Massachusetts Audit Reports

Issue Date: August 29, 2007
Audit Report No: 2007-BO-1008
File Size: 1.43MB

Title: Holyoke Housing Authority, Holyoke, MA Needs to Improve Its Internal Controls over the Voucher Program, Cost Allocations and Transfers

We audited the Housing Choice Voucher program (Voucher program) at the Holyoke Housing Authority (Authority) as part of our fiscal year 2007 annual audit plan. The objective of the audit was to determine whether the Authority administered the Voucher program in accordance with its annual contributions contracts and U.S. Department of Housing and Urban Development (HUD) requirements. Our efforts focused on whether the Authority properly (1) determined tenant eligibility/HAP payment calculations; (2) made and supported rent reasonableness determinations; (3) determined payments for unused sick leave; and (4) allocated costs and accounting for interfund transfer transactions.

The Authority generally administered the Voucher program according to its administrative plan but not always in accordance with its annual contributions contracts and HUD requirements. It did not (1) ensure that the required documentation was maintained to support the eligibility of each tenant and its housing assistance payments, (2) conduct rent reasonableness determinations according to HUD requirements, (3) follow a prudent personnel practice regarding payment for unused sick leave upon the death or retirement of an employee, and (4) always properly allocate costs or account for interfund transfer transactions.

These conditions occurred because the Authority either had not established adequate internal controls or followed the controls that were in place to ensure compliance with its annual contributions contracts and HUD regulations.

Issue Date: August 24, 2007
Audit Report No: 2007-BO-1007
File Size: 221.37KB

Title: The City of Fall River, MA, Generally Administered Its Block Grant and HOME Programs in Accordance with HUD Requirements

We reviewed the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs administered by the Community Development Agency, City of Fall River, Massachusetts (City) as part of our annual audit plan.

Our audit objective was to determine whether the City administered its CDBG and HOME programs in compliance with U. S. Department of Housing and Urban Development (HUD) requirements. We focused on whether the City: (1) had adequate internal controls over its management process, accounting, and data processing; (2) used CDBG funds for national objectives; (3) used CDBG and HOME program funds for eligible activities and were adequately supported; and (4) properly accounted for CDBG and HOME program income.

The City generally administered its CDBG and HOME programs in compliance with HUD requirements. The City's (1) internal controls over its management process, accounting, and data processing were adequate, (2) CDBG funds were used for national objectives, (3) CDBG and HOME program funds were used for eligible activities and were adequately supported, and (4) CDBG and HOME program income was properly accounted for. Thus, the report contains no formal recommendations and no further action is necessary. However, the City has more than $3 million in unobligated HOME funds and could benefit by developing partnerships with additional Community Housing Development Organizations (CHDOs) to use these funds to develop additional housing for low to moderate income families.

Issue Date: April 23, 2007
Audit Report No: 2007-BO-1005
File Size: 1.10MB

Title: The City of New Bedford, Massachusetts, Did Not Meet Certain Requirements of HUD's Community Development Block Grant Program

As part of our annual plan, we audited the Office of Housing and Community Development, City of New Bedford, Massachusetts' (City) administration of its Community Development Block Grant (CDBG)) and HOME Investment Partnerships (HOME) programs. Our audit objective was to determine whether the City complied with U.S. Department of Housing and Urban Development (HUD) regulations in administering its CDBG and HOME programs.

The City generally administered its CDBG and HOME programs in accordance with HUD regulations. However, it did not always ensure that its subrecipients followed HUD requirements or met the program objectives of the subrecipent agreements. The City failed to ensure that two of its subrecipients followed HUD requirements for full and open competition regarding procurements for construction work. It also did not ensure that another subrecipient attained its program objectives of issuing the required number of loans and creating the required number of new jobs. In addition, the City did not ensure that this subrecipient properly collateralized CDBG funds on deposit in the same bank, or made loans that did not involve conflicts of interest. These problems occurred because the City did not always adequately monitor subrecipient activities or failed to ensure that its subrecipents always took corrective action. As a result, there is a lack of assurance that subrecipient procurements were fair and equitable and that the most favorable contract prices were obtained for $750,000 in construction funding. Also, more than $1 million in CDBG funding for loans and job creation may not have been the best use of HUD funds, CDBG funds totaling $188,177 were not adequately safeguarded against loss, and a subrecipient approved two loans that created apparent conflicts of interest.

