Washington State Audit Reports
Date
issued: September 30, 2007
Audit
Report No.: 2007-SE-1004
File Size:4.2MB
Title:
The Tacoma Consortium, Tacoma, Washington, Did Not Properly Administered
Its HOME Investment Partnerships Program Grants
We audited
the Tacoma Consortium HOME Investment Partnerships Program as a
result of a risk assessment performed by HUD-OIG Region IX. Our
objective was to determine whether the Consortium complied with
HOME requirements, laws, and regulations with respect to the homeowner
rehabilitation program and HUD procurement regulations. The Consortium
generally administered HOME in accordance with HUD requirements
but violated HOME regulations when it drew down funds for a homeowner
who was not low income, for a homeowner whose income was not adequately
documented, for projects that were not completed to code, for luxury
improvements, and for rehabilitation activities that were not compliant
with HUD requirements or its own written rehabilitation standards.
In addition, contrary to HUD procurement regulations, the Consortium
did not perform an independent estimate or cost analysis to determine
whether contract change orders were reasonable. We recommended that
HUD require the Consortium to repay HOME from nonfederal funds $187,399
in ineligible costs, provide supporting documentation or repay from
nonfederal funds the $248,214 in unsupported costs, and require
the Consortium to implement policies and procedures so that its
grant activities are carried out in accordance with applicable laws,
regulations, and Consortium rehabilitation standards to put $263,458
in homeowner rehabilitation funds to better use over the next year.
Date Issued: September 5, 2007
Audit
Report No.: 2007-SE-1003
File Size: 226.19KB
Title:
The Vancover Housing, Vancover, Washington, Lacks Quality Control
Processing in It Housing Choice Voucher Program
We audited
the Vancouver Housing Authority to determine whether it procured
goods and services in accordance with U.S. Department of Housing
and Urban Development (HUD) requirements and whether it had pledged
HUD assets as security. We also audited the Authority's Housing
Choice Voucher program (program) to determine whether it operated
in accordance with HUD requirements.
The
Authority generally procured goods and services in accordance with
HUD regulations, had not pledged HUD assets as security for its
recent development projects, and generally operated its program
in accordance with HUD requirements. However, the Authority did
not perform quality control inspections of its housing quality standards
inspections to ensure the assisted units met housing quality standards
as directed by HUD. In addition, the Authority did not perform promised
tenant file reviews to ensure the files were complete and the housing
assistance payments were correctly calculated. We recommend that
six months after the issuance of this report, the director of the
Region X Office of Public Housing review the Authority's housing
quality standards quality control inspection program and tenant
file review program to confirm that these programs meet HUD requirements.
Date Issued: April 11, 2007
Audit Report No.: 2007-SE-1002
File Size: 240.1KB
Title: The Renton, Washington, Branch of Countrywide Home Loans,
Inc. Did Not Comply with HUD Guidelines in Underwriting Five Federal
Housing Administration-Insured Loans
We audited single-family loan origination at the Renton, Washington,
branch of Countrywide Home Loans Inc. (Renton branch) to determine
if they originated Federal Housing Administration-insured loans
in accordance with U.S. Department of Housing and Urban Development
(HUD) requirements. We found that the Renton branch did not comply
with HUD requirements in originating five of 22 Federal Housing
Administration-insured loans. By not establishing that the borrowers
had the ability and willingness to repay the mortgage debt and that
the insured property was sufficient collateral for the loan, the
Renton branch exposed the Federal Housing Administration insurance
fund to an unnecessary risk totaling $740,007, the total insured
amount for the five loans.
We recommended that the Assistant Secretary for Housing - Federal
Housing Commissioner require Countrywide to correct the deficiencies
or indemnify HUD for $207,947 for the five loans. This represents
the average loss should the Federal Housing Administration sell
the foreclosed properties.
Date Issued: January 12, 2007
Audit
Report No.: 2007-SE-1001
File Size: 465.03KB
Title: The YWCA of Seattle - King County - Snohomish County, Seattle,
Washington, Did Not Properly Administer Its Supportive Housing Program
Grants
As part of the Inspector General's annual audit plan, we audited
the YWCA of Seattle - King and Snohomish Counties (YWCA). Our audit
objective was to determine whether the YWCA administered its Supportive
Housing Program grants in accordance with HUD requirements, Office
of Management and Budget requirements, and the grant agreements.
The YWCA generally administered its Supportive Housing Program grants
in accordance with HUD requirements. However, it received $118,207
in excess funds because it did not provide a sufficient cash match
for one of its grants. It was also unable to support $68,783 in
labor costs charged to its grants. We recommend that HUD require
the YWCA to (1) repay $118,207 in grant funds expended without the
required cash match, (2) reimburse the grant and/or repay HUD from
nonfederal funds for the $68,783 in unsupported labor costs unless
it can provide adequate supporting documentation, and (3) implement
policies and procedures so that its grants are carried out in accordance
with applicable laws and regulations.
