Audit of the Wellesley Housing Authority
May 30, 2018 · Wellesley Housing Authority · Read the full official report on mass.gov ↗
Published May 30, 2018 Audit covers January 1, 2014 – December 31, 2016 Under Suzanne M. Bump · 2011–2023
source
“During the audit period, the Wellesley Housing Authority purchased refrigerators, ranges, and water heaters totaling $113,206 without using a competitive procurement process.”
Read the plain-English breakdown
This is a Massachusetts State Auditor performance audit of the Wellesley Housing Authority covering January 1, 2014 through December 31, 2016, with inventory work extended to May 1, 2017.
“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, January 1, 2014 through December 31, 2016.”
The State Auditor reviewed selected parts of the housing authority’s operations, including inspections, tenant eligibility, purchasing, inventory, rent reviews, board governance, and its management agreement with Needham Housing Authority.
“In this performance audit, we reviewed and assessed certain aspects of the Authority’s operations related to administrative expenses, annual unit inspections, tenant eligibility, applicant waiting lists, procurement of goods and services, board governance, inventory of fixed assets, compliance with applicable reporting requirements, and the Authority’s management agreement with the Needham Housing Authority.”
Poor records and weak controls can make it harder to know whether public assets are protected, purchases are fair, housing is safe, rents are correct, and applicants are treated properly.
“The lack of a complete and up-to-date inventory list creates an undue risk of undetected loss, theft, or misuse and could result in inaccurate asset values in the Authority’s accounting records.”
For tenants and applicants, the audit matters because it touches basic issues like safe housing inspections, fair waiting lists, and correct rent calculations.
“When units are not regularly inspected, there is inadequate assurance that they conform to state and local minimum standards for safe and sanitary housing.”
The auditor concluded that the authority met some requirements, but failed several important ones related to inspections, tenant eligibility, procurement, inventory, rent reviews, and the Needham management agreement.
“We used nonstatistical sampling and did not project the results of our audit tests to the entire population.”
The report tells the authority to strengthen policies, keep better records, reconcile inventory, follow procurement rules, retain inspection reports, fix rent and application procedures, and get DHCD approval for management agreements.
“The Authority should conduct an inventory of all ranges and refrigerators, reconcile it to the current inventory list, and investigate any discrepancies.”
DHCD means the state Department of Housing and Community Development; LHA means local housing authority; Section 8 is a federal voucher program that helps low-income families rent housing.
“Section 8 housing programs were developed by the US Department of Housing and Urban Development to help low-income families obtain affordable housing.”
2 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Does the Authority perform and document annual inspections of all housing units?
- Complied Are the board of commissioners’ meetings held as required, are there quorums at the meetings, and do the commissioners oversee and govern the Authority’s business affairs?
- Did not comply Does the Authority ensure that eligible tenants are housed in accordance with the requirements of the Department of Housing and Community Development (DHCD)?
- Complied Do the Authority’s administrative expenses have adequate supporting documentation, and are the expenses related to the business of the Authority?
- Did not comply Was the Authority’s management agreement with the Needham Housing Authority approved by DHCD, and are the contract amount and all payments to the Needham Housing Authority under the contract appropriate?
- Did not comply Does the Authority procure goods (specifically ranges, refrigerators, and water heaters) in accordance with Sections 2 and 4 of Chapter 30B of the General Laws?
- Did not comply Does the Authority maintain a complete and up-to-date inventory list of its ranges and refrigerators and conduct an annual physical inventory in accordance with DHCD requirements?
- Did not comply Did the Authority perform rent determinations and annual rent redeterminations during the audit period and correctly calculate rents in accordance with DHCD requirements?
What the Auditor found
Why it matters: This increased the risk of undetected loss, theft, misuse, and inaccurate accounting records.
Standard: DHCD Accounting Manual Sections 8 and 15(d), and the Wellesley Housing Authority Inventory and Equipment Policy ( Section 8 of the Department of Housing and Community Development Accounting Manual; Section 15(d) of the Department of Housing and Community Development Accounting Manual; Wellesley Housing Authority Inventory and Equipment Policy )
2 recommendations
- The Authority should update its written policies and procedures governing all aspects of its inventory process as well as monitoring controls to ensure that this process is adhered to.
- The Authority should conduct an inventory of all ranges and refrigerators, reconcile it to the current inventory list, and investigate any discrepancies.
Agency response & Auditor reply
Agency: "Per the recommendation of your office, an up to date inventory has been performed and recorded."
Auditor: "However, since these lists were prepared by the Authority and provided to OSA after we completed our audit fieldwork, we could not verify their accuracy."
