Audit Report on the Compliance of 456 W. 129th Street Housing Corp., With Its Contract with the Department of Housing Preservation and Development
EXECUTIVE SUMMARY
The Department of Housing Preservation and Development (HPD) entered into a three-year contract (January 1, 1992–December 31, 1994) with the 456 W. 129th Street Housing Corp., also known as Convent Avenue Family Living Center (Convent), to manage, maintain, and operate the Convent Family Center (Family Center). Under the terms of the contract, Convent is to provide temporary emergency housing for families displaced by fires or ordered to vacate their apartments because of unsafe conditions. During our audit period—July 1, 2000, to June 30, 2001—Convent’s approved contract totaled $837,524. However, HPD registered only $468,732 of the total amount with the Comptroller’s Office.
Our audit objective was to determine whether Convent complied with its contract with HPD. Specifically, we wanted to determine whether Convent kept the Family Center in a safe and sanitary condition; maintained complete and accurate records to support amounts billed to HPD; and maintained complete and accurate records to support its expenses, and whether those expenses were reasonable and necessary for the operation and maintenance of the Family Center. Our audit covered the period from July 1, 2000, through June 30, 2001.
Prior to beginning the audit, on May 4, 2001, we conducted unannounced visits to the premises to determine whether the Family Center was maintained in a safe and sanitary condition. A follow-up visit was made on February 19, 2002, to determine whether conditions found during our initial visits were corrected. In addition, we reviewed reports filed by Convent’s social workers and maintenance workers that detailed problems they found in the apartments and work orders that indicated repairs had been completed. We also compared the conditions noted on the inspection reports to the conditions found during our visits.
We determined whether Convent maintained complete and accurate records to support amounts billed to HPD by reconciling Convent’s tenant occupancy records to HPD’s on-site occupancy records. In addition, we determined whether Convent billed HPD and DHS for the same tenants by comparing the residents’ names and apartments listed on occupancy verification records maintained by HPD and DHS for the six months of July and December 2000, and January, February, March and May 2001. We obtained and reviewed all canceled checks and corresponding invoices for the audit period, and we reviewed the payroll and employee time records for three pay periods in August and September 2000. We determined whether Convent complied with other provisions of its contract by verifying whether: appropriate insurance coverage was maintained; an inventory of office equipment was maintained and the equipment was tagged; 24-hour security was maintained; orientation and a copy of the ‘House Rules’ were provided to new tenants; and not-for-profit organizations and government agencies were provided non-residential space.
Our audit was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and included tests of the records and other auditing procedures considered necessary. This audit was performed in accordance with the City Comptroller’s audit responsibilities as set forth in Chapter 5, § 93, of the New York City Charter.
Convent maintained complete and accurate records to support expenses and the amounts billed to HPD and generally spent program funds on expenses that were reasonable and necessary for the operation of the Family Center. In addition, in accordance with its contract, Convent properly billed HPD and DHS for only those tenants for whom each agency was responsible; maintained the required insurance coverage; maintained 24-hour security surveillance; conducted orientation for new tenants and provided them with a copy of the ‘House Rules’; and provided non-residential space for not-for-profit organizations and government agencies providing social services, support, and relocation services.
However, Convent did not comply with certain terms of its contract and had weaknesses in its operating practices. Specifically, Convent did not maintain the facilities in a safe and sanitary condition. We found roach infestation; leaking faucets; peeling paint; defective window sashes; missing tiles; and a hole in one apartment’s floor. In addition, residents complained that their apartments were infested with mice. Based on our two sets of inspections, we conclude that Convent is not performing satisfactorily in terms of providing a safe and sanitary environment for all of its tenants. We also conclude that HPD’s monitoring of Convent is inadequate.
Convent did not always repair the problems identified by its staff until after the problems were noted in a subsequent inspection or inspections. As a result, many of the repairs took an inordinate amount of time to complete. A review of inspection reports revealed that in six instances, Convent’s staff noted the same problems on two separate inspection reports before repairs were made. For example, an inspection by a Convent employee on March 2, 2001, identified a leaking drainpipe under the kitchen sink. The same problem was identified during a second inspection on March 22, 2001—20 days after the initial inspection. The repair was finally completed on April 30, 2001—59 days after the initial inspection. In another example, an inspection on March 1, 2001, found a broken front door knob. The same problem was identified during a second inspection on April 19, 2001—49 days after the initial inspection. The repair, performed in 25 minutes (according to the work order), was finally completed on August 21, 2001—173 days after the initial inspection.
Convent’s contract contains no provision requiring that it inspect apartments for items in need of repair. Rather, the contract requires only that it ‘systematically and promptly respond to reasonable complaints from and requests’ by occupants. However, when inspections cite conditions needing repairs, undue delays in completing those repairs may result in the unsafe and unsanitary conditions. It appears that Convent recognizes this since, even though inspections are not required by the contract, Convent employees inspected tenants’ apartments a total of 489 times during the Fiscal Year 2001. This averages out to 6.4 times for each apartment during our audit period.
In their inspection reports, Convent employees noted that repairs were needed in 183 of the 489 inspections that covered 75 of the 76 occupied Family Center apartments. We could not determine, however, whether repairs were completed in 26 of the 75 apartments because work orders covering those apartments were missing. Without work orders for the 26 apartments to review, we could not determine whether the problems noted in those apartments were addressed.
For the remaining apartments in which repairs were needed, we found 159 work orders indicating that the work was completed. We found five instances for which the conditions noted took more than six months to repair, 25 instances for which repairs took between three and six months to complete, and 83 instances for which it took between eight days and three months to complete. Repairs for the remaining 46 work orders were completed in seven days or less––20 on the same day as the condition was reported. We commend Convent for repairing conditions on the same day as reported in those 20 instances. However, it is unacceptable for Convent to take a week or longer to make more than 70 percent of the repairs, especially when some conditions take more than three months to correct.
Finally, Convent’s contract with HPD includes $80,484 for ‘management fees’ for our audit period. The contract, however, does not indicate who the manager is or what services were to be provided. According to Convent’s latest certified financial statements, the Family Center’s operations are managed by West Harlem Group Assistance (WHGA). Convent paid WHGA $80,484 during our audit period. We question the payments made to WHGA because there is no contract between Convent and WHGA indicating what services were to be rendered by WHGA in return for the fee.
The report made seven recommendations, including that HPD ensure that:
- Convent inspects all apartments and ensure that all unsafe and unsanitary conditions are corrected.
- Convent performs all repairs promptly to address conditions noted in the inspection reports.
- Convent requires that its maintenance workers file work orders after work is completed. The supervisor should then inspect all repairs to ensure that they were properly completed. After inspecting the repairs and reviewing the work orders, the supervisor should sign each work order attesting that the repair was completed, and file the work order in Convent’s files.
The matters covered in this report were discussed with Convent and HPD officials during and at the conclusion of this audit. A preliminary draft report was sent to Convent and HPD officials and discussed at an exit conference on June 10, 2002, with Convent and HPD officials. On June 11, 2002, we submitted a draft report to Convent and HPD officials with a request for comments. We received written responses from Convent on June 24, 2002, and from HPD on June 26, 2002.
In its response, Convent described the steps it has taken or will take to implement six of the report’s seven recommendations. With regard to the remaining recommendation (#5), Convent stated that it reported all voided checks on its monthly bank reconciliations, in accordance with HPD procedures.
HPD agreed to implement all of the report’s recommendations.