Date
Issued: September 18, 2006
Audit
Report No.: 2006-SE-1005
File Size: 72.95KB
Title: King County Housing Authority, Tukwila, Washington, Section
8 Program Meets HUD Requirements
As part of the inspector general's annual audit plan, we audited
the King County Housing Authority's (authority) Section 8 program
to determine whether it met U.S. Department of Housing and Urban
Development (HUD) requirements. The authority generally administered
its Section 8 program in accordance with HUD requirements. The authority
fairly selected families from the waiting list, ensured only eligible
families received assistance, generally calculated and paid the
correct housing assistance payments, properly managed its portability
program, and ensured that assisted units met housing quality standards.
Date Issued: June 21, 2006
Audit
Report No.: 2006-SE-1004
File Size: 265.91KB
Title: The Housing Authority of the City of Bremerton, Washington,
Inaccurately Reported Its 2005 Section 8 Management Assessment Program
Results
We audited the Housing Choice Voucher program of the Housing Authority
of the City of Bremerton (Authority) to determine if it complied
with U.S. Department of Housing and Urban Development (HUD) requirements.
While generally complying with HUD requirements, we found the Authority
incorrectly evaluated its Section 8 Management Assessment Program
quality control samples for waiting list selection and housing quality
standards enforcement. As a result, HUD, Authority management, and
the Authority's board of commissioners did not have the information
needed to identify and correct program weaknesses in the Authority's
Section 8 waiting list selection and enforcement of housing quality
standards. Further, the Authority's incorrect evaluation resulted
in HUD designating the Authority as a high performer when it should
have only qualified as a standard performer. We recommended that
HUD require the Authority to implement a formal process for its
Section 8 Management Assessment Progra
Date Issued: May 31, 2006
Audit
Report No.: 2006-SE-1003
File Size: 369.41KB
Title: Snohomish County's Office of Housing and Community Development,
Everett, Washington, Charged Ineligible Administrative Expenses
to its Community Development Block Grant
We audited the Snohomish County (County) Office of Housing and
Community Development to determine whether the County administered
its Community Development Block Grant and HOME Investment Partnership
Program in accordance with HUD requirements. We found that Snohomish
County generally administers its Community Development Block Grant
and HOME Investment Partnership Program grants in accordance with
HUD requirements. However, the County charged $67,339 of ineligible
administrative expenses to its Community Development Block Grant.
The County also extended the pay-off date for two Community Development
Block Grant float-funded activities without properly identifying
the loan extensions as a new activity, as required. We recommend
that HUD require the County to (1) reimburse its Community Development
Block Grant and/or repay HUD from nonfederal funds for the $67,339
in expenses related to ineligible administrative activities; (2)
establish and implement adequate procedures for charging administrative
costs that meet federal requirements; and (3) establish and implement
adequate procedures for its float loan program.
Date Issued February 27, 2006
Audit
Report No.: 2006-SE-1002
File Size: 332.22KB
Title: Northeast Washington Housing Solutions, Spokane, Washington,
Improperly Administered Housing Choice Vouchers
We audited the Housing Choice Voucher program of Northeast Washington
Housing Solutions (authority) to determine if it complied with U.
S. Department of Housing and Urban Development (HUD) requirements.
While generally complying with HUD requirements, we found they made
housing assistance payments of almost $450,000 for vouchers for
154 families whose eligibility was unknown. HUD paid the authority
more than $58,000 to administer these vouchers. In addition, we
found the authority did not correctly report its fiscal year 2005
Section 8 Management Assessment Program score, and that it does
not have an adequate plan for allocating indirect salary costs.
We recommended that the Region X Office of Public Housing require
the authority to determine the eligibility of the 154 families and
return any ineligible housing assistance payments. We also recommended
that HUD recoup the appropriate amount of administrative fees. In
addition, we recommended that HUD perform an on site verification
of the authority's 2006 Section 8 Management Assistance Program
score, and require the authority to submit a plan for allocating
indirect salaries.
Date Issued: September 30, 2005
Audit
Report No.: 2005-KC-1009
File Size: 272.55KB
Title: Washington Mutual Bank Did Not Follow HUD Regulations When
Underwriting Six Loans
HUD-OIG
reviewed 10 Federal Housing Administration loans that Washington Mutual
Bank (Washington Mutual) of Seattle, Washington, sponsored for a loan
correspondent that originated the loans. During our review of the
loan correspondent, we determined that these loans had a high risk
of being improperly originated. We concluded that Washington Mutual
did not comply with HUD regulations, procedures, and instructions
in the underwriting of six of the mortgages. The deficiencies involved
unverified property repairs required to support the appraised value,
unsupported income, improper refund of gift funds to the borrower,
unsupported assets, and questionable ownership of one subject property.
