FINDING # 2024-001 SPECIAL TESTS AND PROVISIONS- ENVIRONMENTAL CONTAMINANTS TESTING AND REMEDIATION – MATERIAL WEAKNESS PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Special Tests and Provisions - Environmental Contaminants Testing and Remediation As stated in the May 2024 Compliance Supplement, Public Housing must be decent, safe, sanitary, and in good repair. Public Housing Authority’s (PHA) must maintain such housing in a manner that meets the physical condition standards set forth in 24 CFR section 5.703 in order to be considered decent, safe, sanitary, and in good repair. Those standards address the major areas of the public housing: the site; the building exterior; the building systems; the dwelling units; the common areas; and health and safety considerations. Health and safety considerations require that all areas and components of the housing must be free of health and safety hazards. These areas include, but are not limited to, air quality, electrical hazards, elevators, emergency/fire exits, flammable materials, garbage and debris, handrail hazards, infestation, and lead-based paint. The housing must have no evidence of infestation by rats, mice, or other vermin, or of garbage and debris. The housing must have no evidence of electrical hazards, natural hazards, or fire hazards. The dwelling units and common areas must have proper ventilation and be free of mold, odor (e.g., propane, natural gas, methane gas), or other indoor air hazards such as radon. The housing must comply with all requirements related to the evaluation and reduction of lead-based paint hazards and have available proper certifications of such (see 24 CFR Part 35). For the period under audit, the PHA is required to test for and remediate environmental contaminates including but not limited to lead-based paint, radon gas, and mold to ensure that public housing met the physical condition standards for health and safety considerations set forth in 24 CFR section 5.703. 2. CONDITION/PERSPECTIVE The New York City Housing Authority (the “Authority”) performs environmental contaminates testing and remediation including but not limited to Lead-based paint, Mold, Pest Control, Elevators, Heating and Annual Apartment Inspections. To track compliance with the Agreement executed on January 31, 2019 by and among the Authority, the U.S. Department of Housing and Urban Development (“HUD”) and the U.S. Attorney’s Office for the Southern District of New York (SDNY) and The City Of New York (the “HUD Agreement”), the Authority maintains monthly inspection reports for the various inspections performed and provides that information to HUD, the SDNY and the Federal Monitor appointed under the HUD Agreement. Deloitte obtained the bi-annual lead- based paint compliance reports from the Authority and for the Period from January 1, 2024 through July 31, 2024. we read extermination, heat outage, mold inspections, annual apartment inspections, and elevator outage reports for the months of February 2024; April 2024; July 2024; September 2024 and November 2024. During our audit, we noted that the Authority did not complete all corrective actions in the 2024 audit period and is in the process of addressing these issues. 3. CAUSE Some environmental contaminates were not remediated in the 2024 audit period. 4. EFFECT The U.S. Department of Housing and Urban Development (HUD) may consider the Authority non- compliant with the HUD Grant Agreement and withhold or reduce future Federal funding. Notably, HUD has signed a settlement agreement due to environmental health and safety issues on NYCHA properties and NYCHA is in the process of implementing the terms of the settlement agreement. 5. REPEAT FINDING Yes 6. RECOMMENDATION We recommend that the Authority continue to ensure that all environmental contaminates are properly remediated during the audit period through the HUD Agreement. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2019, the Authority entered into the HUD Agreement to address building conditions, including conditions related to lead-based paint, mold, pests, elevators, and heating. Among other things, the HUD Agreement appointed a federal Monitor and established three new Departments – Compliance, Environmental Health & Safety, and Quality Assurance. It also required the promulgation of action plans around these health and safety issues and other items. These action plans are publicly available https://www1.nyc.gov/site/nycha/about/reports.page, along with other reports on health and safety issues, which detail the Authority’s efforts to inspect for and correct deficiencies associated with environmental contaminants like lead-based paint and mold. The Authority plans to continue to work to address these health and safety issues, and to work towards meeting the multi-year obligations laid out in the HUD agreement in addition to the action plans. NYCHA has recorded $4,930,190,000 of pollution remediation obligations as of December 31, 2024, which relates to costs to inspect for, and correct deficiencies associated with environmental contaminants.
