Finding 2024-001 – Comprehensive Compliance Monitoring Review Findings
Public Housing Program – Assistance Listing No. 14.850a; Grant Period - Fiscal year ended March 31, 2024
Criteria
The Code of Federal Regulations (CFR’s) and HUD PIH Notices and Handbooks provide requirements and guidance for which the Public Housing Program is to be administered and operated under.
Condition and Perspective
During April of 2024, HUD conducted a Comprehensive Compliance Monitoring Review of the Authority’s Public Housing Program. The Review Report dated June 24, 2024, included the following Review Findings:
Finding 1: The Housing Authority must provide the HUD Field Office with updated and completed General Depository Agreements for each of their bank accounts. The General Depository Agreement on accounts at Regions Bank provided was on an outdated HUD-51999 Form with no account numbers listed.
Finding 2: The Housing Authority must provide HUD with an updated procurement policy to include the latest regulation of 2 §CFR 200. The Procurement Policy for the Housing Authority has not been updated at least since May 2015 and 24 §CFR 85.36 was referenced which is the old regulation.
Finding 3: The Housing Authority must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The Procurement Policy states the Housing Authority self certifies and is exempt from prior HUD review and approval of individual procurement action. The Field Office does not accept self-certification.
Finding 4: The Housing Authority should develop a contractor log that includes several contractors that have the capacity to successfully perform and complete projects listed in the Request for Proposals. The Contractor Log broadens the number of contractors that the Housing Authority can solicit proposals from, resulting in more competitive bidding. The contractor log is not being maintained and updated with current procurement actions.
Finding 5: The Housing Authority should prepare independent cost estimates prior to all procurement actions. The Housing Authority did not provide independent cost estimates for any procurement. An independent cost estimate serves as an index for evaluating the reasonableness of the proposed costs or prices.
Finding 6: The HUD Procurement Handbook states that contracts should not exceed five years, including options for renewal or extension. The legal service contract was awarded to Massey, Stotser, & Nichols, PC was signed and dated November 2011 for the duration of October 1, 2011, through September 30, 2013. In the contract there is an Extension Clause that states, “Fairfield Alabama Housing Authority may extend or modify a contract the body of the contract for ninety (90) days or longer.” In the procurement file, the contract has been extended every two years with the last extension dated February 13, 2024, extended to September 30, 2025.
Finding 7: The HUD Procurement Handbook states that contracts should not exceed five years, including options for renewal or extension. The janitorial service contract was awarded to Falls Facility Service, signed and dated November 2011 for the duration of October 1, 2011, through September 30, 2011. In the contract, there is an Extension Clause that states, “Fairfield Alabama Housing Authority may extend or modify a contract the body of the contract for ninety (90) days or longer.” In the procurement file, the contract has been extended every two years with the last extension dated April 11, 2024, extended to May 31, 2024.
Finding 8: All procurement actions must go through the procurement process. TJ Everhart Consulting, LLC was brought in by the Board Co-Chairman, Gale Gould, to perform consulting services in relation to the Housing Authority Culture Transformation. The agreement was signed on November 13, 2023, by the Executive Director and TJ Everhart Consulting, LLC. This action did not go through the procurement process. To date Fairfield Housing Authority has paid $23,254.50 to TJ Everhart Consulting, LLC. Since the review was conducted the Housing Authority indicated the contract was terminated.
Finding 9: All non-competitive procurement actions must be sent to the HUD Field Office for approval prior to award. BGC Advantage was awarded as the Asset Repositioning Development Consultant on November 13, 2019. The proposals were due to the Housing Authority on October 31, 2019, at 5:00pm. A proposal from Dominion Due Diligence Group was emailed to the Housing Authority on November 1, 2019, after the proposal deadline of October 31, 2019. On November 5, 2019, Dominion Due Diligence Group rescinded the Request for Proposal. At the time of the submission deadline, only one proposal was received from BGC Advantage. This non-competitive procurement action was not sent to the Birmingham Field Office for HUD approval prior to award in accordance with procurement guidelines.