Washington Mutual also charged prohibited fees on five loans, three
of which were also identified as improperly underwritten loans.
We
recommended that the assistant secretary for housing - federal housing
commissioner take appropriate administrative action against Washington
Mutual for not complying with HUD underwriting requirements. This
action, at a minimum, should include requiring indemnification for
three actively insured loans with original mortgage amounts totaling
$223,476, two loans on which HUD has incurred losses of $87,639,
and one loan that is overinsured by $1,425.
Washington
Mutual agreed with our conclusions and to indemnify HUD for potential
losses on loans currently insured, and losses already incurred.
Date Issued: September 16, 2005
Audit
Report No.: 2005-SE-1007
File Size: 613.45KB
Title: City Bank - Puyallup, Washington, Branch Did Not Comply
with HUD Requirements in the Origination of Insured Loans
We
audited City Bank's Puyallup, Washington branch office because it
had one of the highest defaults to claim percentages for the Department
of Housing and Urban Development (HUD) approved lenders located
within the state of Washington. Our objectives were to determine
whether City Bank's Puyallup branch originated HUD-insured loans
in accordance with HUD requirements and prudent lending practices.
Our audit disclosed that City Bank did not originate 10 of the 24
loans in our sample in accordance with HUD requirements or prudent
lending practices. Specifically, the 10 loans contained deficiencies
that should have precluded their approval. These deficiencies included
loans with excessive debt-to-income ratios and no valid compensating
factors; lack of borrower income stability; improper source of funds
verification, unacceptable borrower credit histories, and deficient
appraisal reviews by the underwriter.
We
attributed these deficiencies to City Bank's failure to use due
care when originating the loans compounded by its failure to develop
and implement an acceptable quality control plan. As a result, City
Bank placed HUD's Single Family Insurance Fund at risk for 10 unacceptable
loans with original mortgages totaling $1,525,007. Currently, HUD
remains at risk or has incurred losses totaling $1,418,056 relating
to these 10 loans.
We
recommend that HUD take appropriate administrative action against
City Bank, as available under the Mortgage Review Board, and/or
other authority. At a minimum, this action should include seeking
appropriate reimbursement and/or indemnification totaling $1,418,056
for the 10 loans that were improperly originated and underwritten,
including $625 in loss mitigation costs related to one of the 10
loans.
Date Issued: July 05, 2005
Audit
Report No.: 2005-SE-1006
File Size: 1036KB
Title: Washington Mutual Bank, Seattle, WA, Washington Mutual
Bank Submitted 609 Late Endorsement Loans with Unacceptable Payment
Histories
We
audited late endorsement payment histories at Washington Mutual
Bank (Washington Mutual), Seattle, Washington. We selected Washington
Mutual because of its high number of late single-family loan submissions
for Federal Housing Administration insurance during calendar years
2002 and 2003. Our objective was to determine whether Washington
Mutual's late requests for endorsement complied with the U.S. Department
of Housing and Urban Development's (HUD) payment history requirements.
From March 2002 to October 2004, Washington Mutual improperly submitted
609 loans to HUD, totaling more than $69 million, for insurance
endorsement when the borrowers had delinquent payments within six
months before the submission date. This occurred because Washington
Mutual did not have adequate controls to ensure that its employees
followed HUD's requirements regarding late requests for insurance
endorsement. We recommend that HUD take appropriate administrative
action up to and including recovery of losses on $1,091,214 in paid
claims and indemnification of loans with a total mortgage value
of $18,695,819 against future losses that were not current when
submitted for endorsement. We also recommend that HUD take appropriate
administrative action against Washington Mutual for violating the
requirements in effect at the time when it submitted loans without
proper six month payment histories.
Date Issued: May 24, 2005
Audit
Report No.: 2005-SE-1005
File Size: 410KB
Title: The Housing Authority of the City of Tacoma Could Improve
Its Section 8 Program
We audited the Housing Choice Voucher program of the Housing Authority
of the City of Tacoma to determine whether the Authority has adequate
internal controls to operate its Section 8 program, in accordance
with HUD requirements. While the Authority generally has adequate
internal controls, we found that they did not adequately address
more than $30,000 of excess housing assistance payments to landlords,
and did not properly document their fiscal year Section 8 Management
Assessment Program quality control reviews. We recommended that
HUD require the Authority to institute processes to correct these
deficiencies, and to recoup any of the excess housing assistance
payments that are ineligible.