We recommend that the director of the Office of Community Planning and Development in Boston require the City to (1) obtain a cost analysis for each subrecipient to support the $750,000 in CDBG funding provided for construction contracts, (2) ensure that the future use of CDBG funds creates the number of new jobs necessary to fulfill the requirements of past and current agreements to put current funding of $285,000 to better use, (3) obtain and provide evidence that CDBG funds in excess of Federal Deposit Insurance Corporation (FDIC) limits for the subrecipient are fully collateralized, and (4) ensure that the subrecipient establishes adequate policies addressing conflicts of interest including requirements for providing full disclosure.

Issue Date: March 21, 2007
Audit Report No: 2007-BO-1003
File Size: 550.37KB

Title: The Office of Community Development, City of Chicopee, Massachusetts, Did Not Properly Award and Administer Community Development Block Grant and HOME Funds Used for its Housing Activities

As part of our annual plan, we audited the Office of Community Development, City of Chicopee, Massachusetts' (City) administration of its Community Development Block Grant (CDBG) and HOME programs. The objective of the audit was to evaluate the City's administration of its housing rehabilitation contracts funded through the CDBG or HOME programs and its oversight and monitoring of various for-profit developers (developers) involved in the rehabilitation activities. We also evaluated whether $700,000 in HOME set-aside funds was committed for an eligible project.

The City did not adequately administer more than $2.2 million in housing rehabilitation contracts funded through its CDBG and HOME programs. It did not perform the required independent analysis of cost estimates submitted by developers before awarding rehabilitation contracts, did not always enforce procurement and financial management contract provisions included in written agreements with developers, did not adequately address performance problems on the part of developers identified during reviews performed by it, and approved final payments for unfinished projects. In addition, it approved more than $1.2 million in unreasonable and unsupported rehabilitation contract costs The $1.2 million is part of the overall $2.2 million., and its use of a $700,000 community housing development organization set-aside (set-aside) from the HOME program was an ineligible use of these funds.

We recommend that the director of the Office of Community Planning and Development in Boston require the City to establish written policies and procedures for both the HOME and CDBG programs that meet HUD requirements for awarding, administering, and monitoring program funds. We also recommend that the City provide supporting documentation for the $1.2 million in unsupported costs, including establishing the reasonableness of the costs, or repay the funds and be directed not to use set-asides on the ineligible project, which will allow $700,000 to be put to better use on other eligible projects.

Issue Date: November 3, 2006
Audit Report No: 2007-BO-1001
File Size: 76.41KB

Title: Lynn Housing Authority & Neighborhood Development, Lynn, Massachusetts, Generally Administered its Section 8 Voucher Program in Accordance with HUD Requirements

We reviewed the Section 8 Housing Choice Voucher program (Section 8 program) at the Lynn Housing Authority and Neighborhood Development (Authority) as part of our fiscal year 2006 annual audit plan. Our audit objectives were to determine whether the Authority effectively and efficiently administered its Section 8 program in compliance with the U.S. Department of Housing and Urban Development (HUD) requirements and its annual contributions contracts.

Our audit of the Authority's Section 8 program did not disclose anything that indicated that it was not administering its Section 8 program in accordance with U.S. Department of Housing and Urban Development requirements and its annual contributions contracts. The audit also did not disclose anything that would cause us to believe that the Authority's internal control structure, over its management processes, accounting and data processing, did not adequately ensure that the Section 8 program was effectively and efficiently managed.

Based on our audit, we did not identify any reportable conditions or deficiencies; therefore, we are not making any recommendations.

Issue Date: July 26, 2006
Audit Report No.: 2006-BO-1010
File Size: 1.09MB

Title: Boston Housing Authority, Boston, Massachusetts, Used Voucher Program Funds to Pay State Housing Assistance Program Expenses and Needs to Improve Its Reasonableness Process

We reviewed the Section 8 Housing Choice Voucher program (Voucher program) at the Boston Housing Authority (Authority) as part of our fiscal year 2006 annual audit plan. Our audit objectives were to determine whether the Authority properly used Voucher program funds as required by U.S. Department of Housing and Urban Development (HUD) annual contributions contracts and to evaluate whether rent reasonableness determinations were conducted as required by HUD regulations.

The Authority generally administered the Voucher program according to its administrative plan but did not always comply with its annual contributions contracts and HUD requirements. The Authority used Voucher program funds to subsidize state housing programs. It also did not conduct rent reasonableness determinations according to requirements cited in its administration plan and HUD regulations. These conditions occurred because the Authority had not established or always followed its internal controls to ensure compliance with its annual contributions contracts and HUD regulations.

