded before this item
              include a door that might fall because it is partially broken off its hinges. As
              mentioned in comment 2, this violation was not listed as an exigent health and safety
              violation that predated the Authority’s previous inspections.

Comment 10 HUD’s Housing Choice Voucher Program Guidebook 7420.10G states that the
           Authority must be satisfied that the electrical system is free of hazardous
           conditions, improper connections, or improper insulation or grounding of any
           component of the system. A light fixture, if in place, must work properly, which
           includes emergency exit light fixtures. The guidebook further states that the
           condition and equipment of interior and exterior stairs, halls, porches, and
           walkways must not present a danger of tripping and falling. Emergency lighting
           must operate properly in an emergency for occupants not to trip and fall.



                                                47
Comment 11 HUD’s Housing Choice Voucher Program Guidebook 7420.10G states that the
           dwelling unit must be structurally sound. The structure must not present any
           threat to the health and safety of the occupants and must protect the occupants
           from the environment. The guidebook also states that window and door surfaces
           (including door frame) must be in sufficient condition to support the installation
           and proper operation of window and door locks. As mentioned in comment 2,
           this violation was not listed as an exigent health and safety violation that predated
           the Authority’s previous inspections.

Comment 12 HUD’s Housing Choice Voucher Program Guidebook 7420.10G states that the
           ceilings, walls, and floors must not have any serious defects such as severe
           bulging or leaning, large holes, loose surface materials, severe buckling, missing
           parts, or other serious damage. The structure must not present any threat to the
           health and safety of the occupants and must protect the occupants from the
           environment. As mentioned in comment 2, this violation was not listed as an
           exigent health and safety violation that predated the Authority’s previous
           inspections.

Comment 13 HUD’s Housing Choice Voucher Program Guidebook 7420.10G states that
           improper operating conditions, including all conditions that may be unsafe such as
           broken or damaged source vents, flues, exhausts, and gas or oil liners that create a
           potential fire hazard or threat to health and safety, are not permitted.

Comment 14 We performed tenant interviews, consulted with our appraiser, and reviewed the
           Authority’s latest inspection reports in conservatively determining whether a
           housing quality standards violation existed before the last passed inspection
           conducted by the Authority or whether it was noted on the last passed inspection
           conducted by the Authority and was not corrected. Also, HUD regulations at 24
           CFR 982.401 require that all program housing meet HUD’s housing quality
           standards at the beginning of the assisted occupancy and throughout the tenancy.
           Therefore, we reported all violations identified at the time of our inspection so
           that HUD and the Authority could ensure that they were corrected.

Comment 15 HUD’s regulations at 24 CFR 982.401(h), performance requirement, state that the
           dwelling unit must be free of pollutants in the air at levels that threaten the health
           of occupants. Acceptability criteria at (2)(i) state that the dwelling unit must be
           free from dangerous levels of air pollution from carbon monoxide, sewer gas, fuel
           gas, dust, and other harmful pollutants. The ventilation system in the room was
           blocked by cardboard.

Comment 16 HUD’s regulations at 24 CFR 982.401(f) state that the dwelling unit must have
           sufficient electrical sources so occupants can use essential electrical appliances.
           The electrical fixture and wiring must ensure safety from fire.

Comment 17 The violations noted in the audit report are consistent with published guidance,
           including the Section 8 Housing Inspection Manual, HUD’s Housing Choice

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              Voucher Guidebook 7420.10G, HUD’s regulations (24 CFR 982.401), and the
              Authority’s program administrative plan including the inspectors’ checklist in
              effect during the initial inspection. In addition, we performed tenant interviews,
              consulted with our appraiser, and reviewed the Authority’s latest inspection
              reports in conservatively determining whether a housing quality standards
              violation existed before the last passed inspection conducted by the Authority or
              whether it was noted on the last passed inspection conducted by the Authority and
              was not corrected. Further, HUD regulations at 24 CFR 982.401 require that all
              program housing meet HUD’s housing quality standards at the beginning of the
              assisted occupancy and throughout the tenancy. Therefore, we reported all
              violations identified at the time of our inspection so that HUD and the Authority
              could ensure that they were corrected. In certain instances, the violation was not
              listed as an exigent health and safety violation that predated the Authority’s
              previous inspections. This condition was noted throughout our evaluation of the
              Authority’s comments.