Date Issued: March 24, 2005
Audit
Report No.: 2005-SE-1004
File Size: 905.89KB
Title: Wells Fargo Bank NA, Fife Branch, Fife, WA, Supervised
Mortgagee - Loan Underwriting
We audited Wells Fargo Bank NA's Fife Branch Office because of
the high rate of claims on defaulting Federal Housing Administration-insured
single-family loans approved by this branch. Our audit objective
was to determine whether Wells Fargo-Fife acted in a prudent manner
and complied with HUD regulations, procedures, and instructions
in its approval of the Federal Housing Administration-insured single-family
mortgages selected for review and whether the mortgagee's quality
control plan, in relation to the loans reviewed, met HUD requirements.
Date Issued: December 16, 2004
Audit
Report No.: 2005-SE-1002
File Size: 338KB
Title: National City Mortgage Company, Federal Way Branch Nonsupervised
Single-Family Mortgagee - Loan Origination
We
audited National City Mortgage's Federal Way Branch Office because
there had been no prior reviews by HUD's Quality Assurance Division
or the OIG, and because the Federal Way Branch had 25 defaults in
the last 2 years.
The audit objectives were to determine whether the Federal Way Branch
acted in a prudent manner and complied with HUD requirements in
originating FHA single-family mortgages, and whether the Branch's
quality control plan met HUD requirements.
Date Issued: October 21, 2004
Audit
Report No.: 2005-SE-1001
File Size: 1003KB
Title: Tulalip Tribes Housing Authority Cannot Account for Grant
Funds
To
address Office of Inspector General concerns regarding regulatory
and administrative violations in the Tulalip Tribes Housing Authority's
accounting records, we audited the Authority's Indian Housing Block
Grant program.
The audit objectives were to determine whether the Authority established
and operated its program in accordance with HUD requirements for
financial management systems.
Date
Issued: August 19, 2004
Audit
Report No.: 2004-SE-1006
File Size: 3.44MB
Title: Apreva, Inc., Non-Supervised Mortgagee, Bellevue, Washington
We
completed an audit of Apreva, Inc. in Bellevue, Washington. Apreva
is a non-supervised mortgagee approved by HUD to originate and approve
FHA-insured loans under HUD's Single Family Direct Endorsement Program.
The audit objectives were to determine if (1) Apreva complied with
HUD regulations, procedures, and instructions in the origination
and approval of Federal Housing Administration (FHA) loans, and
(2) Apreva's Quality Control Plan, as implemented, met HUD requirements.
Date
Issued: May 21, 2004
Audit
Report No.: 2004-SE-1004
File Size: 4.57MB
Title: Seattle Housing Authority,
Moving To Work Demonstration Program
Seattle, Washington
We
completed an audit of the Seattle Housing Authority's (Authority)
Moving To Work Demonstration Program (MTW Program). The audit objectives
were to determine if the Authority's MTW Program activities furthered
the purpose of the Program and were carried out in compliance with
Program agreements. The Authority's Program included 17 activities,
8 of which the Authority actually implemented.
Date
Issued: October 22, 2003
Audit
Report No.: 2004-SE-1001
File Size: 241KB
Title: Complaint regarding the Seattle Housing Authority's procurement
for Section 8 project-based vouchers, and conduct issues regarding
conflict of interest and lobbying Seattle, Washington
In
response to a citizen's complaint, we conducted an audit of the
Seattle Housing Authority's procurement process to determine if
the Authority (1) followed applicable federal program procurement
requirements and its own procurement policy when it awarded a Section
8 project-based contract to YWCA, (2) Request for Proposals evaluators
were coerced into changing scores so that the Authority could commit
to project-based Section 8 vouchers through YWCA, and (3) PorchLight
Housing Director complied with federal and local conflict of interest
rules and lobbying restrictions.
Our audit results indicated that the complaint was not valid. The
evidence did not indicate proposal evaluators were coerced into
changing scores, nor did the Authority PorchLight Housing Director
violate federal conflict of interest rules or lobbying restrictions.
However, during the review we found that the Authority improperly
waived part of its published contracting requirements when it awarded
Section 8 project-based vouchers to the YWCA. Because the Authority
did not provide other potential applicants with the opportunity
to submit proposals based on the waived requirements, the procurement
process was neither open nor fair to all possible proposers. This
occurred because the Authority did not have clear and specific controls
to ensure that the requirements of the Request for Proposals were
followed when determining eligibility of proposals. We are recommending
that HUD determine if the Authority has implemented policies and
procedures to ensure that procurements are performed fairly, in
an open and equitable manner, and require the Authority to implement
controls, if appropriate.
We provided the Authority Board and management officials with a
discussion draft report on August 7, 2003, and discussed the finding
with them at an August 18, 2003 exit conference. On August 22, 2003
we issued a formal draft report to the Authority, and they provided
a written response on September 10, 2003. In their verbal and written
comments, Authority officials expressed disagreement with the audit
results. They indicated that the Authority actions regarding the
processing of the voucher applications were appropriate and in the
best interest of the Authority and its clients. The finding section
of this report summarizes and evaluates the Authority's comments.
