Finding Number 2024-001 SPECIAL TESTS AND PROVISIONS- ENVIRONMENTAL CONTAMINANTS TESTING AND REMEDIATION – MATERIAL WEAKNESS Agency Name FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Program ALN 14.850 – PUBLIC AND INDIAN HOUSING Contract # N/A 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. Condition/Context 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. Recommendation We recommend that the Authority continue to ensure that all environmental contaminates are properly remediated during the audit period through the HUD Agreement. Corrective Action Plan 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. Action Date Ongoing milestones through January 31, 2039 Final Implementation The latest in time obligation under the HUD Agreement is the Authority’s obligation to abate 100% of the apartment units that contain lead-based paint, and the interior common areas that contain lead-based paint in the same building as those units, by January 31, 2039 Name And Phone Number Of Person Responsible For Implementation Cassiah (Cassie) M.Ward Chief Compliance Officer +1-212-306-8484