We recommend that the director of the Office of Public Housing require the Authority to stop using Voucher program funds to pay for nonprogram costs, implement changes to separate its federal and state leased housing data into two databases, and improve its rent reasonability determinations procedures and the accuracy of unit data in its databases

.Issue Date: January 23, 2006
Audit Report No.: 2006-BO-1003
File Size: 145.68KB

Title: The City of Malden, Massachusetts, Working to Ensure Appropriate Use of Community Development Block Grant and HOME Investment Partnerships Program Administrative Funds

At the request of the Office of Community Planning and Development, we reviewed the City of Malden (City) and the Malden Redevelopment Authority (Authority) to determine whether Community Development Block Grant (Block Grant) and HOME Investment Partnerships Program (HOME Program) administrative funds were used in compliance with U.S Department of Housing and Urban Development (HUD) requirements.

We found that the City and the Authority were working to strengthen internal controls to ensure compliance with HUD requirements. The City and Authority needed to strengthen the controls by ensuring that all job descriptions related duties to the Block Grant and HOME programs, and allocations of salaries and travel expenditures were proper and adequately supported. While some funds had not been used in compliance with HUD requirements, the City and the Authority had commenced strengthening the controls, and these changes should ensure compliance. Additionally, the City and the Authority repaid $14,766 that had not been used in compliance with the Block Grant.

We did not identify any conditions that required us to recommend corrective action.

Issue Date: November 29, 2005
Audit Report No.: 2006-BO-1002
File Size: 637.25KB

Title: Review of Worcester Housing Authority, Worcester, MA, Identified $1.9 Million of its Public Housing Operating Funds Used for Non-Program Purposes

We reviewed the Housing Choice Voucher program and the Public Housing Operating Fund program at the Worcester Housing Authority (Authority). This audit was conducted as part of our fiscal year 2005 annual audit plan. Our objectives were to determine whether the Authority improperly used Federal funds for expenses of its State programs, and whether it properly allocated salary and other expenses to its Housing Choice Voucher program and Public Housing Operating Fund program.

The Authority did not administer its federal funds in compliance with the financial provisions of its annual contributions contracts. Specifically, the Authority used its Public Housing Operating Funds to pay expenditures for state-subsidized housing programs and other federal programs, and did not properly allocate salary and benefit expenses to its Housing Choice Voucher program and Public Housing Operating Fund program.

These conditions occurred because the Authority did not follow the internal controls that it established to ensure compliance with its annual contributions contracts and HUD regulations. The Executive Director stated that he made a decision to loan Public Housing Operating Fund reserves to pay state expenses until the state reimbursed the Authority for its expenses. Also, the salary and benefits were not charged to the programs using a supported basis to ensure that only reasonable costs were charges for the operation of the programs. As a result, the Authority did not have more than $1.9 million available for its Public Housing Operating Fund program. Additionally, without an adequate basis, the Authority could not support the salary and benefits expenses charged to its Housing Choice Voucher and Public Housing Operating Fund programs.

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

• Cease the practice of using Public Housing Operating funds to pay for nonprogram costs, such as the $1.9 million used from and owed to the Public Housing Operating Fund program as of August 31, 2005.

• Reimburse its revolving fund the amounts owed by its programs on a monthly basis.

• Conduct a time study to determine the appropriate allocation of salaries and benefits for its federal programs.

• Develop and implement a HUD-approved cost allocation plan for salaries and employee benefits, and adjust its fiscal year 2006 accounting records accordingly.

Issue Date: August 31, 2005
Audit Report No.: 2005-BO-1005
File Size: 362.21KB

Title: Inappropriate Use of Federal Funds Led to $3.5 Million Deficit in HUD Programs Administered by Fall Rivers Housing Authority, Fall Rivers, Massachusetts

We reviewed the Housing Choice Voucher, the Public Housing Operating Fund, and the Public Housing Capital Fund programs at the Fall River Housing Authority (Authority). The audit was conducted as part of our fiscal year 2005 annual audit plan. Our objective was to determine whether the Authority used its federal funds in compliance with the financial provisions of its annual contributions contracts.

The Authority did not administer its federal funds in compliance with the financial provisions of its annual contributions contracts. The Authority used federal funds to pay expenditures for state-subsidized housing programs This condition occurred because the Authority failed to follow the internal controls that it established to ensure compliance with its annual contributions contracts and prevent the use of federal funds to pay state program expenses. As a result, the Authority did not have $3.5 million available to administer its federal programs. Additionally, the Authority over reported its voucher utilization because it did not have adequate controls to ensure accurate reporting of voucher utilization.

