- - - . auddw- m-s. Jim? ?mum For: a? Amara-G. 3.51va EV?b?f?fvmv-r REFERENCE 15 AUDIT REPORT CITY OF JACKSONVILLE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PUBLIC HOUSING OPERATIONS JACKSONVILLE, FLORIDA JUNE 12, 1992 OFFICE OF AUDIT, REGION IV ATLANTA, GEORGIA limo Date June 12, 1992 gepprt 0F TOR TO: James T. Chaplin, Manager, Jacksonville, Florida, 4.65 FROM: Kuhl-Inclan KW 3% Regional Inspector General for Audit, 42A SUBJECT: City of Jacksonville Department of Housing and-Urban Development Public Housing Operations Jacksonville, Florida We have audited the City of Jacksonville Department of Housing and Urban Deveiopntent Public Housing and Section 8 Programs. The audit objective was to determine whether I HUD administered its public housing activities in an ef?cient, effective, and economical manner and in compliance with the terms and conditions of the Annual Contributions Contract, applicable laws, HUD regulations, and other applicable directives. Our audit covered operations from October I, 1989, through June 30, 1991. We performed onusite work during July 1991 through December 1991. We selected because HUD designated it a troubled public housing authority,r on March 22, 1990. Overall, IHUD did not effectively administer the public housing and Section 8 programs and has breached tin terms of the Annual Contributions Contract. Speci?cally, JHUD failed to: maintain the honing units in accordance with HUD requirements; properly adminisrer the Comprehensive Improvement Assistance Program; maintain an adequate occupancy level; and, adhere to other HUD requirements. We recommended that HUD, over the next 6 months, closelv monitor the corrective aetions the new Executive Director has taken and plans to take. If at the end of that period, JHUD is not in compliance with its Annual Contributions Contract, HUD should take appropriate action to ensure that competent management is placed in areas where IHUD is now in substantial breach of it?s agreement. OF CONTENTS Management Memorandum Executive Summary Introduction Findings 1 JHUD Mismanaged Housing Programs '2 Tenants Lived in Indecent, . Unsafe, and Unsanitary Conditions 3 JHUD Did Not Preperly Administer the Comprehensive Improvement Assistance Program 4 JHUD Lost $1 Million in Income by Failing to Maintain Acceptable Occupancy Levels 5 Units Demolished Before Replacements Built 6 Tenants Reside and CIAP Funds Used at Potentially Hazardous Project Site 7 Inadequate Heat at Section 8 Complex Pug: 23 37 45 49 53 924512014014 Lt"? Executive Summary As part of a mum-regional external audit, we have audited the books and operations of the City of Jacksonville Department of Housing and Urban Development (IHUD), Jacksonville, Florida. is the iocal area's public housing Authority but is part of City government. manages 3,253 public housing units, and 5,638 certi?cates and vouchers in the Section 3 programs. Its annual budget for ?scal year 1991 was $8,934,000. The objective of our audit was to determine whether IHUD administered its public housing activities ef?ciently, effectively, economically, and in compliance with the Annual Contribution Contract, applicable laws and directives, and HUD regulations. The audit covered the period October 1, ?989, through June 30, 1991. Overall, JHU-D did not effectively manage its public housing activities. Speci?cally, failed to ensure that public housing and Section 8 units were maintained in accordance with HUD requirements; expended Comprehensive improvement Assistance Program funds totaling $7,210,318 for substandard contract work; - allowed excessive vacancy rates and inadequate admissions procedures, resulting in lost income of $1,17l,223; prematurely demolished housing units prior to completing plans for replacement units, thus reducing the housing stock; it applied for funding before determining if a residential site {Golfbrooit}, knowingly buiit on a closed City-owned dump, was a safe environment for its residents or suf?ciently stable to support the housing structures; and, 0 did not ensure that 205 units at Roosevelt Gardens were adequately heated. In summary, has breached the terms of its Annual Contributions Contract with the United States. We are recommatding that HUD, over the next 6 months, closely monitor the corrective actions the new Executive Director has taken and plans to take. If at the end of that period, IHUD is not in compliance with its Annual Contributions Contract, we are recommending that HUD commence actions to ensure that competent and effective management is placed in areas where THUD is now in substantial breach of it?s Annual Contributions Contract. Additionally, we are recommending that you require IHUD to: establish it?s capability to operate the CIAP before further funding is awarded; recover appropriate costs and correct de?cient CIAP work; ?nalize repiacement housing plans before continuing further reduction of the housing stock; ensure that Blodgett residents live in units that are decent, safe, and sanitary; correct Housing Quality Fly: 1' maroon 101 i ?tin. i. Execmive Summary Standards Violations and cancel Housing Assistance Payment contracts for units not meeting standards; datain and maintain an overall 85 percent compliance with Housirrg Quality Standards before funds are provided to develop new units; determine the Safety arid stability of Golfbrook for residential living prior to expending or applying for further funding; and correct the inadequate heating at Roosevelt Gardens. We discussed each of the problems noted in the ?ndings with the Executive Director on May 12, 1992. The Exeeutiv-e Director provided written comments on May 19, 1992, which are incorporated in the report where appropriate and attached in their entirety as Appendix C. The Executive Director agreed to the ?ndings and has stated MUD has started appropriate corrective actions. Plge vi INTRODUCTION Background The City of Jacksonville's Department of Housing and Urban Development (JHUD) is a Department within the consolidated City of Jacksonville. Florida. acts as the area's public housing authority under the authority provided by the United States Government on March 1, 1953. IHUD currently administers 20 public housing projects, consisting of 3,258 units, under Annual Contributions Contract Number A4242. JIHUD also administer-s 5,633 certificates and vouchers in the Section 8 certifiCa-te, moderate rehabilitation, and voucher programs, under the Master Section 8 Annual Contributions Contract Number A-2930. As JHUD is part of the City government, Jacksonville?s Mayor and 19~membcr City Council are responsible for operations. The Mayor appoints, with City Councilcon?rrnation, JHUD executive directors. Because of political changes in City Government management has been unstable. Paul Tanner was appointed Executive Director, effective November 4, 1991. Richard Bowers served as Executive Director during part of the period