Finding 10: A PHA may expend up to $100,000 in public housing program funds on pre-development conversion costs per project without HUD approval. The Housing Authority has spent $203,937.34 for RAD pre-development expenses with BGC Advantage. No prior approval was received by HUD for the Housing Authority to exceed $100,000.
Finding 11: A PHA must provide information and promptly advise tenants of required notifications in accordance with PHA actions for RAD. The Housing Authority has not provided the Field Office with Rental Assistance Demonstration (RAD) related information; updated RAD resources; or updated IMS/PIC with requested information from the Field Office letter dated February 20, 2024.
Finding 12: The Housing Authority must conduct a reexamination of income at least once every 3 years and reexamination of family composition annually. The Housing Authority must ensure that all applications are completed in their entirety. The Housing Authority applications were not fully completed in the areas of assets, deductions, and income. Failure to ensure that all questions are answered on the application could lead to under or overpayment of subsidy.
Finding 13: The Housing Authority must conduct a reexamination of income at least once every 3 years and reexamination of family composition annually. The Housing Authority must ensure that all applications are completed in their entirety. The Family Choice of Rental Payment forms were not completed properly, and corrections were not initialed.
Finding 14: The Housing Authority’s pet policy is not in accordance with updated federal policy.
Finding 15: Each PHA must complete a comprehensive physical needs assessment every five years. The Housing Authority has not completed a Physical Needs Assessment.
Finding 16: Fiscal closeout includes the submission of a cost certificate; an audit, if applicable; a final Performance and Evaluation Report; and HUD approval of the cost certificate. The Housing Authority is showing 99% obligated in LOCCs however there is no 2022 Five-Year Action Plan and 2022 Annual Statement in EPIC.
Finding 17: To ensure that all residents live in safe, habitable dwellings, the items and components located inside the building, outside the building, and within the units of HUD housing must be functionally adequate, operable, and free of health and safety hazards. The Housing Authority did not address all health and safety deficiencies from the last inspection held in 2022. All health and safety deficiencies must be addressed within 24 hours of receipt of the inspection report. The Field Office went onsite on June 29, 2023, to provide technical assistance in reviewing work orders and compliance documentation.
Finding 18: For all operations work and contracts, including routine and nonroutine maintenance work, all laborers and mechanics employed shall be paid not less than the wages prevailing in the locality. The Housing Authority does not have maintenance wage rates on file.
Finding 19: The Violence Against Women Act (VAWA) requires PHA’s to have policies and procedures for the implementation and processing. The Housing Authority does not have a VAWA policy. The Housing Authority’s ACOP states it will comply with VAWA laws.
Finding 20: The Violence Against Women Act (VAWA) requires PHA’s to have policies and procedures for the implementation and processing. The Housing Authority’s Public Housing Dwelling Lease dated December 2017 does not include required VAWA bifurcation language or the VAWA housing protections, as amended for victims. Additionally, the Housing Authority tenant files did not contain form HUD-91067, Lease Addendum.
Finding 21: The purpose of Section 3 is to ensure that economic opportunities, most importantly employment, generated by certain HUD financial assistance shall be directed to low- and very low-income persons, particularly those who are recipients of government assistance for housing or residents of the community in which the Federal assistance is spent. The Housing Authority is not in compliance with the new Section 3 regulation of 24 §CFR 75.
Cause
Failure to maintain updated policies and execute various controls over federal requirements of the Public Housing Program.
Effect
Noncompliance with certain requirements of the Program.
Questioned Costs – None noted
Recommendation
The Authority has responded to HUD’s Review Findings with specific corrective actions it has implemented and is in the process of implementing. We recommend that the Authority continue implementing the remainder of its corrective actions outlined in its response communicated to HUD.
Reply
Management has issued a formal response to HUD’s Findings dated August 12, 2024, outlining specific corrective actions and considers the corrective actions satisfactorily implemented as of the date of this Report. The Authority’s Executive Director has assumed the responsibility of continued execution of the corrective actions.