U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT OFFICE OF INSPECTOR GENERAL February 11, 2016 MEMORANDUM NO: [2016-NY-1801] Memorandum TO: Annmarie Uebbing Director, Office of Community Planning and Development, 2FD //SIGNED// FROM: Kimberly Greene Regional Inspector General for Audit, 2AGA SUBJECT: The City of Jersey City’s Administration of Its Lead Paint Activities Did Not Comply With Federal and New Jersey State Requirements INTRODUCTION We are conducting an audit of the City of Jersey City’s Community Development Block Grant (CDBG) program based upon an Office of Inspector General (OIG) hotline complaint containing several allegations, one of which was that the City’s Division of Community Development’s lead risk assessor was not qualified or producing monitoring reports for rehabilitation work funded under the City’s Homeowner Rehabilitation Program. The objective of our review is to determine whether the complaint allegations had merit. During our review of 10 homeowner rehabilitation activities funded under the City’s program, incidents of noncompliance with CDBG program lead paint requirements raised an issue of concern that we wish to bring to your attention for immediate corrective action. U.S. Department of Housing and Urban Development (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. Should you or your staff have any questions, please contact Karen A. Campbell-Lawrence, Assistant Regional Inspector General for Audit, at (212)-542-7977. Office of Audit, Region 2 26 Federal Plaza, Room 3430, New York, NY 10278 Phone (212) 264-4174, Fax (212) 264-1400 Visit the Office of Inspector General Web site at www.hudoig.gov. METHODOLOGY AND SCOPE To obtain an understanding of the City’s administration of lead paint activities, we reviewed applicable Federal and State laws and regulations, reviewed the City’s homeowner rebate program policy and procedure manual, interviewed officials from HUD’s Newark, NJ, Office of Community Planning and Development and the City’s Community Development Division, and administered an internal control questionnaire to City officials. Since the complaint alleged the City’s misappropriation of CDBG funds for at least two years prior to the December 2014 date of the complaint, we selected and reviewed a sample of 10 of 27 case files of homeowner rehabilitation funded under the City’s Homeowner Rehabilitation Program in 2012 and 2013, April 1, 2012, through March 31, 2014. The results of the sample testing were limited to the case files reviewed and cannot be projected to the universe. The ten case files were selected based on one of the following risk factors: materiality of assistance provided to each property, lack of an imposed lien on an assisted property, and assistance provided in excess of the maximum assistance limit. We performed our onsite work from May through October 2015 at the City’s Community Development Division located at 30 Montgomery Street, Jersey City, NJ. Our review of the City’s lead paint activities was conducted in accordance with generally accepted government auditing standards. BACKGROUND All housing units assisted with CDBG funds must comply with regulations at 24 CFR (Code of Federal Regulations) Part 35, regarding lead-based paint poisoning prevention in certain residential structures. All lead-based paint activities must be performed under the work practice standards at 40 CFR 745.227. The City was awarded more than $5.2 and $5.8 million in CDBG funds in program years 2014 and 2015, respectively. The City’s Homeowner Rehabilitation Program was designed to assist income-eligible homeowners in abating code violations and eliminating safety and health hazards in the Jersey City housing stock. The City’s program assisted 27 Jersey City homeowners with $680,787 in CDBG funds to rehabilitate their homes. RESULTS OF REVIEW City officials did not ensure that the risk assessment of lead hazards in homeowners’ houses was conducted in compliance with Federal and New Jersey State laws and regulations. Specifically, Lab certificates of lead dust analysis show that lead dust of 328 and 488 micrograms per feet squared (μg/ft²) was found in window sills after rehabilitation work was completed at two homeowner units (detailed in appendix B). Regulations at 24 CFR § 35.1320 provide that the dust lead standard for interior window sills is 250 μg/ft². However, two rehabilitated homeowner units had lead paint dust in excess of the dust lead standard. Signed statements on the existence of lead paint hazards at three rehabilitated homeowner units were not adequately completed by the City’s lead risk assessor. Specifically, one 2 final inspection certification form was signed and dated before the rehabilitation work completion date; one final inspection certification form was signed, and both boxes pertaining to whether lead paint existed were checked; and one final inspection certification form was signed, and neither box pertaining to whether lead paint existed was checked (detailed in appendix C). Section 4.4 of the City’s homeowner rebate program policy and procedures manual provides that clearance must be performed by a certified professional to check whether rehabilitated units are safe for occupancy and that the clearance will also include a detailed report to be maintained in the case file. However, the only document certified by the City’s lead risk assessor, after the completion of rehabilitation work at the homeowners’ units, was not adequately completed. An initial lead risk assessment report was not prepared for one homeowner unit, and the report for another homeowner unit did not include all of the required information, such as the lead risk assessor name, result of visual inspection, and serial number of the X- Ray Fluorescence (XRF) device used (detailed in appendix D). Regulations at 40 CFR § 745.227(d)(11) provide that the certified risk assessor must prepare a risk assessment report, which must include the date of assessment, address of the building, risk assessor name and certification number, result of the visual inspection, specific locations of each painted component tested for the presence of lead, and serial number of any XRF device and other information. Lab certificates of lead dust analysis show that surface samples collected by the City’s lead risk assessor for the ten homeowner units reviewed were collected only from window sills instead of window sills and