audited. Vivian Jackson followed Bowers as Director serving through August 3, 1991 when the new Mayor reassigned her to another position within the City government. The Mayor appointed Admiral Joseph Coleman as interim Executive Director until Tanner took over. annual budget for ?scal year 199-1 was $8,934,000. Additionally, for the ?scal year ended March 31, 1991., the City constructively received Federal funds from HUD totaling $11.9 million including: $2.l million in payment of principal and interest of Federal Financial Bank notes and public issue bonds; 54.3 million in grants for post~1986 Comprehensive Improvements Assistance Program funds; and $5 million in operating subsidy. employs 330 employees, including a maintenance staff of 1-15. records of operations are maintained at its central of?ce, located at 1300 Broad Street, and at City Hall, 220 East Bay Street, Jacksonville, Florida- Page scan-rotor)? as? Dinoduction sz-aroouots .1 it: HUD identi?ed IHUD as a ?nancially troubled agency in 1979 but removed the designation in 1934. HUD again designated a troubled housing authority on March 22, 1990. Based on a management review performed for the ?scal year ending March 31, 1989, IHUD failed to meet ?ve of the seven performance standards used to assess the operational and administrative execution of an agency's public housing programs. The overall audit objective was to determine whether IHUD administered its housing activities in an ef?cient, effective, and economical manner and in compliance with the terms and conditions of its Annual Contributions Contract, applicable laws, HUD regulations. and other applicable directives. To accomplish this objective we reviewed books and records as considered necessary under the circumstances; interviewed City personnel as well as HUD personnel in Jacksonville, Atlanta, and Washington D. and inepected (with the assistance of a quali?ed inspector) a statistically selected sample of public and Section 3 housing units. Our review encompassed: Control Occupancy Procurement and Comprehensive Improvement Assistance Program Maintenance and Housing Quality Standards Project Demolition and Disposition The audit covered the period October 1, 1939, through June 30, 1991 and we performed on?site work from July through December 1991. We conducted our audit in accordance with generally accepted government auditing standards. PIIG 1 Finding HUD MISMANAGED HOUSING PROGRAMS did not effectively manage its Public Housing and Section 8 Programs and breached Sections 201, 206, 209, and 210 of its Annual Contributions Contract with HUD. management failed to implement controls or maintain standards to promote economical, ef?cient, and effective use of Federally funded resources for the bene?t of housing participants. Public housing program areas most adversely affected due to poor management included maintenance, Comprehensive Improvement Assistance Program, vacancies, project demolition, environmental concerns, and cost allocations. Problem areas in the Section 8 program included housing conditions, leasemp rates, and tenants accounts receivables. Each of the problem areas is summarized below, and discussed more fully in each referenced ?nding, - dilapidatodhausmg rates mean eligible" ?31; termite. The majority of tenants lived in units which did not meet national standards for safe, decent housing. IHUD management failed to maintain public housing and Section 3 units in accordance with HUD requirements. Management failed to effectively implement a preventive maintenance program or control the maintenance activities and records. As a result, 33 percent of the inSpected public housing units were not in good repair and 67 percent of the inspected Section 8 units failed Housing Quality Standards. Nonetheless, HUD paid housing assistance and administrative fees for the failed units. (Finding 2) mismanaged its Comprehensive Improvement Assistance Program resulting in poor quality contract work and overpayments to contractors. Management was ineffective to the point that housing units improved with still could not pass a HUD Housing Quality Standards inspection. (Finding 3) Prospective tenants went unhoused due to unacceptable vacancy rates. Further, poor occupancy management meant lost rental income and administrative fees exceeding 31 million. public housing units were vacant an average of 331 days and only T5 to 86 Page 3 unrest-tort Finding 1 "Required environmental -- studiesinot conducted no percent of the Section 8 Certi?cates were used when 6,074 persons were on the waiting list. {Finding 4) JHUD management demolished units prior to ?nalizing plans for their replacement. The total demolition of a public housing prefect and construction of replacement units was continuously delayed. Delays resulted from poor management and ?plamting in the initial phases, and numerous con?ngeneiee regarding funding, waivers, and location of replacement housing. The demolition plan called for the completion of replacement housing by December 1992. However, only demolition has taken place because management has not completed replacement plans. (Finding I HUD did not determine whether Golfbrook Terrace Apartments (Golfbroolt), a public housing project, rested on an environmentally safe and stable site prior to requesting $3 million in (SLAP rehabilitation funds- IHUD constructed Golfbrook on a city dump. Recent soil, sediment, ground, and surfaee water tests conducted by the Florida Department of Environmental Regulation detected several hazardous contamiHants. (Finding 6) IHUD did not insist heating equipment at 205 moderate rehabilitated units provide adequate heat for a healthy living environment. Due to unit design, all rooms used for living did not meet HQS heating standards. Representatives of the project?s owner aclmowiedged in a letter dated July 14, 1936, that the heating equipment was inadequate; however, nothing was done to correct the problem. (Finding?) Overall, IHUD did not effectively manage the housing programs and available program resources. Specifically, IHUD's management failed to enforce control systems for the various IHUD divisions to follow, and did not maintain a systematic mechanism to obtain accountability from division managers for meeting HUD requirements. The current Executive Director has not yet been in of?ce a suf?cient length of time to judge any effect of new management. Page; Finding 1 Auditee Comments fl'ielrzommendatitzms The Director, City of Jacksonville Department of Housing and Urban Development, concurred with the overall ?ndings in this report. However, the Executive Director did not specifically respond to Finding 1. Instead, the Director addressed the Speci?c ?ndings that follow. The complete comments are included in Appendix C. We recommend you: .15. 