We recommend that the director of the Office of Public Housing require the Authority to
� Repay $3,530,080 taken from the federal programs);
� Strengthen its controls over tracking and reporting of federal funds; and
� Establish adequate controls to ensure accurate reporting of Section 8 housing choice voucher utilization.

Issue Date: January 19, 2005
Audit Memorandum No.: 2005-BO-1002
File Size: 700KB

Title: Massachusetts Housing Finance Agency - Multifamily Property Demonstration Disposition Program

We audited the Demonstration Disposition (Demo-Dispo) program administered by Massachusetts Housing Finance Agency (Agency). The objective of our audit was to determine the propriety of the use of funds under the U.S. Department of Housing and Urban Development's (HUD) Demo-Dispo program by the Agency and the extent of the Agency's oversight of the program. Under the Demo-Dispo program, HUD provided the Agency more than $535 million during the 10-year period ended May 2004. As a result of HUD investing over $535 million under the program, HUD gained 11 revitalized properties with 1,850 units. Our review disclosed that the costs charged by the Agency for the expenses reviewed were supported and reasonable and met the requirements of the agreement between HUD and the Agency.

Issue Date: December 16, 2003
Audit Memorandum No.: 2004-BO-1801
File Size: 196.7KB

Title: Audit Survey of Boston Housing Authority's - Capital Fund Program

We performed an audit survey of the Boston Housing Authority's (BHA) Capital Fund Program (CFP) procurement process. The audit objective was to assess the appropriateness of the BHA's CFP procurement process, for the period April 1, 2000 through March 31, 2003, to ensure that the BHA was:

� Assessing management controls to safeguard CFP funds from possible waste, loss, and misuse of funds.

� Managing its CFP program and operations efficiently, effectively, and economically.

� Adhering to the terms and conditions of the Voluntary Compliance Agreement (VCA) that was created because the needs for accessible units for persons with impairments were not adequately being met.

� Complying with the terms and conditions of its Annual Contributions Contract, HUD's Capital Fund Program regulations, Massachusetts General Law 30B - Uniform Procurement Act, Chapter 149, Sections 44A-J, Competition for Bidders on Construction, and HUD requirements under 24 CFR 85.36.

Issue Date: December 10, 2003
Audit Report: 2004-BO-1005
File Size: 5582KB

Title: Springfield Housing Authority Springfield, Massachusetts

We completed an audit of the Springfield Housing Authority (SHA), located in Springfield, Massachusetts. The primary purpose of our audit was to determine whether the SHA is administering its public housing and Section 8 programs efficiently, effectively, economically, and in compliance with the terms and conditions of its Annual Contributions Contract, applicable laws, HUD regulations and other applicable directives.

Our report contains eight findings with recommendations requiring action by your office. The eight findings address: (1) Housing Quality Standards; (2) Conflicts of Interest; (3) Capital Fund Program; (4) Management Controls; (5) Cost Allocation; (6) Section 8 Rent Reasonableness; (7) Inaccurate Performance and Financial Data; and (8) Contract Procurement and Program Monitoring.

Issue Date: November 7, 2003
Audit Report: 2004-BO-1003
File Size:2.24MB

Title: City of Springfield, Massachusetts,Selected Activities funded through the Community Development Block Grant, HOME Grant, and Urban Development Action Grant, Springfield, Massachusetts

We reviewed 33 loans awarded by the City of Springfield (City) that were funded through Community Development Block Grants, HOME grants, and miscellaneous income generated by Urban Development Action Grants during the period January 1, 1996 through March 31, 2001. The 33 loans totaled $691,803. Our review was initiated as a result of several newspaper articles, which reported allegations that the Springfield, MA Office of Community Development was misusing Federal funds. Our primary objective was to determine whether certain loans were awarded in accordance with the City's policies, the City's procedures, and applicable HUD regulations. Our review was limited in nature and focused on specific loans within the City's community development programs. The issues identified in our report deal with administrative and internal controls activities that we feel are necessary to bring to the City's attention now, even though many issues surrounding the City's management actions remain a continuing interest to our office as well as other Federal agencies. This report does not absolve or exonerate any individual or entity from civil, criminal or administrative liability or claim resulting from future actions by the Department of Housing and Urban Development and other Federal agencies. Our audit disclosed problems with the City's management of Community Development Block Grants (CDBG), HOME funds, and miscellaneous income generated by the Urban Development Action Grants (UDAG). The City did not always comply with its own policies and procedures, follow HUD program requirements, or maintain essential documentation. In addition, the City lacked effective internal controls in some areas. Of the $691,803 in costs reviewed, we questioned $674,194.