A copy of the Authority's full response is included in Appendix
A.
Date Issued: May 29, 2003
Audit
Report No.: 2003-SE-1003
File Size: 600KB
Title: Seattle Housing Authority's Administration of the Welfare-to-Work
Section 8 Tenant-Based Assistance (WtW) Program
Seattle, Washington
In response
to a citizen's complaint, we conducted an audit of the Seattle Housing
Authority's administration of its HUD-subsidized Welfare-to-Work
Section 8 Tenant-Based Assistance (WtW) Program. The complaint alleged
that the Seattle Housing Authority (Authority) is not properly administering
its WtW program when selecting program voucher recipients, and procuring
the services of nonprofit organizations to assist and recruit prospective
WtW program applicants. We found that the complaint was generally
valid. We believe that in its haste to get its Welfare to Work program
vouchers leased up by the deadline, the Authority disregarded program
requirements, and did not provide adequate management oversight
over program implementation. As a result, the Authority did not
achieve the objective of the WtW program to assist eligible families
in transitioning from welfare to work. In addition, the Authority
denied many long-time Section 8 Waiting List applicants the opportunity
to participate in a program that would help them transition from
welfare to work. Also, although the Authority followed its procurement
requirements, it spent $130,391 of WtW funds on ineligible costs.
We are recommending that HUD require the Authority to take corrective
action to comply with WtW program requirements and reimburse the
program for ineligible costs. Also, we are recommending that HUD
review the Authority's performance as a designated Moving to Work
(high performer) authority.
Date Issued: March 11, 2003
Audit
Memorandum No.: 2003-SE-0801
File Size: 78.8KB
Title: Survey of the Housing Authority of the City of Bremerton's
Performance as Contract Administrator for HUD's Section 8 Project-Based
Assistance Program for the State of Washington
We completed
a review of the Housing Authority of the City of Bremerton's (Authority)
performance as the Contract Administrator for HUD's Section 8 Project-Based
Assistance Program. The survey objective was to determine if the
Authority is effectively administering HUD's Project-Based Section
8 contracts in accordance with the Annual Contributions Contract
(ACC). We found that the Authority had effectively administered
Section 8 project-based assistance, generally complied with the
ACC, and had processes and controls in place to administer HUD's
Section 8 project-based assistance program. During our review, we
found three minor deficiencies that we discussed with Authority
and HUD officials.
Date Issued: January 31, 2003
Audit
Memorandum No.: 2003-SE-1801
File Size: 84KB
Title: HOME Program and CDBG Funds Provided
to the Community Resource Center in Bremerton, Washington
At the request of the Office of Investigation, we reviewed the
flow of HUD funds to the Community Resource Center (CRC), a Community
Housing Development Organization (CHDO) to determine the amount
and disposition of HUD funding provided to the CRC. We found that
HUD provided the CRC $317,823 in HOME Program and CDBG funds through
Kitsap County and the City of Bremerton between January 1999 and
September 2001. However, available supporting CRC records were inadequate
and incomplete, so that we could not determine the amount of eligible
expenditures. In general, the CRC's records show its financial management
system does not meet federal requirements.
Date Issued: December 2, 2002
Audit
Memorandum No.: 2003-SE-1002
File Size: 895KB
Title: Congressionally Requested Audit
of the Outreach and Training Assistance Grants (numbers FFOT98030WA
and FFOT00040WA) and Intermediary Technical Assistance Grant (numbers
MTMWAPEG00017 and MTMWAPEG01015) awarded to the Tenants Union, Seattle,
Washington
We completed an audit of the Tenants Union and Washington Low Income
Housing Network's Outreach and Training Assistance Grants (OTAG).
The Tenants Union and Washington Low Income Housing Network (Network)
jointly submitted the grant applications. The HUD grant agreements
identify the Tenants Union as the grantee. The Washington Low Income
Housing Network performed OTAG work as a sub-grantee to the Tenants
Union. We also audited the Tenants Union's two Public Entity Grants
received through an intermediary as part of HUD's Intermediary Technical
Assistance Grant (ITAG) program. The audit determined that the Tenants
Union participated in lobbying activities, contrary to the enabling
legislation and Office of Management and Budget (OMB) Circular A-122.
Further, neither grantee fully complied with HUD and OMB Circular
A-122 cost allocation requirements, resulting in $127,804 of ineligible
and questionable labor costs charged to the OTAG grants. The grantees
also charged $36,394 of other ineligible and questionable expenses
to the grants. Our report contains seven recommendations to address
the issues identified in the report and other recommendations to
strengthen management controls over the grantees.