13. Institute close oversight over the Authority to determine if actions the Executive Director has taken and planned correct existing breaches with the Annual Contributions Contract. If I HUD remains in substantial breech of its agreement with HUD, then as required under Section 502{a) of the Cranston?Gonzalez National Affordable Housing Act, take appropriate action to ensure that competent management is placed in areas where is in substantial breach of it?s agreement with HUD and consider: a. Taking over all or part of the Authority's operations. b. Directing the Authority be divided into smaller divisions; have the City separate Section 8 operations away from all others. e. Requiring changes in top management. Deny IHUD any further CIAP funding until its capacity to perform effectively under program requirements is established. Page 5 HAT-201 - ,5 St Finding 2 TEHAN TS LIVED IN INDECENT, UNSAFE, AND UNSANITARY CONDITIONS IHUD failed to maintain public housing units in good repair and Section 8 units in a decent, safe, and sanitary condition. Eighty-eight percent of the inspected public housing units and 6? percent of the inspected Section 8 units did not comply with Housing Quality Standards. The de?ciencies are due to failure to implement an effective and ef?cient maintenance program in public housing. Additionally, did not conduct adequate inspections of the Section 3 units. As a result, tenants are residing in indecent, unsafe, and unsanitary conditions and HLTD is paying Housing Assistance and administrative fees for units which do not comply with Housing Quaiity Standards. Part 2, Section 209 of the Annual Contributions Contract requires the authorityr to, at all times, maintain each Public Housing Project in good repair, order, and condition. 24 CFR 882.109 mandates Housing Quality Standards which must be maintained in Section 8 units1.11.--.- The Housing Quality Standards state that HUD- assisted units must be maintained in decent, safe, and sanitary condition. HQS requires that each unit have: private sanitary facilities that have a toilet, washbasin, and hot and cold water, in full working order; space for food preparation and storage, a sink with hot and cold water, and an operating stove and refrigerator; (3) adequate living space that has lockable windows and doors; (4) safe, fuily working hating systems which provide heat for the entire unit; (5) ceilings, walls, and floors without anyr severe bulging or leaning, large holes, or loose surface materials; (6) surfaces freeof cracking, scaling, peeiing, chipping or loose paint; and, freedom from vermin and infestation. The HQS requirements are further explained in the Housing Inspection Manual, Section 3 Existing Housing Program. . ii houses rug. soar-sonic? Finding 2 HUD Handbook 7460.? paragraphs 5~2(b) and state that the public housing authority must implement a preventive maintenance program for mechanical, plumbing, heating, electrical, structural, and roo?ng systems, that includes timelyr repairs to clearly operate and maintain projects in a safe, effective, and economical manner. Section of the National Housing Act provides that the public housing authority will assure that sound management practices be followed and that satisfactory standards for the project maintenance are formulated and fully and effectively enforced. 7 -- We inspected 148 units . 61 public housing and Section qquimdmd? 3. 'Five public housing units were vacant. We selected the 3. . units from total housing stock of 3,253 public housing and 5,633 Section 8 units, using attribute sampling techniques. Each unit was inspected using the HUD Housing inspection Manual. Secrion 8 Existing Housing Program, as the inspection guide. Fifty-four of the 61 public housing units, 88.5 percent, and 58 of the 87 Section 8 units, 66.7 percent, were not in good repair and did not meet Housing Quality Standards, respectively. Four of the seven public housing units which met housing requirements were located in an elderly complex, and two were vacant and newlyI renovated. Overall, the elderly complexes were maintained in a better state of repair than were multidamily complexes. Summarized below are de?ciencies, by category, noted in the public housing and Section 8 units which did not meet Housing Quality Standards. Detailed descriptions of these de?ciencies are contained in Appendix A. l'H' mm There were 79 instances where peeling or chipping paint posed a possible lead?based paint hazard. These instances included hazards on walls, doors, window frames, and ceilings. For example. the paint on the bathroom walls and ceiling in unit 110 at Brentwood Park was peeling so severely that the tenant leaves the bathroom door closed so she does not have to see the paint as she walks by the bathroom (see photo next page). "i ,x g, )it. star-tome? me I Ending 9. EM 3111;3de W13 iden??ed?? "incidants 11323115. The hazards included n?ssing a broker: out-lat 90113113, expoaed wixmg and elecnlisiai 1101112513113, imprope?y greundad outlets n63: ?ak-s, 51113111131131.1me attached Light ?xmres. Fer 33511111316, 11:113.: 1111? located 2.30 E2131: 1.1-: Swat, an 11.11am- i?g?n ?3156, ?had algose? ales?cal wit-mg from the 211.1: 33111111101115 and 211 ?113ch pu?st 1111:5113: above. the sink. 151111 number .31 Ianaied at 160'? Brook Fares; had ei?tricai 1111-1113315 in the f?gerawz and rear porch light, a 11115-5133 ilii?hi ??ml'e on me front porch, and a waging caves, Ad?i?onwy, a ?ght ?xture was not seem-?111 attached and 116113 at" the 11gb: ?xmr?s had globes. Page 9 922113-3014th Walls and gelling; There were 34 instaetees of defective wail eenctitions anti 3.3 of defective eei?ng ceaditions. De?ciencies inducted Willis and with large hates, sev ?e miidew, and water damage from leaking reefs and faulty plumbing. Addi'iienalif, there were small holes, missing batmoem accesse?es, and enemies}; wells that needed painting. For instance, unit 117 located at 1-643 Gulf Forest had large hoies in the Being room and bathroom walls, (see photo) and kitchen ceiling. 13'! another example, the kitchen walls in unit 345 at 645 Ceurt East Elodget't Homes. were so smoke and mildew ?amaged that the white paint en the walls eeu'td beret)! be seen {see phom next gage}. @92- Page 2' I L. 14-! 1 ?1-11: ?1 93? w. :53 fit.) me <30 ?u-q wait) ?as 3% gt: 3.5: rm :5 at? lg EH 3333 5.1.: or; 5:35 8 u?I '3 is?: m?i ure?. window my set: dequat missing Gr ma window locks 3 ??33191: :3 770 Anders P35: and 1607 133.1163; and, defes?ve deer iaiches and locks. Far locatad at 1 units 303 and 81 re accessible ?u?mgh the we 1- acme res? the adjeining unit I. ?a Basal; Fores- .- DI attics inmates of ed3ash'nas Sinks! 16110135 asins. De?c 'Usiy (1.6., :12- hot or cold imperative a: defective sia?gs and wash}: inc 1 gagged It A- 6 W333 i adequ leaking and dripping pipes and ?nest; 3331531 uded 1 water 1-1024 I?ll .. 92. 