Comment 18 We acknowledge the Authority’s efforts. The Authority’s proposed actions, if
           fully implemented, should improve its procedures and controls to ensure that its
           quality control inspections are performed on a consistent basis and include a
           quality control supervisor. The Authority should provide supporting
           documentation to HUD’s staff, who will work with the Authority, to resolve the
           recommendation.




                                              49
Appendix C

           HUD’S REGULATIONS AND THE AUTHORITY’S
               PROGRAM ADMINISTRATIVE PLAN

HUD’s regulations at 24 CFR 982.1 state that HUD’s Housing Choice Voucher program pays
rental subsidies so eligible families can afford decent, safe, and sanitary housing.

HUD’s regulations at 24 CFR 982.401 require that all program housing meet HUD’s housing
quality standards performance requirements both at commencement of assisted occupancy and
throughout the tenancy.

HUD’s regulations at 24 CFR 982.404 require that owners of program units maintain the units in
accordance with HUD’s housing quality standards. If the owner fails to maintain the dwelling
unit in accordance with HUD’s housing quality standards, the authority must take prompt and
vigorous action to enforce the owner’s obligations. The authority’s remedies for such breach of
the housing quality standards include termination, suspension, or reduction in housing assistance
payments and termination of the housing assistance payments contract. The authority must not
make any housing assistance payments for a dwelling unit that fails to meet the housing quality
standards unless the owner corrects the defect within the period specified by the authority and
the authority verifies the correction. If a defect is life threatening, the owner must correct the
defect within 24 hours. For other defects, the owner must correct them within 30 calendar days.

HUD’s regulations at 24 CFR 982.153 state that the public housing authority must comply with
the consolidated annual contributions contract, the application, HUD regulations and other
requirements, and its program administrative plan.

The Authority’s program administrative plan, dated April 1, 2009, page 8-5, Clarifications of
HUD Requirements, states that as permitted by HUD, the Authority has adopted the following
specific requirements that elaborate on HUD standards: (1) in areas where plaster or drywall is
sagging, severely cracked, or otherwise damaged, it must be repaired or replaced; (2) window
sashes must be in good condition (solid and intact) and properly fitted to the window frame,
damaged or deteriorated sashes must be replaced, and window screens must be in good condition
(only applies if screens are present); (3) all exterior doors must be weather tight to avoid any air
or water infiltration, be lockable, have no holes, have all trim intact, and have a threshold; and
(4) if window security bars or security screens are present on emergency exit windows, they
must be equipped with a quick release system. The owner is responsible for ensuring that the
family is instructed on using the quick release system.

The Authority’s program administrative plan, dated April 1, 2009, page 8-6, Life Threatening
Conditions, states that HUD requires the Authority to define life-threatening conditions and to
notify the owner or the family (whichever is responsible) of the corrections required. The
responsible party must correct life-threatening conditions within 24 hours of Authority
notification. The following are considered life-threatening conditions: any condition that

                                                50
jeopardizes the security of the unit; major plumbing leaks or flooding, waterlogged ceiling or
floor in imminent danger of falling; natural or LPgas or fuel oil leaks; any electrical problem or
condition that could result in shock or fire; absence of a working heating system when outside
temperature is below 50 degrees Fahrenheit; utilities not in service, including no running water;
conditions that present the imminent possibility of injury; obstacle which prevents tenant’s
entrance or exit; and absence of a functioning toilet in the unit.

The Authority’s program administrative plan, dated April 1, 2009, page 8-13, Quality Control
Inspections, states that HUD requires an Authority supervisor or other qualified person to
conduct quality control inspections of a sample of units to ensure that each inspector is
conducting accurate and complete inspections and that there is consistency in the application of
housing quality standards. The unit sample must include only units that have been inspected
within the preceding three months. The selected sample will include (1) each type of inspection
(initial, annual, and special), (2) inspections completed by each inspector, and (3) units from a
cross-section of neighborhoods.




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