Date Issued: August 15, 2001
Audit
Report No.: 2001-SE-251-1001
File Size: 527KB
Title: Supportive Housing Program Grants Administered by the
City of Seattle as Part of the Seattle-King County Continuum of
Care Strategy
As part of a nationwide review of HUD's Continuum of Care Program,
we audited two Supportive Housing Program grants awarded to the
City of Seattle as part of the Seattle-King County Continuum of
Care Strategy. We performed the audit to determine if the City has
adequate management controls and is properly administering the program.
Generally, we found that the
Seattle Continuum of Care programs are properly administered, program
funds are expended in a timely fashion, and administrative costs
did not exceed HUD's limits. However, we found that the City had
management control deficiencies and did not always comply with HUD
requirements. Specifically, the City (1) did not adequately monitor
subgrantees, (2) assisted ineligible participants, (3) charged questionable
administrative costs, and (4) did not provide adequate evidence
of measurable results.
Date Issued: September 29, 2000
Audit
Report No.: 2000-SE-207-1001
File Size: 1126KB
Title: Housing Activities Administered by Lummi Indian Business
Council, Bellingham, WA
In response to complaints from Lummi tribal members, we performed
an audit of the Lummi Nation's housing program operation in which
we addressed some of the many tribal members' allegations of program
mismanagement, misuse and abuse at the Lummi Indian Business Council
(LIBC).
LIBC is the management organization of the Lummi Nation. The overall
objective of the audit was to determine if LIBC has the administrative
capacity to carry out eligible housing activities in accordance
with the requirements and objectives of the Native American Housing
Assistance and Self-Determination Act of 1996 (NAHASDA) and other
applicable laws. LIBC has not demonstrated the managerial expertise,
knowledge of program requirements, or administrative capacity to
properly administer affordable housing activities effectively, making
LIBC vulnerable to waste, fraud, and mismanagement. LIBC does not
have an adequate internal control system to provide reasonable assurance
regarding (a) the reliability of financial reporting, (b) the effectiveness
and efficiency of operations, and (c) compliance with applicable
laws and regulations. Therefore, LIBC must take immediate and effective
measures to become administratively capable as defined in NAHASDA
regulations, including implementing an adequate system of internal
control.
Additionally, although a Lummi Nation resolution indicates the
tribe will operate its housing program as a separate Tribally Designated
Housing Entity (TDHE), in practice the tribe operates the housing
program as a division of LIBC and not as a TDHE. The Lummi Nation
should decide whether to operate its housing program as a TDHE or
as a division of LIBC, and fully implement its decision. (See Finding
1)
As a result of its lack of administrative capacity Lummi Indian
Business Council:
did not ensure that low-income Lummi families live in safe and
healthy housing conditions. LIBC needs to maintain its housing stock,
including abandoned houses, in a safe and healthy environment. (See
Finding 2)
overstated its housing stock, resulting in overfunding of its
NAHASDA grants. HUD should require LIBC to remove 95 units from
its formula current assisted stock and repay $1,279,768 of HUD overfunding.
(See Finding 3)
misspent, mischarged, and wasted federal funds when it:
improperly charged other federal programs $14,606 for use of equipment
purchased with HUD funds. LIBC should repay from non federal sources
$4,669 to the Bureau of Indian Affairs and $9,937 to Health and
Human Services for fees it inappropriately charged for rental of
equipment purchased with HUD funds. (See Finding 4)
did not properly account for program income generated by equipment
purchased with HUD funds. LIBC should reimburse its housing program,
from non-federal sources, $5,964 for program income generated by
renting equipment purchased with HUD funds. (See Finding 4)
did not maintain adequate documentation to support expenses charged
to its grants. LIBC needs to provide adequate documentation or repay,
from non-federal sources, $25,382 for unsupported costs charged
to the Indian Community Development Block Grant. (See Finding 5)
and
did not accurately record, adequately support or correctly charge
labor costs to federal grants. We recommend HUD require LIBC to
immediately implement an adequate time keeping system that ensures
accurate labor charging and repay $18,814 for labor unrelated to
its HOPE I grant. (See Finding 7)
did not adequately safeguard assets by not tracking materials
inventory. LIBC must immediately implement an inventory system that
accounts for materials received, used, and stored and provides for
periodic monitoring and reconciliation. (See Finding 6)
did not maintain adequate procurement records. LIBC should implement
procedures and a system of internal controls that ensures that procurements
are made in accordance with federal regulations. (See Finding 8)
may have admitted ineligible families into its housing program
because it does not always verify family income. LIBC needs to implement
an adequate system of internal control ensuring that it verifies
all sources of an applicant's family income. (See Finding 9)
excluded eligible applicants when it combined its waiting lists.