Issue Date: September 25, 2003
Audit Memorandum Report: 2003-SE-1004
File Size: 115.6KB

Title: CW Capital LLC Multifamily Accelerated Processing Lender
Needham, Massachusetts

In accordance with the OIG's Audit Plan, we completed an audit of CWCapital LLC, a Multifamily Accelerated Processing (MAP) lender. Our audit objectives were to determine if CWCapital's: (1) MAP application met HUD requirements; (2) procedures provide reasonable assurance that HUD requirements where being met during the construction phase of the MAP loan; (3) underwriter estimates are accurate as a measurement of the quality of its loan underwriting; and (4) management control procedures were adequate to ensure compliance with Departmental and MAP processing requirements. The audit found that CWCapital's MAP application and procedures during the construction phase met HUD requirements, and its loan underwriting estimates were reasonable. Although CWCapital complied with its Quality Control Plan, changes can be made to enhance its MAP loan process. This report includes a recommendation to improve CWCapital's MAP loan process.

Issue Date: July 17, 2003
Audit Memorandum Report: 2003-BO-1004
File Size 1.04MB

Title: Review of the Portability Features of the Section 8 Housing Choice Voucher Program Brockton Housing Authority, Brockton, Massachusetts

As part of our audit on Public Housing Authorities (PHAs) in Massachusetts and their administration of the mobility/portability features of Housing Choice Vouchers, we performed a limited review of the Brockton Housing Authority. Our objectives were to determine whether the Brockton Housing Authority was administering the mobility/portability features of these vouchers effectively and efficiently, and to ensure that: (1) HUD is not reimbursing both the initial and receiving PHAs for the same family; (2) The initial and receiving PHA are not using separate Section 8 vouchers for the same family, thereby unnecessarily reducing the number of vouchers available to other needy families; and (3) Families terminated from the receiving PHA's Section 8 program are removed from the reimbursement rolls of the initial PHA.

Issue Date: May 2, 2003
Memorandum Report No.: 2003-B0-1801
File Size: 148.2KB

Title: Review of the Portability Features of the Section 8 Housing Choice Voucher Program - Revere, MA Housing Authority

We completed our review of the administration of the portability features of the Section 8 Housing Choice Voucher Program by initial and receiving housing authorities at the Revere, MA Housing Authority. The overall objective of our review was to determine whether the Revere, MA Housing Authority is administering the portability features of Housing Choice Vouchers effectively and efficiently. Based on our review, we determined that the Revere, MA Housing Authority's Section 8 Management administers the portability features of the Housing Choice Voucher Program effectively and efficiently.

Issue Date: September 30, 2002
Audit Report No.: 2002-BO-1004
File Size: 531KB

Title: Congressionally Requested Audit of the Outreach and Training Assistance Grant Awarded to the Anti-Displacement Project Springfield, Massachusetts Grant Numbers FFOT98013 and FFOT00019

We completed an audit of two Outreach and Training Assistance Grants (OTAG) awarded to the Anti-Displacement Project (Grantee). The review was performed at the request of Congress. Our audit objective was to determine if the Grantee used Section 514 grant funds for only eligible activities as identified in the Multifamily Assisted Housing Reform and Affordability Act (MAHRA), Notice of Funds Availability (NOFA), and grant agreements between HUD and the Grantee to further the Mark-to-Market Program. We also determined if the Grantee expended Section 514 funds for any lobbying activities. Congress specifically identified lobbying as an ineligible activity under MAHRA The audit determined that the Grantee: 1) charged ineligible travel and conference costs to OTAG; 2) incurred questionable costs for Consultant Services; and 3) charged unallowable lobbying activities to the grants.

Section 1303 of the 2002 Defense Appropriation Act (Public Law 107-117) requires the HUD Office of Inspector General to audit all activities funded by Section 514 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA). The directive would include the Outreach and Training Assistance Grants (OTAG) and Intermediary Technical Assistance Grants (ITAG) administered by the Office of Multifamily Housing Assistance Restructuring (OMHAR). Consistent with the Congressional directive, we reviewed the eligibility of costs with particular emphasis on identifying ineligible lobbying activities.