11 Page .n drains; and brakes: cracked; as rusted porcelain. Fer example, the Jere icitehen sink leak is: unit 38 at .1530 6011? Forest, the tense: te get are buckets under the pipes {see phete). The ieais: was unce?emed for so long ti e: the surreusdieg limiter: cabinets were zoned out are! the fies: as were damaged. - a ,w I. :i?khr a? .- Wittg- HQ tars. We identi?ed 30 instances of unsafe or defective water heaters. De?eieneiesinciuded: impreperly instsiles 01- missing temem'mre and pressure reiiet? EFBEVES and discharge limes; imperative water hesiers; ass espesed eieetsicsi wiring. For exam-?e, the ctiemey pipe or: the water hes e: is unit 21 at 3711 Newton was impinges}; instaiieci; the discharge line was ef improper design and was tncc-neetiy installed; the gas tine it} :he burner was severeijir itiniced; end the axes surrounding the water heater was esed fer sterege by the tenant wi?eh preseniee 2. safety hazard. is eight other units, the water heaters were leeated in enclosed cabinets and, therei?ere, net sceessibie fer if? :1 44 b1 433232.33 3 2222-332 3.23.334 21.23243 3.4: 2-34.: 3 -4 3.443. 3330333332 432334-23 342.22 323333315 34: 1342 343..? 3.33, 3233.3 333 43, 3.34: 3.44 312. 33333423 2.3343 3333433331 233331243. 3.3. 31:33 38 23 353-0 Golf 3333253, 4312: 321113.332 T333235 132:: 43533:? 3 331 32133.3g {322. 3331343}. r) 53343? 3 - SL1H22HL: 335 11.341 333323233142 33 {12323323 533222 -- 44:13-32:23: '22 344222 3144.3 ?34.123232. 3-3: - 323331332 ?4312 '432 43-434 34 5:73: {3335323334 343:: 3443}4 34:2 332:: 4344-2 34433343333313, 433.2 31423 33.43 3443 3343312.: 33 3342 24332 4442432 444332234322, 33 3333144033 33339 3333413443343 4332343412- 33243:. Panama-4 3303324143 3'24'2 34:432.. 4.3332. 3?3. 4?2 3-: 33341233332 322343.33. T342 31344444343133 3423323 33 33341.4. 2.: 344,431: 3: .447: 134- 43444 ?7 ., ?l at ?nding 2 . i604 Brookforest had been inoperative for 3 yms. Additionally, the upstairs heater, located in the hallway, could not heat the 3 bedrooms since the heat flowed down the hall to an open Stairway. 2, ?ecgon 3 Emil??l lk?giengig shipping Paint. We identi?ed 22 HQS violations of lead paint requirements. Violations included hazards on interior and exterior walls, doors, window frames and ceilings. W- We identi?ed electrical violations. Violations included broken or frayed wires, missing or broken cover plates on switches or outlets, exposed wiring and electrical contacts, outlets near sinks not properly grounded, and light fixtures hanging from electric wires with no other ?rm support. Spying. We identi?ed 13 violations of security requirements. These violations included: missing, inoperative, or defective window locks; and defective door latches and locks. Windows. We identi?ed 23 violations of Standards for windows. Violations included: windows with missing, broken, dangerously loose, or cracked panes; windows that would not close; and, windows that, when closed, did not properly seal. Additionally, several units had windows with defective crank mechanisms or windows that would not stay open. All of the Madows in the unit at 2259 College St. were defective. The windows either had cracked panes, would not seal properly when closed, or would not open properly. Ten units had sinks and ii units had washbasins in violation of HQS. Violations included: inadequate water supply no hot water or cold water, or no water); leaking and dripping pipes and faucets; clogged drains; and broken, cracked, or rusted porcelain. The plumbing to the kitchen sink of a trailer located at 13542 West 1st Street had a severe leak which caused extreme damage to the underside of the trailer (see photo next page). Pugs l4 Water Heaters. We noted 25 HQS violations regarding water heater-s. Viele?ons include?: missing me imprepesiy Emailed temperature arid pressure relief valves and discharge iinee; i; gereperly installed. fl es; and expesee wiring. Fer exmnpie, Ehe veier 'Eteater ea; 66 West 33th Street hai- an imp: pee}; insea?ed disehezge line which had been downsized free: a line at the :e?ef? veive eu?e: :e 12?2? line, 221 impregeeri}? Emailed remeezemre and pressure eiie?? valve, and exeesed ei?iricel wires.1 In '13 ether units, the water heaters wee located in cabiraets and: merei-?ere, nee accessible for inspection. As a result, we mien; these eraser heaters es feeteijg-p . fwenty-feur units were vermin infeste?. Pet . exe; .915, the unit 3: 3-339 Rese?e Stu-Tee": ?wes ?remen with reaches and eats. The Leela-12 stated 1: 32 rats in eerie es until er? Enema: Buiiding 1986 Edith; on? ??ne and ?Ewe Feaiiy Eerie? staiee shei] new: be smile: ihae :he :elief-valve outlet. Fags 15 92-AT?201-1?i-i Finding 2 Unit maintenance and - inspection. inadequate occasionally run through the house. The numerous holes and spaces on the exterior walls and nerves of the unit allowed rodents to enter. Rodents were heard in the attic during the inwtion. Adeguaev Qf ?oat. We identi?ed eight violations regarding inadequate Iii-eat. Many units had only one heater which was insuf?cient to heat all living space. Unit located at "?08 Shearer Avenue did not have a heater. The tenant stated that the landlord moved the heater to another one so line to the heater was uncapped and a small child lived in the unit. Additionally, the heating equipment is inadequate to heat the upstairs of 205 Section 8 units at Roosevelt Apartments (See Finding 7 for further discussion). The aforementioned de?ciencies exist because JHUD management failed to implement a comprehensive and coordinated maintenance program for pubiic housing. Additionally, did not perform adequate inspections of Section 8 units. Speci?cally, IHUD failed to: implement an effective preventive maintenance program; properly manage and supendse maintenance work and employees; maintain suf?cient records of the work performed to assess and monitor the overail effectiveness of the maintenance program; and approve only Section 8 units in compliance with HQS. In violation of HUD Handbook 7460.? .JHUD had not implemented an effective preventive maintenance program. A June 1988 Management Review conducted by the Jacksonville, Florida, HUD Field Of?ce addressed the need for JHUD to implement a preventive maintenance program. As a result, the Central Maintenance Chief designed a ?preventive maintenance? schedule. However, as of September l991, this schedule had not been implemented. The schedule contained many work items, however, none of the work was completed timely due to higher priority maintenance needs 'Generaily, JIHUD maintenance personnel did not perform adequate preventive maintenance but operated on an as needed and crisis basis to repair, rather than prevent deficiencies. Page 15 . Inadequate I'd-f maintenance workm? emulates Finding 2 Based on JHUD's belief that long term vacant housing stock was too damaged to rehabilitate timely, it concentrated its central maintenance staff on maintaining occupied units. These employees performed repair services only. Even so, they did not complete jobs until 5 to 6 weeks after requested or scheduled. Through funding