Why it matters: The Authority may have spent more than necessary for these purchases.
Standard: Sections 2 and 4 of Chapter 30B of the Massachusetts General Laws ( Section 4(a) of Chapter 30B of the Massachusetts General Laws; Section 4(c) of Chapter 30B of the Massachusetts General Laws; Section 2 of Chapter 30B of the Massachusetts General Laws )
1 recommendation
- The Authority should update its formal written procurement policies and procedures, which require it to use competitive procurement, as far as possible, for goods and services, and should ensure that these policies and procedures are adhered to.agency: disagreed
Agency response & Auditor reply
Agency: "We respectfully disagree with this finding for a couple of reasons."
Auditor: "However, it did not provide any documentation of quotes for appliances and/or water heaters it may have obtained before January 2016 and therefore could not substantiate that it had used a competitive procurement process for all the refrigerators, ranges, and water heaters it purchased during our audit period."
Why it matters: Without regular documented inspections, there was inadequate assurance that units met safe and sanitary housing standards.
Standard: Chapter 3 of DHCD’s Property Maintenance Guide ( Chapter 3 of DHCD’s Property Maintenance Guide )
3 recommendations
- The Authority should establish policies and procedures for its unit inspection process.
- The Authority should establish monitoring controls over the inspection process to ensure that its staff consistently adheres to the policies and procedures.
- The Authority should retain copies of all inspection reports in its files.
Agency response & Auditor reply
Agency: "The WHA is trending in the right direction here."
Auditor: "However, we again recommend that it establish a policy that details the inspection process, the employee/s responsible for the inspections, and the management oversight of the process."
Why it matters: This created a risk of overcharging or undercharging tenants or housing ineligible tenants.
Standard: Sections 6.04, 6.05, and 6.06 of Title 760 of the Code of Massachusetts Regulations ( 760 CMR 6.04; 760 CMR 6.06(5)(q); 760 CMR 6.05(4) )
1 recommendation
- The Authority should develop and implement policies and procedures for its rent redetermination process that are consistent with Department of Housing and Community Development regulations and should implement monitoring controls to ensure that its staff consistently adheres to these requirements.
Agency response & Auditor reply
Agency: "The $400 family credit to the elderly residents was given out in error and those adjustments have been made."
Auditor: "However, we again recommend that the Authority establish a policy to ensure that all rent redeterminations are completed annually."
Why it matters: Tenants could be incorrectly offered housing ahead of other eligible tenants.
Standard: Sections 5.05, 5.10, 5.12, and 5.16 of Title 760 of the Code of Massachusetts Regulations, and DHCD’s Standard Application for State-Aided Public Housing ( 760 CMR 5.16(2); 760 CMR 5.05(2); DHCD’s Standard Application for State-Aided Public Housing; 760 CMR 5.12(2); 760 CMR 5.10(4)(a) )
4 recommendations
- Until it obtains a waiver from DHCD, the Authority should maintain hardcopy program waiting list ledgers.
- The Authority should ensure that housing applications are date- and time-stamped; that they include emergency applications when applicable, as well as control numbers and landlord references; and that written offers for housing are accepted within the prescribed timeframe.
- The Authority should establish policies, procedures, and monitoring controls over the application process to ensure that all information required during the process is obtained according to DHCD requirements.
- The Authority should assign an employee the responsibility of accepting applications and ensuring that each application complies with DHCD regulations.
Agency response & Auditor reply
Agency: "The Wellesley Housing Authority maintains a hand written master ledger. . . ."
Auditor: "The Authority maintains a handwritten master ledger, but DHCD requires that program waiting lists be kept in handwritten ledgers unless DHCD grants a waiver and allows for an electronic waiting list."
Why it matters: Without DHCD approval, the Authority could not be sure that the contract terms were acceptable or that services would support satisfactory operations.
Standard: The Wellesley Housing Authority’s contract for financial assistance with DHCD ( Wellesley Housing Authority contract for financial assistance with DHCD )
1 recommendation
- Before awarding or entering into a management agreement, the Authority should submit it to DHCD for review and approval.
Agency response & Auditor reply
Agency: "The Wellesley Housing Authority has been overseen by the Needham Housing Authority since 2004."
Auditor: "The Authority should send its management agreement to DHCD for review each time it is to be renewed to ensure that DHCD is aware of the duties and responsibilities of the parties outlined in the agreement."
More audits of this entity
Other Office of the State Auditor reports on Wellesley Housing Authority .
- Wellesley Housing AuthorityHousing Authority · July 30, 2014