oversight

The Bucks County Housing Authority, Doylestown, PA, Did Not Always Ensure That Its Program Units Met Housing Quality Standards

Published by the Department of Housing and Urban Development, Office of Inspector General on 2015-05-05.

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

      Bucks County Housing Authority,
             Doylestown, PA
                  Housing Choice Voucher Program




Office of Audit, Region 3          Audit Report Number: 2015-PH-1002
Philadelphia, PA                                          May 5, 2015
To:            Monica Hawkins, Director, Office of Public Housing, Pennsylvania State Office,
               3APH
               //signed//
From:          David E. Kasperowicz, Regional Inspector General for Audit, Philadelphia
               Region, 3AGA
Subject:       The Bucks County Housing Authority, Doylestown, PA, Did Not Always Ensure
               That Its Program Units Met Housing Quality Standards



Attached is the U.S. Department of Housing and Urban Development (HUD), Office of Inspector
General’s (OIG) final results of our review of the Bucks County Housing Authority’s Housing
Choice Voucher program.

HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.

The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at
215-430-6730.
                    Audit Report Number: 2015-PH-1002
                    Date: May 5, 2015

                    The Bucks County Housing Authority, Doylestown PA, Did Not Always
                    Ensure That Its Program Units Met Housing Quality Standards




Highlights

What We Audited and Why
We audited the Bucks County Housing Authority’s Housing Choice Voucher program because
the U.S. Department of Housing and Urban Development (HUD) authorized it more than $15
million per year in fiscal years 2012 to 2014 and we had not audited its housing quality standards
inspection program. Our audit objective was to determine whether the Authority ensured that its
Housing Choice Voucher program units met HUD’s housing quality standards.

What We Found
The Authority did not always ensure that its program units met housing quality standards. Its
housing quality standards inspection process needs improvement. Of 14 program units
statistically selected for inspection, 8 did not meet HUD’s housing quality standards. However,
none of the eight units was in material noncompliance with HUD’s standards. Most of the
violations identified could be easily corrected.

What We Recommend
We recommend that HUD direct the Authority to (1) certify, along with the owners of the eight
units cited in the finding, that the applicable housing quality standards violations have been
corrected and (2) provide training to its inspectors on conducting housing quality standards
inspections.
Table of Contents
Background and Objective......................................................................................3

Results of Audit ........................................................................................................4
         Finding: The Authority Did Not Always Ensure That Its Program Units Met
         Housing Quality Standards ............................................................................................. 4

Scope and Methodology ...........................................................................................6

Internal Controls ......................................................................................................7

Appendix ...................................................................................................................8
         A. Auditee Comments and OIG’s Evaluation ................................................................ 8




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Background and Objective
The Bucks County Housing Authority was established in 1941 to provide safe, decent, and
sanitary housing conditions for very low-income families and to manage resources efficiently.

The Authority’s mission is to promote personal, economic, and social upward mobility and to
provide families the opportunity to make the transition from subsidized to nonsubsidized
housing. The Authority is governed by a board of commissioners consisting of five members.
The board appoints an executive director to manage the day-to-day operations of the Authority.
Its Housing Choice Voucher program office is located at 240 Levittown Parkway, Levittown,
PA.

Under the Section 8 Housing Choice Voucher program, the U.S. Department of Housing and
Urban Development (HUD) authorized the Authority to provide leased housing assistance
payments to 3,399 eligible households in fiscal year 2014. HUD authorized the Authority the
following financial assistance for housing choice vouchers for fiscal years 2012 through 2014.

                            Number of vouchers       Annual budget
                   Year        authorized              authority
                   2012           3,399               $19,745,263
                   2013           3,399               $20,478,565
                   2014           3,399               $15,003,963

HUD regulations at 24 CFR (Code of Federal Regulations) 982.405(a) require public housing
authorities to perform unit inspections before the initial move-in and at least annually. The
Authority must inspect the unit leased to the family before the term of the lease, at least annually
during assisted occupancy, and at other times as needed to determine whether the unit meets
housing quality standards.

Our audit objective was to determine whether the Authority ensured that its Housing Choice
Voucher program units met HUD’s housing quality standards.




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Results of Audit

Finding: The Authority Did Not Always Ensure That Its Program
Units Met Housing Quality Standards
The Authority did not always conduct adequate inspections to enforce HUD’s housing quality
standards. Of 14 program units statistically selected for inspection, 8 did not meet HUD’s
standards. However, none of the eight units was in material noncompliance with the standards.
This condition occurred mainly because the Authority’s inspectors were not aware that some
deficiencies were violations. As a result, the Authority made housing assistance payments to
owners for units that did not comply with requirements.