from the City and a Community Dwelopment Block Grant, JHUD retained 30 additional2 maintenance employees to ready vacant units for occupancy. This make ready crew was credited with increasing the available housing stock by 100 units (which represents a 16 percent decrease in the number of vacant units) during the past year. Except through Comprehensive Improvement Assistance Program funding, did not repair vacant units which were severely damaged, or vandalized. Consequently, these units were allowed to remain vacant for long periods of time, thus contributing to a worsening condition. Concurrently, the make ready crew turned over the same vacant units repeatedly. The maintenance work and workers were not properly supervised. As a result, crews were not motivated, productivity was low, and workmanship was inferior. While aclmowledging the adequate staf?ng level of the maintenance department, stated that, in part, staff problems caused an inability to operate the maintenance program effectively. Problems with some of the staff included: low or no employee performance. illiteracy, and poor attitudes. stated that while part of the staff worked productively, could operate a more effective maintenance program with the same number of staff if the entire staff worked ef?ciently. Also, due to inadequate supervision, the maintenance staff performed non?priority and inferior work while neglecting more urgent needs. For example, on~site maintenance staff at Golfhroolc mowed 23 lawns in a 7?day period despite the fact that none of the units we inSpected at Golfbrook were in a state of good repair. The interior of the units inspected suffered from health hazards, inoperable appliances, and unsanitary 130 employees have been retained since ?scal year 1989. Funding for employees is not in budget. They are, therefore, excluded in assessments of staf?ng level. As a result. neural maintenance ef?ciency is lower than otherwise determined. Fuse :7 sz-ar-zot-tou Finding 2 Maintenance-?does not repair unsanitary units; . Deficrentqualtty control ?-AT-i?ltl?td MW ??ned condition. Also, the quality of the lawn maintenance was unsatisfactory as evidenced by the overall poor aesthetics of the projects. Poor work perfonnance was also encouraged by an unacceptable unwritten "poiicy' veri?ed by the Public Housing Division Chief, Central Maintenance Chief, and a project manager. According to the 'poiicy,? maintenance staff are not expected to work in unsanitary units. Project managers are to ensure that tenants maintain sanitary premises. However, if not so maintained, maintenance staff are not expected to work in the unit. Due to this policy, a tenant was living without operable appliances, including hot water, and in an overall dilapidated unit. The Project Manager stated that when the tenant cleaned the unit, the maintenance staff would begin repairs. Inadequate supervision was also evidenced through JHUD's failure to implement a quality control system. policy states that at least 5 percent of completed work must undergo quality inspection by managers and 20 percent be inspected by crew foremcn. According to Public Housing Management Procedures Manual, Chapter 12, work orders should be monitored to determine, among other things: the ratio of total work orders completed to those requested within the established deadlines for each priority, the number of completed work orders per day per employee compared to established IHUD standards, and the quality of maintenance work as measured by management spot checks. Even though the project managers and Central Maintenance Chief stated that quality inspections were conducted, no documentation was available to evidence such reviews. Also, our review of work orders at multi-farnily complexes determined that: work orders do not always reflect the actual time elapsed between the request and completion of work: work orders were sometimes prepared after the work was completed; and some work orders were outstanding for over 200 days. The Central Maintenance of?ce did not accurately record work requests and correspondingcompletion time. Work orders were prepared the day work was completed. Page II Finding 2 Inadequate inspections of Section 8 units . -- - Summaryr Consequently, it appeared that work was completed the same day requested and the actual time required to complete requested work could not be determined. Also, a separate work order was prepared and maintained for each type of work perfumed. Therefore, a search of all work orders would be necessary to determine all the work completed for an individual unit. This prohibits timely determining the number of actual days required to turn the units over. Additionally, a log maintained to track the time needed to ready units was not accurate. A former employee responsible for maintaining the log duplicated dates, did not enter dates, and entered incorrect dates. Consequently, the documented work results of the Central Maintenance Division were inaccurate. Without an effective system of control records, management cannot properly monitor Operations .. identify problem areas, the time required to complete work, and take necessaryP corrective action. .IHUD failed to identify all Housing Quality Standards violations during inspections of Section 8 units. HUD prescribed guidelines in the Housing Inspection Manual, Section 8 Existing Program, to be followed in determining compliance with Housing Quality Standards. IHUD, however, did not strictly adhere to the HUD inspection criteria. For example, JHUD failed to identify a Section 3 complex of 205 units that did not have adequate heat (see Finding 7). Also, JHUD approved units that had incorrectly sized water heater temperature and pressure valves. Overall, however, the Section 8 units contained violations that were less severe and frequent than the public housing units. Also, the Section 3 inspector required landlords to correct all deficiencies he noted. failure to identify all de?ciencies, though, resulted in 67 percent of the Section 8 units not complying with Housing Quality Standards. housing stock of public housing and Section 3 units was not maintained in compliance with HUD requirements. This occurred because management failed to use its maintenance resources to adequately maintain public housing units. Management also failed to adequately inspect Section 3 units and ensure that the units Page is coarser-tort true Finding 2 Auditee Comments 01G Evaluation of Auditee Comments were maintained in compliance with HQS. In our random sample of 148 units, taken from the 8,896 units of public housing and Section 8 stock, 112 units, or 75.7 percent, were not maintained in accordance with HUD requirements. Based On that saniplc, we can say with a great deal of certainty that IHUD inadequately maintained most of its housing stock.? Consequently, tenants of both programs resided in dilapidated housing which HUD subsidized. The Executive Director generally concurred with our ?nding. The complete text of the auditec?s comments are presented in Appendix C. Following is a synopsis of the Executive Director?s proposed corrective actions. has implemented corrective actions including: conducting systematic inspections of all units; updating it's preventative maintenance program in accordance with HUD Handbook 7460.7; and letting a contract for design and implementation of an automated work order system. The work order system: should ensure proper accounting and improve quality control for maintenance work performed. Additionally, Section 8 inspectors now follow the Housing Inspection Manual to determine compliance with Housing Quality Standards and inspectors will be "audited" on a routine basis. The auditee's comments are responsive to our ?nding. We recommend implementation of the following actions to correct the noted de?ciencies. 