floors. Regulations at 40 CFR § 745.227(d)(5) provide that dust samples from the interior window sill(s) and floor must be collected and analyzed for lead concentration in all living areas where one or more children, age 6 and under, are most likely to come into contact with dust. Further, the City’s lead risk assessment reports for eight homeowner units stated that dust samples used to determine the level of lead dust in the homes were collected from horizontal surfaces where lead dust could accumulate, such as the floor, stair tread, window sill, window well, etc. However, the dust samples were collected from window sills only (detailed in appendix E). The City’s XRF lead analyzer was not registered with the State of New Jersey. Compliance with the HUD regulations at 24 CFR Part 35 does not relieve participant of responsibility for compliance with State or local laws. Further, New Jersey Administrative Code 7:28-3.1(a) provides that any State, county, or local government must register with the Department of Environmental Protection every ionizing radiation- producing machine in the State of New Jersey. According to City officials, the City is exempt under NJAC7:28-3.2(c) which provides that ionizing radiation-producing machines possessed, stored or used by agencies of the United States Government are exempt from registration. However, the City is not exempt since it is not considered to be an agency of the U.S. government. As a result of our inquiry, City officials recently submitted an application to the State of NJ for registering the XRF device; however, there is no evidence to date that the registration was approved. 3 In addition to the above, our ongoing audit has identified other CDBG program deficiencies that will be addressed in our final audit report planned for issuance after this audit memorandum. These deficiencies provide additional concerns with the City’s financial and administrative controls to ensure that the City’s CDBG program was administered in compliance with program requirements and Federal regulations. CONCLUSION There was no assurance that the household members of the homes rehabilitated with CDBG funds were not at risk of lead paint hazards, that lead paint dust did not exist after rehabilitation work was completed at the 27 homes rehabilitated with CDBG funds in program years 2012 and 2013, and that the City’s XRF lead analyzer complied with New Jersey administrative codes. We attributed these deficiencies to the City staff’s unfamiliarity with CDBG program requirements and improper supervision of the City’s lead risk assessment process. RECOMMENDATIONS We recommend that the Director of HUD’s Newark, NJ, Office of Community Planning and Development instruct City officials to 1A. Notify the two homeowners that lead dust existed in their homes after the rehabilitation work was completed and that it exceeded HUD’s allowable lead limits. 1B. Collect and test lead dust samples from the floors and window sills of the 27 homeowner units that received CDBG funds in program years 2012 and 2013 to ensure that the lead dust does not exceed the allowable lead dust standards. If the tests reveal the existence of excessive lead dust, City officials need to reduce the lead dust to the allowable limit, or reimburse the City’s CDBG line of credit from non-Federal funds for disbursements previously made to repair those 27 units. 1C. Strengthen the City’s administrative controls to ensure that the lead risk assessment conducted after the completion of rehabilitation work is adequately documented. 1D. Strengthen the City’s administrative controls to ensure that adequate documentation is maintained to support compliance with the Federal and State lead requirements. 1E. Provide documentation to support that the City’s XRF lead analyzer is registered with the State of New Jersey as required. 1F. Provide lead hazard training to the City’s lead risk assessor to ensure compliance with Federal and State requirements. 4 Appendixes Appendix A AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 1 5 AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 2 Comment 2 Comment 3 Comment 4 Comment 2 6 AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 5 Comment 1 Comment 2 Comment 6 7 AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments 8 AUDITEE COMMENTS AND OIG’S EVALUATION Comment 1 City officials’ actions are responsive to the recommendation. However, City officials need to provide HUD Newark CPD office with documentation to support that notifications were sent to the two affected property owners. Comment 2 City officials’ actions are responsive to the recommendation. However, City officials need to provide HUD Newark CPD office with documents to support amending its policies and training requirements to ensure compliance with Federal and State requirements. Comment 3 City officials stated that the City estimates that there are approximately 15-20 CDBG assisted properties for the years 2012 and 2013. However, our review of documents provided by City officials during the audit reveals that the City’s program assisted 27 Jersey City homeowners in program year 2012 and 2013. Comment 4 City officials’ action is responsive to the recommendation. However, City officials need to provide a copy of the City’s XRF lead analyzer registration with the State of New Jersey to HUD Newark CPD office. Comment 5 City officials reiterate that they have not reviewed the hotline complaint and that the draft audit memorandum pertains only to the lead paint compliance measures pursuant to 24 CFR Part 35. Comment 6 City officials’ planned actions are responsive to the recommendation. However, City officials need to provide HUD Newark CPD office with documents to disclose the result of testing the 27 units for lead paint dust and the corrective actions if lead dust exceeds the allowable limit. 9 Appendix B LAB CERTIFICATES OF LEAD DUST ANALYSIS 10 11 Appendix C STATEMENTS ON THE EXISTENCE OF LEAD HAZARDS 12 13 14 Appendix D INCOMPLETE INITIAL LEAD RISK ASSESSMENT REPORT 15 16 17 Appendix E LAB CERTIFICATES OF LEAD DUST ANALYSIS 18 19 20 21 22 23 24 25
The City of Jersey City's Administration of Its Lead Paint Activities Did Not Comply With Federal and New Jersey State Requirements
Published by the Department of Housing and Urban Development, Office of Inspector General on 2016-02-11.
Below is a raw (and likely hideous) rendition of the original report. (PDF)