Issue Date: September 30, 2002
Audit Report No.: 2002-BO-1005
File Size: 901KB

Title: Chelsea Housing Authority Chelsea, Massachusetts

We performed an audit of the Chelsea Housing Authority (CHA). Our audit objectives were to determine whether the CHA was administering its public housing and Section 8 programs in an efficient, effective and economical manner, and whether the CHA was complying with the terms and conditions of its Annual Contributions Contract (ACC), applicable laws, HUD regulations and other applicable directives.

We determined that the CHA needs to:

* Effectively manage its Section 8 vouchers,

* Grant tenants in Federal family projects an allowance for maintenance and replacement of a refrigerator when CHA does not provide one,

* Reconcile its Capital Fund Program (CFP) account.

Issue Date: August 29, 2002
Audit Report No.: 2002-BO-1802
File Size: 196KB

Title: Review of Boston Affordable Housing Coalition Outreach and Training Assistance Grants FFOT98014MA and FFOT00018MA.

As required by Public Law 107-117, we completed an audit of the Outreach and Training Assistance Grants (OTAG) awarded to Boston Affordable Housing Coalition (BAHC) doing business as Massachusetts Alliance of HUD Tenants. The overall objective of the review was to determine if BAHC used Section 514 grant funds for only eligible activities as identified in the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA), Notices of Fund Availability and grant agreements between HUD and BAHC to further Mark-to-Market Program. The audit disclosed that BAHC used Section 514 grant funds for eligible activities to further the Mark-to-Market Program in accordance with the applicable Notices of Fund Availability and their grant agreements.

Issue Date: March 27, 2002
Audit Report No.: 2002-BO-1001
File Size: 1057KB

Title: City of Worcester, Worcester, Massachusetts Community Development Block Grant Program

We conducted an audit of the Community Development Block Grant (CDBG) Program awarded to the City of Worcester, Massachusetts (Grantee). This audit was requested by the HUD Massachusetts State Office, Office of Community Planning and Development (CPD). CPD officials expressed concern with the Grantee's reorganization of its former Office of Planning and Community Development (OPCD), and OPCD's responsibility for the administration of the CDBG Program.

The primary objective of our audit was to determine whether the reorganization of OPCD was effective, and allowed the Grantee to maintain its ability to follow HUD CDBG requirements. Specifically, our audit determined whether the Grantee:

* Carried out its CDBG activities in an economical, efficient, and effective manner; * Complied with the CDBG Program requirements, laws and regulations; and
* Maintained adequate controls to ensure compliance with HUD regulations.

Issue Date: May 17, 2001
Audit Memorandum No.: 2001-BO-1803
File Size: 52KB

Title: Department of Housing and Community Development, HOME Program, State of Massachusetts, Boston, Massachusetts

We completed an audit survey of the State of Massachusetts' HOME Program administered by the Department of Housing and Community Development (DHCD). Our objectives were to determine whether DHCD was administering the HOME Program in compliance with HUD requirements and whether HOME funds were efficiently and effectively used to expand the supply of decent, safe and affordable housing for low and very low-income households.

Our survey found that DHCD was: (1) administering the HOME Program in compliance with HUD requirements; and (2) efficiently and effectively utilizing HOME funds to expand the supply of decent, safe and affordable housing for low and very low-income households.

Issue Date: April 2, 2001
Audit Report No.: 2001-BO-1004
File Size: 408KB

Title: Weymouth Housing Authority, Weymouth, Massachusetts

Our objectives were to determine if the WHA was operating its program in an efficient, effective and economical manner; and was complying with the terms and conditions of its Annual Contributions Contract, applicable laws, and HUD regulations.

The WHA has not developed an equitable method of allocating costs between Federal and State programs. In addition, the WHA allocated costs to a vacant Federal project in 1999. The inequitable allocation of costs resulted in the Federal programs being overcharged by approximately $78,000.

The WHA needs to improve its administration of the Section 8 Program by strengthening the procedures used for determining rent reasonableness; documenting the third party verification process; and conducting annual reexaminations in a timely manner. Two of the conditions (determining rent reasonableness and documenting the third party verification process) had been previously reported as findings in a 1999 Field Office review. Due to the weaknesses in the WHA's administration of the Section 8 Program there is limited assurances that the contract rents for the units are reasonable and that HUD and the tenants are paying the proper share of the rent.

The WHA inappropriately paid a former executive director $3,382 for unused vacation and sick leave contrary to personnel policies. The payment to the former executive director included $1,804 for vacation pay that had not been earned when he resigned and $1,578 in excess of the maximum $1,000 the WHA allows for sick leave. The WHA allocated $1,796 out of the $3,382 to Federal programs.