3 Statisticaliy, we can say with 95 percent con?dence. that the scent error rate is at least 67.2 percent and not more than 31.7 percent. 0r, hen-reed 5,937 and 7,268 of die 3.896 Section I and public housing units would not meet housing quality standards. Purim Recommendations We recommend that the Jacksonville Field Of?ce require Finding 2 to: 2A. 23. Develop and implement a comprehensive maintenance housing program to: correct all housing de?ciencies and violations; and ensure that units are maintained in accordance with HUD requirements. Require owners of Section 8 units which did not pass HQS inspection to correct the de?ciencies within 30 days. If the de?ciencies are not corrected within 30 days, abate the housing assistance payments. hge 21 [on r7 Finding 3 HUD DID NOT PROPERLY ADMINISTER THE COMPREHENSIVE IMPROVEMENT ASSISTANCE PROGRAM JHUD did not administer the Comprehensive Improvement Assistance Program in an economical, effective, and ef?cient manner. Neither the Former Executive Director nor the Director of Housing ensured that funds were expended onlyr for quality work complying with contract terms. As a result, made payments of $7,185,177 for contact work that did not meet Housing Quality Standards, procured fencing costing $50,820 that was not needed, and overpaid contractors at least $25,141. Additionally, contractors were harmed by both the lack of of?cial information and misinformation provided them which was crucial to their satisfactorily completing the contract. IHUD has a contracting hierarchy - According to HUD Handbook 7485.1, Rev-4, Public and Indian Housing Comprehensive Improvement Assistance Program, paragraph 10-15, the public housing authority shall have the ?nal responsibility for ensuring work quality and progress. Paragraph 7-3, requires the public housing authority to perform certain functions to ensure modernization progress. These functions include: developing an overall plan and time table for the implementation of approved modernization programs; establishing internal administrative controls; procuring Architectural and Engineering services; and overseeing the entire construction contract process,? including the preparation of bid documents contract awards, change orders, settlement documents, and time extensions; and performing on-site inspections of contractors. JHUD established a staf?ng hierarchy to adequater accomplish the preceding functions. With the assistance of the Technical Coordinator and Technical Advisor, the City of Jacksonville?s Purchasing Division procures the contracts for mm. The Technical Advisor prepares and - me an Finding 3 Technical coordinator voids primary responsibilities Revie?m?mmoiog 15.; \v-W issues all modernization contract documents such as construction and bid documents, contract awards, and contract changes. Once awarded, IHUD is responsible for administering the contract. The Former Executive Director assigned all primary CIAP responsibilities to a Technical Coordinator who reports to the Director of Housing. A Technical Advisor and Inspector report to the Technical Coordinator. The inspector is to report any noncompliance with contract documents or deviation from quality workmanship by the contractor. Additionally, the Executive Director, Director of Housing, and Technical Coordinator must approve contract change orders and payment approvals. However, IHUD's Former Executive Director and Director of Housing were not actively involved in the process. They fully accepted the Technical Coordinator?s unsupported assertions. Consequently, the Former Executive Director and Director of Housing approved payments without making af?nnative determinations that the payments were appropriate. To determine the adequacy of the overall administration and contract performance under CIAP, we reviewed sis contracts. Five of the contracts were ongoing during our audit and one was completed. The completed contract was for the installation of underground pipes. .We did not ?nd major de?ciencies in the contract documents and since the completed work was underground, we were unable to assess the quality of workmanship. We did, however, note major deficiencies in the adnunistration of the ?ve ongoing contracts. administration of each of the ?ve ongoing construction projects was inadequate. Speci?cally, JHUD: did not properly monitor contract work; approved renovated units that did not meet Housing Quality Standards; did not adequately coordinate - assess the need for, schedule and plan - contracted services; reduced the scope of the contracts without reducing the contract price; and provided contractors misinformation or no in formation to their detriment. Page Finding 3 - According to 24 CFR Part 963.251, the public housing IHUD . .. authority shall provide, by contract or otherwise, adequate monumfm??, and competent supervisory and inspection personnel during modernization, whether worlr is performed by contract or force account labor and with or without the services of an architchengineer, to assure work quality and progress. HUD Handbook 'i'435 .1 paragraph 'l?w3, states that inspection reports should cover compliance with the contract doCurnents by the contractor, and any deviation therefrom, quality of workmanship, timeliness of delivery of mate?als and of performance, need for contract changes and time extensions, and any construcu'on problems which may arise. To assess monitorinb of contract work, we reviewed inapection rcporLs completed by inspector for re-root'ing projects at two of public housing complexes, Brentwood and Ramona Park. Additionally, we inspected the construction and workmanship of the two CIAP rte-roo?ng projects and fencing provided under an Annual Supply Contract. Overall, IHUD approved contract work without properly supervising inspection personnel or contractors. Technical Coordinator relied solely on the inspection reports submitted by inspector and, if applicable, a consultant architect without overseeing either. The reports, however, were