LIBC should review all open applications and ensure the waiting
list is complete and appropriately ranks all applicants. It should
also implement controls and procedures to ensure that the application
process is complete and accurate. (See Finding 10)
thwarted the purpose of the Mutual Help Homeownership program
by allowing improper subleases. LIBC should terminate two improperly
approved subleases, review the three unapproved subleases, and recertify
and begin receiving payments from the homebuyers for all existing
subleases. (see Finding 11)
We discussed the findings with Lummi Indian Business Council officials
during the course of our audit and at an exit conference on September
11, 2000. On September 1, 2000, we provided LIBC with draft findings,
and received LIBC's written response to the draft findings on September
22, 2000. The Findings section of this report summarizes and evaluates
LIBC's comments. LIBC agreed with several of the findings, but disagreed
with our overall conclusion that it lacks the administrative capacity
to manage federal grants. A copy of LIBC's full response, without
attachments, is included in Appendix B. The attachments included
with the written comments are available upon request. In addition,
the HUD Northwest Office of Native American Programs (NwONAP) also
provided written comments on the draft findings. NwONAP generally
agreed with the findings (see Appendix C).
Date Issued: January 19, 2000
Audit
Report No.: 2000-SE-209-1801
File Size: 353KB
Title: Seattle Housing Authority, Holly Park Hope VI Revitalization,
Complaint Alleging Conflict of Interest
In response to a citizen's complaint, we conducted a limited review
of the Holly Park HOPE VI project. The complaint alleged that the
Seattle Housing Authority (Authority) violated HUD conflict of interest
requirements when it awarded contracts for the Holly Park implementation.
Our review found that the Authority did not comply with HUD conflict
of interest requirements in awarding two of these contracts, and
another contract not included in the complaint. Specifically, the
Authority awarded these three contracts to firms whose principals
had inside knowledge of the project. This occurred because the Authority
either ignored or was unaware of the conflict of interest provisions
included in the HOPE VI planning and implementation Grant Agreements.
These provisions prohibited the Authority from awarding contracts
to individuals in a position to gain inside information. Conflicts
of interest may jeopardize public trust in government and affect
the impartiality of contract awards. Attachment A discusses in detail
the results of our review.
Date Issued: March 31, 1999
Audit
Report No.: 99-SE-207-1002
File Size: 223Kb
Title: Citizen Complaint, Cascade Inter-Tribal Housing Authority,
Sedro Woolley, WA
We performed an audit at the Cascade Inter-Tribal Housing Authority
to evaluate allegations in a complaint received from a citizen.
The complainant alleged waste and mismanagement when awarding a
construction contract, and using a consultant.
The allegation relating to the award of a construction contract
was not valid. However, we did find that the allegation relating
to use of a consultant had merit.
Issue Date: November 20, 1998
Audit
Report No.: 99-SE-155-1001
File Size: 373KB
Title: City of Seattle HOME Program
The City did not have controls to ensure that subrecipients under
its HOME rental development program continued to provide decent,
safe, sanitary, and affordable housing. Specifically, the City did
not have controls that required annual reviews of subrecipients'
performance. As a result, subrecipients did not consistently maintain
rental units in accordance with the City's minimum housing standards.
Our inspections of 45 units at 8 completed projects identified 22
units which were not decent, safe and sanitary. However, our review
of the rents and resident files for these eight projects showed
that rents were affordable and units were provided to eligible families.
The City has not developed controls that require review of subrecipient
performance because it has focused on development, not ongoing performance.
Date Issued: July 2, 1998
Audit
Memorandum No.: 98-SE-204-1003
File Size: 151KB
Title: King County HA,Public Housing Drug Elimination Program,
Seattle, WA
As part of a multi-district review of the Public Housing Drug
Elimination Program (Drug Elimination Program), we conducted an
audit of the King County Housing Authority's (Housing Authority)
Drug Elimination Program for Fiscal Years 1994 through 1996. We
were to select two public housing authorities - one designated as
"troubled", the other "non-troubled" - for the review. However,
there were no "troubled" public housing authorities in the Northwest/Alaska
Office's jurisdiction, so we did not include a "troubled" public
housing authority in our review. We selected King County Housing
Authority, "non-troubled", because HUD had given this entity the
highest rating in the Northwest/Alaska Office jurisdiction for its
capacity to carry out the program. In addition, the Housing Authority
received the second highest amount of program funding in the jurisdiction.
The purpose of our review was to determine whether the Housing Authority:
1. Implemented its Drug Elimination Program awards for Fiscal Years
1994 through 1996 with satisfactory outcomes/benefits in accordance
with its plans;
2. Submitted required Drug Elimination Program reports in a timely
manner; and
3. Expended Drug Elimination Program funds for only eligible activities
in accordance with applicable Notices of Funding Availability (NOFA)
for Fiscal Years 1995 and 1996.