Issue Date: January 29, 2001
Audit Report No.: 2001-BO-1003
File Size: 277KB

Title: Audit of Multifamily Operations Bowdoin Apartments Malden, Massachusetts

We performed an audit on Bowdoin Apartments (Bowdoin), a multifamily project located in Malden, Massachusetts. We selected Bowdoin based on a low physical assessment obtained on a MSO Review, which reclassified the project to "troubled". Our objective was to assess Bowdoin's performance relating to: (1) general physical condition and maintenance of the project; (2) financial management; (3) leasing and occupancy, and (4) general management practices.

Bowdoin is correcting the maintenance deficiencies disclosed by the MSO. We noted no deficiencies in the use of project funds. However, our audit disclosed that Bowdoin needs to relocate over-housed households to reduce underutilization of apartments.

Our review disclosed that 21 of 226 apartments were underutilized contrary to HUD requirements. Based on household compositions, families are in apartments with too many bedrooms. Bowdoin had not established an effective transfer policy to address underutilization of units. Consequently, HUD is paying too much in subsidies for the number of tenants served and larger families are being restricted from appropriate size apartments.

Our review initially disclosed an underutilization of Section 8 subsidies under its HAP contract. Based upon Bowdoin's response, which shows sufficient effort was made to utilize its Section 8 subsidies, this issue has been removed from the report.

We recommend that Bowdoin revise their transfer policy to relocate families to appropriately sized units as such units become available, and submit quarterly progress reports on the progress in reducing underutilization.

On December 1, 2000, we provided Bowdoin a draft audit report for comments and received their response on December 29, 2000. Bowdoin's response is commented on in the Finding section of the report. A copy of the Bowdoin's response is included in Appendix A.

Issue Date: October 24, 2000
Audit Report No.: 01-BO-219-1001
File Size: 232KB

Title: Blue Hill Housing, Multifamily Project No. 023-36619, Dorchester, Massachusetts

We performed an audit on the Blue Hill Housing (BHH) multifamily project located in Dorchester, Massachusetts. We selected BHH for review based on a low REAC physical assessment. Our objective was to assess BHH's performance relating to maintaining the property, ensuring tenant eligibility, and using project funds appropriately.

We noted that deficiencies in property maintenance, disclosed in the REAC assessment, were being addressed by BHH. We noted no deficiencies in the use of project funds. However, our audit disclosed an underutilization of apartments.

Issue Date: August 16, 2000
Audit Report No.: 00-FW-222-1005
File Size: 1568KB

Title: Portnoy & Greene Closing Agent Contract, Boston, Massachusetts

We performed an audit of the law offices of Portnoy & Greene, P.C. (Portnoy & Greene), a closing agent for HUD, as part of a nationwide effort to review closing agents. Our audit objective was to determine whether management controls were adequate to ensure the prevention of fraud, waste, and abuse. To meet this objective, we performed audit steps to determine whether the closing agent complied with its contract terms and conditions. Overall, Portnoy & Greene's management controls were insufficient to ensure that it complied with its HUD contract. Instead, Portnoy & Greene's overall performance as a closing agent was substandard. In addition, we found that Portnoy & Greene was improperly collecting the full closing agent fee even though another entity performed the closing.

Issue Date: August 14, 2000
Audit Report No.: 00-BO-251-1802
File Size: 46KB

Title: Continuum of Care Program, City of Boston, Massachusetts

As part of a nationwide review of HUD's Continuum of Care Program, we audited two of the City of Boston's Continuum of Care Programs: Supportive Housing Program (SHP), and the Shelter Plus Care Program (SPC). Our objectives were to determine whether the City of Boston, Massachusetts is operating its Continuum of Care Programs in a manner that provides reasonable assurance that:

Funds are only expended for eligible activities and participants;
Costs are reasonable; Reported results are accurate;
Programs are sustainable;
Activities are carried out in a reasonable time frame;
Program funds are fairly distributed; and
Measurable results in addressing homelessness are obtained.

We have determined that the City of Boston as the Continuum of Care Provider has taken positive steps over its SPC. Steps initiated by DND ensures that the City of Boston is operating its Continuum of Care programs in a manner that provides reasonable assurances that the City is administrating its homeless programs effectively and efficiently.

Issue Date: December 30, 1999
Audit Report No.: 00-BO-255-1002
File Size: 1,536KB

Title: HOME Program, North Suburban Consortium, Malden, Massachusetts

We completed our audit of the North Suburban Consortium (NSC) HOME Program. Our objectives were to determine whether the NSC utilized its HOME funds in such a way that decent, safe, and affordable housing opportunities for very low and low-income families, in the member cities area, were expanded and whether the funds were used efficiently. We looked at both home-ownership and rental housing projects developed by the NSC.

