Local Septic Systems Repair Grants

This is a state audit of a Massachusetts program that helped towns fund septic system repairs for homeowners, especially low- and moderate-income homeowners.

“As authorized by Chapter 11, Section 12, of the Massachusetts General Laws, the Office of the State Auditor conducted an audit of the Community Septic Management Program’s distribution of grants and loans to local communities for the repair of septic systems to meet the requirements of Title V, and the local communities’ management and disbursement of these funds to eligible low- and moderate-income homeowners.”

Auditors checked whether seven southeastern Massachusetts communities followed the program rules, financial requirements, and applicable laws when handling septic repair money.

“Our examination concentrated on seven communities located in the southeastern region of the Commonwealth selected at random.”

The program was meant to help homeowners repair failed septic systems, but poor controls can mean public money is not tracked properly or reused for more residents who need help.

“Because these two towns did not establish and maintain separate bank accounts for all transactions relating to the Local Septic System Repair Program grants, the towns cannot be assured that these funds, including repayments, interest, and penalties, have not been commingled with other town funds, and are not available for the issuance of additional septic loans or betterments to homeowners in the community.”

If you live in a town using this kind of program, the audit affects whether aid is fairly awarded, whether repayments are handled correctly, and whether more homeowners can get help later.

“Eligible homeowners with low or moderate income had first priority in their municipality for loans or betterments.”

The audit found repeated problems: some towns did not seek competitive bids, did not bill on time, did not keep separate bank accounts, did not reconcile accounts, or gave money to homeowners over the income limit without proper approval.

“Our review of seven communities that participated in the Septic System Repair Program revealed that four of the towns did not seek competitive bids on 10 construction projects estimated by the awarding authority to cost more than $10,000.”

The auditor recommended that towns fix their procedures, use separate accounts, collect repayments, reconcile funds, follow bidding rules, and give priority to eligible low- and moderate-income homeowners.

“Recommendation: The local communities who have the primary accountability for compliance with program regulations should seek competitive bids for contracts estimated to cost more than $10,000 and follow proper procedures for declaring emergencies.”

The audit is significant because the program involved millions of dollars across many communities, and weak local handling could reduce fairness and limit future assistance.

“Under the provisions of this program, approximately $6,800,000 was awarded to 96 communities.”

A “betterment” is a way for a town to pay for an improvement and then charge the homeowner back, often through the property tax bill.

“Betterments were added to property tax bills, and the town held first position for repayment priority if property was sold or otherwise disposed of.”