We found that the Housing Authority implemented Drug Elimination
Program awards for Fiscal Years 1994 through 1996 with satisfactory
outcomes/benefits in accordance with its plans. Specifically, the
Housing Authority identified and analyzed drug-related crime problems
at its targeted developments (Attachment II); planned activities
to address identified problems; implemented planned activities;
and developed a process to measure performance and demonstrate program
outcomes in accordance with its plans. Although we found that crime
statistics were inconclusive, residents told us that they feel safer
in their communities as a result of drug elimination efforts. In
addition, the Housing Authority submitted required semi-annual and
final performance and financial reports in a timely manner, and
only expended funds on eligible activities. Accordingly, we are
not making any recommendations.
Date Issued: May 29, 1998
Audit
Report No.: 98-SE-202-1002
File Size: 83KB
Title: Request for Assistance Nampa Housing Authority Indian
Creek Child Care Center Use of Operating Funds to Pay for Child
Care Expenses Nampa, Idaho
The Nampa Housing Authority (Housing Authority) completed construction
of the Indian Creek Child Care Center (Center) through the use of
1993 Comprehensive Improvement Assistance Program funds (CIAP) in
1994. After taking over the Center's operations in August 1997,
the Housing Authority used operating funds to pay for child care
expenses, the majority of which were ineligible. The Housing Authority
took over the Center without a plan, procedures, or adequate controls
to properly operate the Center. As a result,
- the Housing Authority used over $70,000 of its operating funds
for child care expenses, primarily for nonresident children,
- payments from parents were unaccounted for, and
- some parents stopped using the facility due to its poor management
and record keeping.
Date Issued: January 30, 1998
Audit
Report No.: 98-SE-207-1001
File Size: 403KB
Title: Congressional Request, Cascade Inter-Tribal Housing Authority
Sedro Woolley, WA
We performed an audit at the Cascade Inter-Tribal Housing Authority
(Housing Authority) to evaluate allegations in a complaint received
through the office of Congressman Jack Metcalf of the United States
House of Representatives. The complainant alleged fraud, waste,
and mismanagement at the Housing Authority in the areas of:
* procurement,
* use of Comprehensive Improvement Assistance Program (CIAP) grant
funds,
* travel,
* the award of Section 8 Vouchers and Mutual Help homes,
* calculation of payments for Mutual Help homes, and
* maintenance of Mutual Help homes.
We did not substantiate the allegations in the complaint relating
to procurement, use of CIAP grant funds, and travel. However, we
determined that the allegations relating to the award of a Section
8 Voucher and a Mutual Help home, calculation of payments for Mutual
Help homes, and maintenance of Mutual Help homes were valid.
Issue Date: January 15, 1998
Audit
Memorandum No.: 98-SE-207-1004
File Size: 74KB
Title: Yakama Nation HA, Review of Certain Complaints, Wapato,
WA
We conducted a review to determine the validity of allegations
that we received from several sources concerning the management
of the Yakama Nation Housing Authority (Housing Authority). The
allegations covered various management areas such as tenant admissions
and charges, maintenance, contracting, modernization, and executive
director compensation. In all we identified 12 individual complaints
for review. (See Attachment I.) Those complaints and what we found
concerning each of them are discussed in the Results of Review section
of this memorandum. Of the 12 complaints, we concluded that six
were valid, at least in part, and that this was indicative of some
broader management problems at the Housing Authority. We have made
various recommendations to correct these problems in the Recommendations
section of this memorandum.
The Executive Director of the Housing Authority, in response to
our draft memorandum, generally agreed with the results of our review
and noted that the Housing Authority has implemented or is in the
process of implementing corrective action. We are recommending that
you ensure that the Housing Authority has implemented corrective
action on all of our recommendations before approving its next operating
plan under the Native American Housing and Self-Determination Act
of 1996 (NAHASDA).
Issue Date: December 19, 1997
Audit
Case No.: 98-DE-207-1001
File Size: 143KB
Title: Muckleshoot HA, Auburn, WA
The Housing Authority initiated the development of two HUD-funded
housing projects and implemented its own independent housing programs.
However, at least $575,549 of funding for its independent housing
programs were made with HUD program monies, which was contrary to
the provisions of the HUD Annual Contributions Contracts and regulations.
Accordingly, the Authority reduced monies available to administer
its HUD-funded development projects. In addition, the Authority
had limited controls over its administrative and operating expenditures.
As a result, excessive, unsupported, and questionable costs were
incurred by the HUD projects.
Issue Date: October 31, 1995
Audit
Case No.: 96-SE-207-1001
File Size: 82KB
Title: Chehalis Tribal HA, Oakville, WA
Our report contains one finding. This finding discloses that the
Housing Authority changed the use of the emergency funds and is
pursuing a permanent sewage treatment solution that involves the
surrounding community. However, the Housing Authority could not
obtain ONAP agreement in changing the use of funds, so problems
occurred. The Housing Authority mismanaged the procurement of its
modernization contract and the administration of this contract.