FINDING # 2024-002 ELIGIBILITY – DEFICIENCY - COMPLIANCE PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Eligibility for Individuals - Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Public and Indian Housing Program is to provide and operate cost effective, decent, safe, and affordable dwellings for lower income families through an authorized local PHA. Of the sixty (60) case files selected for testing in which 540 pieces of audit evidence (eligibility forms as noted in the Criteria section above) were requested to be provided: • Ten eligibility forms were not provided (Three missing application forms, two missing Federally prescribed general release form for employment information; two missing verification of income; two missing calculation of rent forms and one missing reexamine family income). These forms are required documentation to be maintained in the case files to support eligibility for Public and Indian Housing Program. Therefore, we were not able to determine if the eligible participants met all the eligibility criteria. 3. CAUSE The Authority did not ensure that all required eligibility forms were obtained from the tenants and included in the case files timely. 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the eligibility requirements. 5. REPEAT FINDING Yes 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Public and Indian Housing Program case files to ensure that all eligibility forms are received, reviewed, and maintained in the case files to support the determination of eligibility. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2011, NYCHA implemented the Siebel Customer Relationship Management (CRM) system, which included digital file storage and an online application process, which replaced our previous paper application process. Any applications in process from that date onward were subject to document scanning and documentation was stored digitally. Any applications processed prior to this date were kept in a paper format and stored at the development, where the applicant was certified or where the tenant resides. If a tenant family transferred to another development, the physical tenant folder and documents were sent to their new location. In June 2020, NYCHA sought to digitize all tenant folders; however, the cost of the project was determined to be prohibitive so the goal of digitizing the tenant folders was not realized. Any documents damaged or lost prior to 2011 cannot be recovered, including those impacted by Hurricane Sandy.
FINDING # 2024-003 ELIGIBILITY – SIGNIFICANT DEFICIENCY - COMPLIANCE SECTION 8 HOUSING CHOICE VOUCHERS (ALN # 14.871) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (CONTINUED) 1. CRITERIA- Eligibility for Individuals - Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: • As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). • For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent (24 CFR section 982.516). 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Section 8 Housing Choice Voucher Program provides rental assistance to help very low- income families afford decent, safe, and sanitary rental housing. The Mainstream Voucher program enables families for whom the head, spouse, or co-head is a person with disabilities to lease affordable private housing of their choice. Of the sixty (60) case files selected for testing in which 600 pieces of audit evidence (eligibility forms as noted in the Criteria section above) were requested to be provided: • Thirty-three eligibility forms related to five cases, were not provided (Thirty-two missing application forms, and one missing third -party verification of reported family annual income form). These forms are required documentation to be maintained in the case files to support eligibility for Section 8 Housing Choice Voucher Program. Therefore, we were not able to determine if the eligible participants met all the eligibility criteria. 3. CAUSE The Authority did not ensure that all required eligibility forms were obtained from the tenants and included in the case files timely. 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the eligibility requirements. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Section 8 Housing Choice Voucher Program case files to ensure that all eligibility forms are received, reviewed, and maintained in the case files to support the determination of eligibility. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL There are some missing documentation pertaining to eligibility and admission in files for households admitted prior to 2011. Such documentation, which includes the application, vital documents, lease, and request for tenancy approval, is aged beyond 20 years for some cases and is not retrievable as part of a 2010 backfile conversion. This was noted as a condition in a previous Single Audit. Part III of the Schedule of Findings and Questioned Costs for Federal Awards year ending December 31, 2010, cited the condition as “For two of our selections, the Authority was not able to locate the tenant file containing the required documentation that the authority had obtained to verify income eligibility. Because the tenant file was not available, the authority was not able to provide all of the documents needed to test eligibility such as tenant applications, third party income verifications, or lease agreements.” NYCHA's response to that audit conveyed our confidence in the business improvement initiatives completed to streamline the document management process. As NYCHA noted in response to the 2010 audit: the backfile conversion process was part of a large-scale, multi-year implementation of a new computer system that went live in 2011, during which over 15 million documents were converted to electronic files. New system improvements included forms tracking using the Intelligent Forms Processing (IFP) scanning technology. The IFP technology associates and saves scanned documents and documents completed by tenants electronically directly to the tenant case files in Siebel. The Siebel Customer Relationship Manager (CRM) System provides process standardization and solutions for document retention needs. In the current audit, there are 30 files that are reflective of our improved document management and retention; NYCHA has continued to make such improvements since 2011 and NYCHA remains committed to making our best efforts to ensure that all eligibility and admission documentation is maintained in the system of record.