not suf?cient to judge either the quality of work or compliance of work with contract requirements. Inspection of completed work inadequate JHUD's inspectors submitted reports to the Technical Coordinator which were merely status reports and did not comment on the quality of work performed or if actual performance complied with the contract. For example, the reports would state, 'tear off Started? or ?shingles started.? ?The Technical Coordinator stated that he felt the inspection reports were acceptable and, in the absence of noted de?ciencies, concluded no de?ciencies existed. He did no" conduct independent inspections of the contractors' worlr or perform other procedures to af?rmatively assess the quality of work. Quite to the contrary, an inspector indicated the Technical Coordinator instructed him to not prepare written reports of de?ciencies unless the Technical Coordinator requested a report. Page as star-aorta: 4 De?ciencies xii-r: e113: 13:11? ex 111119 e= STUD failed to 1-511: aiify- roofi?g. 11e111e 11501121111 Project. 11': genera. the 1.1111111111111131 was uejccepiabie 1:111 de?ciencies. is1e?111ded: sof? :13 1'1: eeves1'1' 11* re wavy, 1.111;? 11-31?. ?ee-11 1111.11 .11 1.111151% 11:11.? 1113:3131- .esta'dee 1.1 1.1111111. 11'1e..1 111-111 edges 111211111. 11ers 11-131 nailed eref1er'1', 1111c dete?ora "ed wee-1:- whien was eel: replaced 1e 'Lhe (see 5.1110111). The Teei'micai 13111111111111): became 1111133 101' {?16 foregeing de?ciencies L3311113112111 3111' 111.111.1132 ?ice and -1 1111': 1.110111: was 90 percent cerepi centaeter had already been paid 3132.430 111' the 13 comma: grim. heed'eeok 7435.2 33.71111 eaegeapn states: "The fe?ure 1: ?nd and 0011-22: 11111101: 1' .f ad deterioration in the easiiesi Siege :1 '13 :11e greatest cause cf premamee roof problems. JI-ZUD contraced 111111111 -11jteererei 11.1111 Lespec?ens of the interior 111111;! renew-20113 e1?; Brentwood. The Architect's inspee?en 1113111? 13 were eensiderabiy mere Page ?25 Finding 3 thorough than the reports completed by inspector. However, we also noted de?ciencies which were not identi?ed by the Architecc For instance, we observed painted walls which were not properly primed and ?nished, so several layers of paint were applied without removing the old peeling lead?based paint; washer connectors which were improperly installed; door hinges, although broken and deteriorated by rust, were not replaced; and a ceiling which was sagging. HUD Handbook 7485.2 Rev~l paragraph states: ?Paint used on the interior and exterior of buildings shall not have a lead content greater than that amount permitted by 24 CFR part 35. Current HUD regulations require all surfaces identified as an immediate hazard (paint that is - cracking, scaling, chipping, peeling or loose) to be thoroughly cleaned (washed, sanded, scraped, wire brushed or otherwise cleaned) to remove all cracking, scaling peeling, chipping, peeling or loose paint. Surfaces shall be repainted with Mo coats of suitable nondeaded palm.? Paragraph lO?6(d) states that walls and ceilings shall be stable, anchored as required and free of moisture penetration before finishing. Also, Paragraph 10-7., states, doors shall be operable, in sound condition and free of holes, cracks or material deterioration. in spite of the deficiencies we noted, the ?Technical Coordinator felt comfortable in relying solely on the Architect?s reports and did not see a need to scrutinize the Archite'ct?s work. He further stated that the Architect was the most professionally competent to determine the acceptability of work. However, the de?ciencies we identified, which were not also identi?ed by the Architect, demonstiam that the Architect?s evaluation was not suf?cient. Additionally, the type of de?ciencies we noted were not extremely technical in nature, and should have been caught by the Technical Support Staff. Jralso failed to adequately supervise an Annual Supply Contract to provide up to $175,920 of fencing at public housing projects. JTHUD failed to identify: misaligned fencing; improperly installed concrete for the posts (see photo next page); damaged fencing installed; and, the hazardous usage of corner brackets. pl,? 21* soar-2014c? if. I . . .. Mania .mwwHodmn HH .mwmugnom .me HE gnaw 55 85338 NH 3.95m MS. ?mnm?hmuom 5E wno?am mam. Hum mc?w 5 3me anwHH?um . HH..H. 55.55 mum HommH. mam HmnEQnm. 53mm 6 5555333 .5 9.59. 8 .155. 0H. ?#55 .93?.me 355 @85me .HH Putnam 535.1% H.333 Sign Ham 6.555% ?aw. 85.5553 535.505 SH. SH HH Ho. .H .55 5.5. 5.55 .. H5 52 magnum. PHD ?0:on ?aw Em an 9.53. EH5 20H HH. 0H. 3.5. ma?a EH H.353.5H. H553. ?mama Hm 12mm mun. mm. gram GE wwmm?mmn 1 I. 83.39.. @5me agar Pam mwnl??mm. wanna moan .3 En wwmomnqo Ma?a. mum Ewe ?Em: NE: Emma mam Max:153 mo?m?n. 3mg 3.. EH Em ma?a 35 on gm wean Ema 43.3 .3823. 9m 25 annu?mm can, own Banana Emu mum m3 Ram 05%. 3mm mom 9mm .23 mm?mmo??m Ba 33 awnww?m. 9.5 Em 35 Emma mam wan Emm n?nw 1% nwmham $11,133. H: 3.5 33$me .w Emm 30me gamma Emu gamma mu?? En ESQ. .5 ?ag amm?am Sm Hun?; mam imam 3% ?human 8 SEE Em num?n?m .2 mvamm Hm .3 Z. 7; Finding 3 and planned the needfor contract work 7 {Miran-201.1014 the surface before painting. So, the contractor was allowed to paint the untreated surfaces. JHUD further stated that in addition to the untreated surfaces, the peeling and cracking paint was partially caused by a lack of ventilation and high humidity. HUD Handbook 7485.2 paragraph requires the surface to be free of chipping and cracking paint before repainting. In addition, HUD Handbook 7485.2 paragraph 10?6 requires that in areas subject to water or moisture kitchens, bathrooms and iaundries), wall, floor and ceiling finishes shall be resistant to water, moisture, and damage from grease, detergent and normal household chemicals. Even though conducted ?nal inspections of the units before occupancy, they approved the units even though they did not comply with Housing Quality Standards. As a result, HUD is paying $5.6 million dollars for renovation of units which are below standard. IHUD poorly assessed and planned the contract work. For example, they installed a security fence around a project which did not need fencing. Also, the work of two general contractors overlapped. As a result, excess fencing was installed and the division of responsibility regarding the de?ciencies of the renovation and rooting at Brentwood cannot be determined. According to 7435.2 Rewi, paragraph 10?5: 'Fencing and _railing shall perform their intended function in an ef?cient manner. Fencing shall not crate hiding places for potential criminals. Fencing and railings shall be stable with securer anchored members.? installed fencing at the Ramona Park, Brenna/00d, Pottsburg, and Baldwin public housing projects. The Technical Coordinator stated that the fencing was installed to control vehicular traf?c and to keep criminals from entering the project unseen. However, the fence