Fitchburg Housing Authority
February 12, 2015 · Read the full official report (PDF) ↗
Published February 12, 2015 Audit covers January 1, 2012 – December 31, 2013 Under Suzanne M. Bump · 2011–2023
source
“Below is a summary of our findings and recommendations, with links to each page listed.”
Read the plain-English breakdown
This is a state performance audit of the Fitchburg Housing Authority covering January 1, 2012 through December 31, 2013.
“In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, the Office of the State Auditor has conducted an audit of certain activities of the Fitchburg Housing Authority for the period January 1, 2012 through December 31, 2013.”
Auditors reviewed selected financial and management activities, including money handling, tenant eligibility, inspections, leasing, purchasing, and reporting rules.
“In this performance audit, we reviewed and assessed selected financial and management activities of the Authority, such as financial operations, tenant eligibility, procurement of goods and services, site inspections, contracting and leasing, cost allocation, and compliance with reporting requirements.”
People who needed public housing may have waited longer because many units were empty beyond the state guideline, and the authority may have missed a large amount of rent.
“As a result, the Authority may have lost as much as $458,599 in potential rental income, and eligible applicants in need of state-aided housing may not have been placed in housing on a timely basis.”
If you are a tenant, applicant, taxpayer, or local resident, the audit points to practical issues: housing units should be filled faster, apartments should be inspected yearly, public assets should be tracked, and tenant deposits or overpayments should be handled accurately.
“Without accurate records, the Authority may not be able to accurately return tenant pet deposits and the interest earned on each deposit.”
The authority had serious management and recordkeeping weaknesses during the audit period, but the report says Leominster Housing Authority later took over management and reported progress on occupancy, inspections, software, and tenant records.
“Because the Authority did not fully implement the plan, DHCD ultimately approved replacement of its managers with the Leominster Housing Authority.”
The report recommends that the authority fix its vacancy process, perform annual inspections, create proper inventory records, review possible tenant credits, and reconcile pet deposit accounts.
“The Authority should take the measures necessary to ensure that it fully complies with DHCD’s guidance for the turnaround of vacant units.”
The most significant finding was that 321 state-aided housing units were empty longer than the recommended 21 days, with an average vacancy of 176 days and a possible $458,599 in lost rent.
“During the audit period, the Authority had a total of 338 vacant units within its state-aided housing programs for elderly and family tenants, of which 321 units were vacant for longer than the 21 days specified in the Department of Housing and Community Development’s (DHCD’s) guidelines.”
DHCD means the state housing agency that set the rules and guidance the authority was expected to follow; accounts receivable means records showing money owed, including possible credits owed back to former tenants; pet deposits are tenant funds held separately and may need to be returned or treated as abandoned property if unclaimed.
“The Authority’s tenant accounts-receivable records showed $9,523 owed to former family tenants as of December 31, 2013.”
5 figure(s) pending source verification - not shown
What the Auditor checked
- Complied Were the Authority’s expenditures allowable and related to Authority operations?
- Did not comply Did the Authority properly collect revenue, including rent, and report its sources?
- Complied Did the Authority determine tenant eligibility, placement, and monthly rental charges in accordance with the Department of Housing and Community Development’s (DHCD’s) regulations?
- Did not comply Were the Authority’s site inspections adequate to ensure that housing units met safety and sanitation requirements?
- Did not comply Did the Authority have effective controls in place to safeguard its assets?
- Complied Did the Authority allocate shared costs under a plan that reflected an equitable distribution between state and federal programs?
- Complied Did the Authority comply with DHCD’s financial reporting and data collection requirements?
- Complied If any modernization money was awarded, was it spent in accordance with DHCD regulations?
What the Auditor found
Why it matters: The Authority may have lost rental income and eligible applicants may not have been housed promptly.
Standard: DHCD’s Property Maintenance Guide recommends a 21-working-day outside limit for turning around vacancies. ( Chapter 1 of DHCD’s Property Maintenance Guide )
1 recommendation
- The Authority should take the measures necessary to ensure that it fully complies with DHCD’s guidance for the turnaround of vacant units.
Agency response & Auditor reply
Agency: "The number one goal of the Leominster Housing Authority has been to deal with the number of vacant units at the [Fitchburg Housing Authority, or FHA]."
Why it matters: Safety or sanitary deficiencies in state-aided housing units may not have been corrected as needed.
Standard: Chapter 3(F) of DHCD’s Property Maintenance Guide requires annual dwelling-unit inspections. ( Chapter 3(F) of DHCD’s Property Maintenance Guide; Title II of the State Sanitary Code )
1 recommendation
- The Authority should ensure that it complies with DHCD’s guidance and that it schedules and conducts annual unit inspections.agency: already implemented
Agency response & Auditor reply
Agency: "The Leominster Housing Authority feels that at least some of the annual inspections were conducted during the two year audit period but due to the fact that the inspections cannot be found in the resident files, cannot prove this statement."
Why it matters: The lack of accurate inventory records increased the risk of undetected loss, theft, or misuse of assets.
Standard: Section 15(D) of DHCD’s Accounting Manual for State-Aided Housing Programs requires annual physical inventories and maintained inventory lists. ( Section 15(D) of DHCD’s Accounting Manual for State-Aided Housing Programs )
1 recommendation
- The Authority should prepare a current inventory list to establish a formal system for inventory control over furniture and equipment, including an annual physical inventory that is reconcilable to the equipment record.
Agency response & Auditor reply
Agency: "The FHA did maintain an inventory of appliances and equipment for all its developments."
Why it matters: Former tenants may not have received money owed to them, or the Authority’s records may be inaccurate.
Standard: Section 16(B)(2) of the DHCD Accounting Manual for State-Aided Housing Programs requires a system to properly record tenant accounts receivable and reconcile cash collections. ( Section 16(B)(2) of the DHCD Accounting Manual for State-Aided Housing Programs )
1 recommendation
- The Authority should perform a review of its tenant accounts-receivable records to verify or correct the amount ($9,523) reported as owed to former tenants as of December 31, 2013.
Agency response & Auditor reply
Agency: "It has become evident that the tenant record keeping was inadequate and the tenant balances were indeed questionable during the audit period."
Why it matters: The Authority may not be able to accurately return pet deposits and interest, and some abandoned property may not be submitted to the Commonwealth.
Standard: Chapter 186, Section 15B(3)(a), of the General Laws requires security deposits to be held in a separate, interest-bearing account and provides tenants the right to immediate return if requirements are not met. ( Chapter 186, Section 15B(3)(a), of the General Laws; Chapter 200A of the Massachusetts General Laws )
3 recommendations
- The Authority should perform a review of its pet deposit bank account and individual tenant records to prepare and maintain a complete and up-to-date list of all individual tenant pet deposit balances.
- The Authority should maintain the tenant pet deposit account list so as to reflect the accurate current balance for each tenant.
- The Authority should periodically reconcile the tenant pet deposit account list to the pet deposit bank balance.
Agency response & Auditor reply
Agency: "Upon the transfer of management to Leominster Housing Authority, the escrow record keeping was found to be inadequate and tenant escrow balances were questionable."