FINDING # 2024-004 SPECIAL PEROFRMANCE – DEFICIENCY - COMPLIANCE SECTION 8 HOUSING CHOICE VOUCHERS (ALN # 14.871) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (CONTINUED) 1. CRITERIA- Special Reporting - HUD-50058, Family Report (OMB No. 2577-0083) - The PHA is required to submit this form electronically to HUD each time the PHA completes an issuance, admission, annual reexamination, interim reexamination, portability move-in, expiration, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA's jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Key Line items - The following line items contain critical information Line 2a - Type of Action Line 2b - Effective Date of Action Line 3b, 3c – Names Line 3e - Date of Birth Line 3n - Social Security Numbers Line 5a - Unit Address Line 5h, 5i - Unit inspection Dates Line 7i - Total Annual income Lines 2k and 17a - Family's Participation in the Family Self Sufficiency (FSS) Program Line 17k (2) - FSS Account Balance 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Authority is required to submit HUD-50058 each time the PHA completes an issuance, admission, annual reexamination, interim .reexamination, portability move-in, expiration, or other change of unit for a family. Of the sixty (60) case files selected for testing in which 540 pieces of audit evidence (Special reporting forms as noted in the Criteria section above) were requested to be provided: • Eight documents related to HUD-50058 forms were not provided (One missing verification of Names; Three missing verification of Date of Birth; and Four missing Verification of Social Security. These forms are considered critical information for HUD -50058 forms. This documents are required documentation to be maintained in the case files to support HUD-50058 form for Section 8 Housing Choice Voucher Program. Therefore, we were not able to determine if the critical information in HUD-50058 form are supported by supporting documentation. 3. CAUSE The Authority did not ensure that all required critical information for HUD-50058 forms were obtained from the tenants and included in the case files timely. 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the special performance requirements. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Section 8 Housing Choice Voucher Program HUD-50058 form to ensure that all supporting documentation for HUD-50058 form are received, reviewed, and maintained to support HUD -50058 form. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL There are some missing documentations pertaining to eligibility and admission in files for households admitted prior to 2011. Such documentation, which includes the application, vital documents, lease, and request for tenancy approval, is aged beyond 20 years for some cases and is not retrievable as part of a 2010 backfile conversion. This was noted as a condition in a previous Single Audit. Part III of the Schedule of Findings and Questioned Costs for Federal Awards year ending December 31, 2010, cited the condition as “For two of our selections, the Authority was not able to locate the tenant file containing the required documentation that the authority had obtained to verify income eligibility. Because the tenant file was not available, the Authority was not able to provide all of the documents needed to test eligibility such as tenant applications, third party income verifications, or lease agreements.” NYCHA's response to that audit conveyed our confidence in the business improvement initiatives completed to streamline the document management process. As NYCHA noted in response to the 2010 audit: the backfile conversion process was part of a large-scale, multi-year implementation of a new computer system that went live in 2011, during which over 15 million documents were converted to electronic files. New system improvements included forms tracking using the Intelligent Forms Processing (IFP) scanning technology. The IFP technology associates and saves scanned documents and documents completed by tenants electronically directly to the tenant case files in Siebel. The Siebel Customer Relationship Manager (CRM) System provides process standardization and solutions for document retention needs. In the current audit, there are 30 files that are reflective of our improved document management and retention; NYCHA has continued to make such improvements since 2011 and NYCHA remains committed to making our best efforts to ensure that all eligibility and admission documentation is maintained in the system of record.