Housing Units Did Not Always Meet HUD’s Housing Quality Standards
We statistically selected 14 units from a universe of 534 units that passed an Authority housing
quality standards inspection between June 1 and August 31, 2014. The 14 units were selected to
determine whether the Authority ensured that the units in its Housing Choice Voucher program
met housing quality standards. We inspected the 14 units on October 7 and 8, 2014.
Of the 14 housing units inspected, 8 did not meet HUD’s housing quality standards because they
had 51 violations, including 19 violations that needed to be corrected within 24 hours. However,
none of the units was in material noncompliance with HUD’s standards. Most of the violations
were electrical violations that could be easily corrected. None of the units was in extremely poor
condition due to (1) deficiencies that had existed for an extended period, (2) deficiencies noted in
a prior inspection that had not been corrected, or (3) deferred maintenance that consistently
failed the unit. The violations occurred mainly because the Authority’s inspectors, including the
inspector that performed quality control inspections, were not aware that some deficiencies were
violations. The inspectors had not received formal training on conducting housing quality
standards inspections. Regulations at 24 CFR 982.401 require that all program housing meet
housing quality standards performance requirements, both at commencement of the assisted
occupancy and throughout the assisted tenancy.

Conclusion
The Authority did not always ensure that its program units met housing quality standards. Its
housing quality standards inspection process needs to be improved. With minor modification to
its process, the Authority can ensure that it pays housing assistance to owners for program units
that meet housing quality standards.




                                                 4
Recommendations
We recommend that the Director of HUD’s Pennsylvania State Office of Public Housing direct
the Authority to

       1A.    Certify, along with the owners of the eight units cited in the finding, that the
              applicable housing quality standards violations have been corrected.

       1B.    Provide training to its inspectors on conducting housing quality standards
              inspections.




                                                5
Scope and Methodology
We performed our onsite audit work from September 2014 through January 2015 at the
Authority’s Housing Choice Voucher program office located at 240 Levittown Parkway,
Levittown, PA. The audit covered the period September 1, 2013, through August 31, 2014, but
was expanded when necessary.

To accomplish our objective, we reviewed

       •   Applicable laws, regulations, the Authority’s administrative plan, HUD’s program
           requirements at 24 CFR Part 982, HUD’s Housing Choice Voucher Guidebook
           7420.10G, and other guidance.

       •   The Authority’s inspection reports; computerized databases, including housing quality
           standards inspection, housing assistance payment, and tenant data; annual audited
           financial statements for fiscal years 2012 and 2013; policies and procedures; board
           meeting minutes; and organizational chart.

       •    HUD’s monitoring reports for the Authority.

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

To achieve our audit objective, we relied in part on computer-processed data from the Authority’s
computer system. Although we did not perform a detailed assessment of the reliability of the data,
we did perform a minimal level of testing and found the data to be adequate for our purposes.

We conducted interviews with responsible Authority employees and HUD staff. We statistically
selected 14 of the Authority’s program units to inspect from a universe of 534 units that passed the
Authority’s housing quality standards inspections from June 1 to August 31, 2014. We selected the
14 units to determine whether the Authority’s program units met housing quality standards. We
inspected the units on October 7 and 8, 2014. Of the 14 units inspected, 8 failed, and 6 passed
our inspection. Although the 8 failed units had 51 violations, including 19 violations that needed
to be corrected within 24 hours, none of the units was in material noncompliance with housing
quality standards. Therefore, we did not inspect additional units.

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 findings and conclusions based on our audit
objective(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




                                                 6
Internal Controls
Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to
•   Effectiveness and efficiency of operations,
•   Reliability of financial reporting, and
•   Compliance with applicable laws and regulations.
Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls 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 objectives:

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

       •   Validity and reliability of data – Policies and procedures that management has
           implemented to reasonably ensure that valid and reliable data are obtained,
           maintained, and fairly disclosed in reports.

       •   Compliance with applicable laws and regulations – Policies and procedures that
           management has implemented to reasonably ensure that resources use is consistent
           with laws and regulations.

We assessed the relevant controls identified above.

A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, the
reasonable opportunity to prevent, detect, or correct (1) impairments to effectiveness or
efficiency of operations, (2) misstatements in financial or performance information, or (3)
violations of laws and regulations on a timely basis.

We evaluated internal controls related to the audit objective in accordance with generally
accepted government auditing standards. Our evaluation of internal controls was not designed to
provide assurance regarding the effectiveness of the internal control structure as a whole.
Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal
control.




                                                  7
Appendix A
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation




Comment 1




Comment 2




                              8
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation




                              9
                          OIG Evaluation of Auditee Comments


Comment 1   The Authority certified that all of the housing quality standards violations noted in
            the report have been corrected by the owners of the eight units. We did not verify
            the correction of the violations. Therefore, as part of the normal audit resolution
            process, HUD will verify the Authority’s corrective actions and determine
            whether they were adequate to satisfy the intent of the recommendation.

Comment 2   The Authority stated that it has scheduled online housing quality standards
            training for all of its inspectors. Since this training did not occur during the audit,
            we did not evaluate it or verify that it was completed. Therefore, as part of the
            normal audit resolution process, HUD will verify that the Authority’s corrective
            actions were adequate to satisfy the intent of the recommendation.




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