We believe that the NSC utilized its HOME funds in an efficient and effective manner, however, we did find problems with NSC's administration of the program. This report contains four findings: 1) NSC does not have adequate support for administrative and project delivery costs charged to the program, 2) NSC is not inputting activity completion reports and program income data into the Integrated Disbursement and Information System, 3) NSC is not performing required monitoring to ensure that program requirements are met, and 4) NSC needs to improve its administration over program operations.

Issue Date: October 8, 1999
Audit Report No.: 00-BO-255-1001
File Size: 468KB

Title: HOME Program Holyoke/Chicopee Consortium Holyoke, Massachusetts

This report contains two findings. We found that although the Consortium managed the rental housing segment of its HOME Program effectively, its management of the home-ownership segment needs improvement. Specifically, we noted that of the four home-ownership projects reviewed, one of them did not have the necessary restrictions attached to it to ensure its long-term affordability in accordance with program requirements and the remaining three had restrictions attached to them that were either incorrect or unwarranted. As a result, the Consortium may have incurred $330,782 in ineligible HOME expenditures. We also found that HOME program income and its use was not properly accounted for or reported to HUD.

Issue Date: June 9, 1998
Audit Report No.: 98-BO-209-1005
File Size: 83KB

Title: Holyoke HA Public Housing Drug Elimination Program, Holyoke, MA

The PHA had not effectively evaluated its Program outcomes and did not report them to HUD in Semi Annual Performance Reports for the two year period of PHDEP grants, 1995 and 1996.

The Community Policing calls for additional police services to create drug and crime free environments and to provide protection to the residents in the developments. Our review disclosed that the HPD was not providing daily logs, time sheets and quarterly reports for PHA properties as required. Community Policing has received criticism from PHA officials and residents of public housing regarding the accessibility of police to the residents. As a result of our review, the Community Policing concept is now implemented, administered effectively and accurately reported to ensure program results are consistent with plan objectives. Although, the above conditions are implemented the PHA still needs to establish and implement a system to measure the effectiveness and performance of the program.

Issue Date: November 6, 1997
Audit Report Number 96-BO-101-0001
File Size: 85KB

Title: Housing Authority, Brockton, MA

We have concluded that the PHA misrepresented the facts in its Demolition Application. The actual condition of the project does not meet the statutory or regulatory requirement for demolition. The facts presented show that HUD needs to ensure that the project is not demolished and that $982,080 in Section 8 Vouchers and Certificates, provided for relocation assistance, is recaptured.

Issue Date: July 9, 1997
Audit Related Memorandum No. 97-BO-209-1803
File Size: 21KB

Title: Fall River HA, Fall River, MA

As a result of our review, we have determined that the Fall River Housing Authority has developed, implemented, and administered its PHDEP grants in an economical, effective, and efficient manner.

Issue Date: July 9, 1997
Audit Related Memorandum No. 97-BO-209-1802
File Size: 26KB

Title: New Bedford HA, New Bedford, MA

As a result of our review, we have determined that the New Bedford Housing Authority has developed, implemented, and administrated its PHDEP grants in an economical, effective, and efficient manner. Consequently, we are not making any recommendations in this report.

Issue Date: November 18, 1996
Audit Related Memorandum 97-BO-219-1801
File Size: 15KB

Title: Equity Skimming Review, Roxbury, MA

Indicators of potential equity skimming and expenses charged to the project which may be the responsibility of the owner, were identified.

Issue Date: October 17, 1995
Audit Related Memorandum No. 96-BO-212-1802
File Size: 12KB

Title: Charlesview Apts., Allston, MA

The project has not raised rents since 1991 and, therefore, is not generating sufficient income for repairs. The project currently needs over $3 million for repairs.

Issue Date: October 5, 1995
Audit Related Memorandum No. 96-BO-203-1801
File Size: 7KB

Title: Quincy HA., Quincy, MA

Our review disclosed that the QHA has adequate systems and procedures to administer its Section 8 Certificate Program in an effective and efficient manner. We found that, based on our sample, 64 percent of the Section 8 Certificate units exceeded the latest Fair Market Rents (FMRs). However, the QHA is aware of this and has taken the necessary steps to lessen its impact on the QHA's future Contingency Reserves, such as, not granting rent increases or annual adjustments to landlords.