Audit Report on the Compliance of The 138-152 West 143rd Street Housing Development Fund Corporation with its Contract with the New York City 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, through December 31, 1994) with the 138-152 West 143rd Street Housing Development Fund Corporation (Corporation), to manage, maintain, and operate the Harriet Tubman Family Living Center (Family Center). Under the terms of the contract, the Corporation was to provide temporary emergency housing for families displaced by fires or ordered to vacate their apartments because of unsafe conditions. The contract was renewed by HPD for the period January 1, 1995, through June 30, 1998. Since the end of the initial renewal period, HPD has extended the Corporation’s contract on a year-to-year basis. For our audit period, July 1, 2000, through June 30, 2001, the Corporation’s contract totaled $1,367,467.
This audit determined whether the Corporation complied with its contract with HPD— specifically, whether the Corporation 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. The audit also determined whether those expenses were reasonable and necessary for the operation and maintenance of the Family Center.
The Corporation 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. Also, in accordance with its contract, the Corporation properly billed HPD and DHS for only those tenants for whom each agency was responsible; maintained the required insurance coverage; provided social services to occupants, including skills training in home management; 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 and support and relocation services.
However, the Corporation did not comply with certain terms of its contract and there were weaknesses in its operating practices. Specifically, the Corporation did not maintain the facilities in sanitary condition. During our unannounced visits to the Family Center, we found a faulty electrical outlet, peeling paint, broken cabinet doors, broken tiles, leaking faucets, roach infestation, leaks from bathroom ceilings, and damaged bathroom vanities. In addition, many of the residents complained that their apartments were infested with roaches, mice, or rats.
The Corporation’s contract contains no provision requiring that it inspect apartments for items in need of repair. Rather, the contract requires only that it respond expeditiously to resolve tenant complaints. According to the Corporation Director, social workers, accompanied by maintenance staff members, visit every apartment in the Family Center once a month. If that were the case, based on the number of apartments at the Family Center, employees would have been required to make 1,200 inspections during the year. The Corporation, however, provided us only 460 inspection reports, covering 77 of the Family Center’s 100 apartments. There were no inspection reports covering the remaining 23 apartments. Based on the 460 inspection reports, we noted that each of the 77 apartments was inspected an average of 5.69 times during the year.
We could not determine whether repairs were made for many of the problems noted, either because the work orders did not indicate what action was taken to correct the problem or because no work order was prepared for the condition found. According to the Family Center Director, the maintenance staff is required to complete a work order for all conditions that need correction. Our review of the 460 inspection reports revealed that work orders should have been prepared for 599 conditions that required correction. For 163 of the 599 conditions, we were not provided work orders. Moreover, work orders covering 200 of the remaining 436 conditions needing repair did not indicate that any action was taken to correct the condition.
Furthermore, during our audit period, the Corporation paid the West Harlem Group Association (WHGA) $80,266. We question the payments made to WHGA, because there is no contract between the Corporation and WHGA indicating what services were to be rendered by WHGA in return for the fee, and because WHGA did not appropriately bill for services rendered (appropriate bills would describe the services provided).
To address these issues, the report made four recommendations. HPD should ensure that the Corporation:
- Immediately inspect all apartments and ensure that all conditions found (including those cited in this report) are corrected.
- Develop and implement formal procedures for inspecting tenants’ apartments. Procedures should include the frequency of required visits, steps to be taken when a tenant is not at home, conditions to be reported and how they are to be reported, and when to follow up to ensure that conditions are corrected. The Corporation should ensure that employees perform inspections and complete repairs in accordance with its procedures.
- Properly support all disbursements with adequate documentation and pay only for expenses related to the Family Center’s day-to-day operations.
- Maintain an updated inventory list that includes all the equipment on hand and ensure that proper identification tags are affixed to each item.
In its response, the Corporation described the steps it has taken or will take to implement the report’s four recommendations. HPD agreed to implement all of the report’s recommendations.