was not necessary at the Baldwin project. At one phase of the Baldwin project, eight units face each other in a clean, quiet, and rural neighborhood. According to the Baldwin Police Department, nondomestic crimes at the project were not a problem prior to installing the fence. Page 30 Scheduling caused signi?cant problems" Finding 3 Also, the fencing did not follow property lines which created dead spaces, thus hiding places for potential criminals which destroys the intent of the fence. Consequently, unnecessary fencing was installed which detracted from the scourity and aesthetics of the project at a cost of $50,820 to HUD. JHUD did not adequately schedule the cempletc modernization of the Brentwood Project. IHUD awarded two separate but concurrent contracts one to re-roof the Project and another to completely gut and refurbish "the units. We observed major de?ciencies in the quality of work performed on both court-sets. However, did not identify these de?ciencies timely and paid the roofing contractor $360,397 of a $475,441 contract before identifying the de?ciencies. Also, JHUD was not able to ascertain the responsibility of each contractor to correct the problems noted in the units since both contractors were allowed to work simultaneously on the units. While the Technical Coordinator acknowledged having dif?culty in assigning responsibility to contractors when problems were identi?ed at Brentwood, IHUD blamed the roo?ng contractor for all problems identi?ed with the interior of the units. The Technical Coordinator and staff stated that interim unit water damage occurred because the roo?ng contractor improperly installed the flashing. However, we noted water damage and de?ciencies in the interior of units where ?ashing was not bistalled by the contractor. Also, the contractor responsible for renovating the interior of the units failed to perform quality workmanship .in painting the units. - Because JHUD scheduled the renovation of unit interiors prior to ?nally aCCepting the roofs, the division of responsibility for daniaged units was hampered. Prudent business practices dictate that only one general contractor work at a construction site at a time. JHUD admits that poor scheduling of contracts resulted in divided responsibility for the damaged uni-ts. However, JHUD chose to blame the roo?ng contractor for all damage. The 31 star-201-10? 7&9 Finding 3 . a contractor work"~ 92-AT-I?ld?ld flit-Tides". IHUD overpaid a roofing contractor $15,432. IHUD re- roofed the Ramona Park project for a total cost of $225,284. The contract required two layers of felt to he laid. However, the contractor, under direction, only laid one layer of felt. The Technical Support staff stated that since the roofs had a 4i12 inch slope, industry standards required only one layer of felt. Even so, the Technical Support staff did not reduce the contract price when the scope of the contract was reduced. Accordingly, JHUD overpaid the contractor by $15,432, the cost of the omitted felt. Furthermore, HUD Handbook 7435.2 REV- 1, paragraph 944 indicates the two layers of felt were required for roofs with 2! 12 to 4i12 inch slopes. A HUD engineer indicated that omitting one layer of felt increased the risk of water leakage. also agreed to pay another contractor $l5,593 for $5,839 of work, an overpayment of $9309. This involved a contract for the renovation of the stairs and balconies at Anders Park, a public housing project. The contract required replacement of balconies, steps, and deteriorated wood, and painting of the railings. Prior to our inspection of Anders Park, .the contractor and JHUD stated that contract work had not begun. However, during our inspection we noted the balconies had been replaced. The Technical Advisor was not previously aware that the balconies were complete but indicated the work was most probably performed by maintenance staff. The contractor consequently completed the required contract work on the steps and railings. However, the Technical Advisor made an oral with the contractor whereby the contractor painted railings and replaced deteriorated wood as substitute work for the work no longer required on the balconies. These actions violated 24 CFR Part which states that except in an emergency endangering life or property, the public housing authority shall with HUD requirements either to (1) submit the proposed contract modi?cations for prior HUD approval, or (2) certify that such modi?cations are within the scope of the contract and that any additional costs are within the latest HUD- approved budget or otherwise approved by HUD. Page 32 Finding 3 already tn the: i IHUD provided contractors with unof?cial information and misinfonnanon to their: detriment We determined that the ?substituted" work was not additional work but was required under the original contract. Also, we estimated the cost of work performed on the balconies at $9 709 'I?herefcre, the cost of the contract should have been reduced by 709 The Housing Director agreed that the contracr should and would be reduced. The Technical Coordinator and Technical Advisor were allowed to orally communicate crucial contract information to the connectors. HUD Handbook 7485 I 4 paragraph 9 14(g), States that upon being noti?ed by its architect or the General Engineer of construction de?ciencies the PHA shall notify the contractor in writing of the de?ciencies observed. For example, the Technical Coordinator directed the. Brennvood roo?ng contractor - much to his strong objection to install a particular type of roo?ng vent. The contractor felt the type was faulty for the roof and attempted to obtain a written confirmation of the verbal inatruction, but the Technical Coordinator would not provide such a statement. Subsequently, the roof leaked and JHUD has held the contractor solely responsible for the leakage, including damage to the interior of renovated units. The contractor believes that should bear the responsibility for damage resulting from the vents. Also, the Technical Advisor was allowed to design hid speci?cations, physically inspect the contract work, as well as make and verbally communicate to contractors changes to the bid Speci?cations. verbal instructions adversely affected the workmanship of the contractors. IHUD either did not detect or overlooked numerous deficiencies identified during our review. The Former Executive Director and Director of Housing approved payment to contractors without requiring the Technical Coordinator to provide support for the acceptance of the work performed. We believe had the Former Executive Director required support for the acceptance of work performed, as required, the de?ciencies would have been detected before payments were made to the contractors. Overall, the lack of management attention to the CIAP, thus ensuring that CIAP funds were expended only for quality work which complied with contract documents, Page 33 sterner-tort