Federal officials have reviewed the Owens Valley Indian Housing Authority’s use of several federal grants, and have put the organization on notice.
The OVIHA has been given until Feb. 1 to correct several serious accounting discrepancies and program deficiencies or face having to return hundreds of thousands of dollars in grant funding to the U.S. Department of Housing and Urban Development.
The finding stems from an on-site review conducted this past April by HUD’s Southwest Office of Native American Programs. Officials specifically looked into the OVIHA’s Indian Housing Block Grant, American Recovery and Reinvestment Act of 2009 and Traditional Indian Housing Development programs – trying to match reported expenditures and projects to what exists on the ground.
What the SWONAP saw, according to two separate reports, did not match up.
In July, the SWONAP issued a draft monitoring report that described the “performance accomplishments and deficiencies” there were identified during the review. That report also included proposed “corrective actions” that the SWONAP said should be completed by Feb. 1.
“The scope of the review was to verify accomplishments reported by OVIHA in its Sept. 30, 2011 and 2012 annual performance reports,” a summary of the monitoring efforts states. “This review consisted of reviewing each program and its accomplishments by verifying actual expenditures and the inspection of actual (housing) units assisted.”
In the summary, the SWONAP said it identified five “findings” and four “concerns.” A finding is defined as a “deficiency in program performance that represents a violation of a statutory or regulatory requirement,” while a concern is defined as “a deficiency in program performance that does not constitute a violation of a statutory or regulatory requirement.”
In the report, the SWONAP said it was able to track the program expenditures back to a general ledger, but “there appears to be inconsistencies with the accomplishments.”
For example, both of the OVIHA’s reports from September 2011 and 2012 state that OVIHA has 51 housing units – 46 low-rent and five mutual help – that it provides assistance to in the form of “good management, maintenance and operation, including insurance.”
However, when the SWONAP conducted its inspection of the 46 low-rent units, it found that only four have been occupied. The report goes on to state that eight units need rehabilitation and 36 need to be replaced altogether.
According to SWONAP, the last time the units had been inspected was in 2008. At that time, the OVIHA reported that assistance was being provided to 36 rental units at the Camp Antelope subdivision. “However, only four of these units have been occupied by participants.”
Through the HUD program, the OVIHA received $393,244 in federal funding, based on its reports of operating a total of 51 units.
As a result, the SWONAP said “the OVIHA has received excessive and unaccounted Formula Current Assisted Stock funding through its Indian Housing Block Grant which may have to be returned to HUD.”
The OVIHA was advised to contact Indian Housing Block Grant Formula Customer Service and provide verification that it has done so by Feb. 1.
NON-EXISTENT MAINTENANCE BUILDING
In its second finding, the SWONAP reviewed an American Recovery and Reimbursement Act grant award in the amount of $180,238 for the construction of an administration office and maintenance warehouse.
“The SWONAP’s on-site observation determined that the administration office was constructed and in use; however, there is no evidence that the maintenance warehouse was constructed,” the report states. “Only a few materials were located in an area close to the office. OVIHA expended $144,190 for this activity from this grant; however other Indian Housing Block Grant grants were also used for this purpose …”
The SWONAP said the OVIHA is not compliant with “reasonable costs for the operation and maintenance of 1937 Housing Act units.”
“Based on the poor maintenance of the participant files and the eight inspected units, OVIHA is unable to justify the excessive annual costs to operate and maintain the 1937 Housing Act units,” the report states. “OVIHA staff and oversight are not questioning the reasonableness of expenditures when authorization is provided to avoid waste and abuse.”
The report goes on to state that the OVIHA is managing the program as if it has 51 units, “however, the on-site review revealed that OVIHA does not have 51 units; it actually manages 14 low-rent (10 at Lone Pine and four at Camp Antelope).”
According to the report, five mutual help units are past due for conveyance and 32 units at Camp Antelope are not occupied and have been scheduled for demolition for 15 years.
The SWONAP recommended that the OVIHA demonstrate that costs associated with operating the units are administered “in an ordinary, necessary and prudent manner.”
If the housing authority is unable to provide verification that the funds were used as approved in the Indian Housing Plan and reported to HUD, it may be required to reimburse the grant with non-federal funds, the report states.
‘Waste and Abuse’
The third finding the SWONAP reported was noncompliance with cost limitations for non-dwelling structures.
According to the SWONAP, the OVIHA spent $500,885 in grant funding on a 1,800-square-foot administrative office building and to purchase minimal materials to begin construction on a maintenance warehouse facility in Lone Pine.
Based on the amount spent, SWONAP said the administrative building cost about $285 per square foot. “The cost limitation for the Lone Pine area is $88.13 per square foot for a total 1,800-square-foot building,” the report states, adding that the average quality office building is estimated to cost a total of $158,634.
“SWONAP has concluded that there appears to be unreasonable costs associated with the housing administration building based on the size of the building,” the report states. “It appears that OVIHA may have exceeded the cost limitations for non-dwelling structures. In addition, the cost to construct the administration building, and the operation of the 10 Lone Pine units managed by OVIHA, appear to be unreasonable costs. The questionable costs are also noted in OVIHA’s management of a similar administration and maintenance office at Camp Antelope for four existing low-rent units.”
In conclusion, the SWONAP said that “OVIHA staff did not monitor costs to ensure that the amount expended on the project remained reasonable and necessary. Due to waste and abuse, OVIHA has not been able to fulfill the mission of Indian Housing Block Grant projects which is to provide affordable housing to eligible tribal members.”
The SWONAP said the Housing Authority should request a waiver for exceeding the cost limitations on the administrative building. If the waiver is denied, it said the OVIHA should reimburse the block grant with non-federal funds.
In its fourth finding in the report, the SWONAP said the OVIHA is not complying with its travel policy and HUD’s program requirements.
“Travel expense reports were not prepared and reconciled to receipts such as hotel receipts,” the report states.
The SWONAP recommended that the housing authority review its policy and provide training to staff on how to properly record and reconcile travel expenses.
In its fifth and final finding, the SWONAP said the OVIHA is not protecting and maintaining its low-rent units.
“Inspections are not being conducted annually as required by OVIHA policy,” the report states. “The appearance of the units indicate only minimal maintenance is being performed and no modernization activities are being performed.”
The SWONAP recommended that the OVIHA complete an inspection of all of its housing stock and determine if maintenance and/or modernizations are required.
In the report, the SWONAP outlined four concerns it identified during its review.
The first area of concern is in regards to the management of the Traditional Indian Housing Development Grant.
According to the SWONAP, the OVIHA received $5,856,661 in TIHD funds to demolish and rebuild 36 homes in Camp Antelope. Since the inception of the grant, the OVIHA has spent $2,937,653, but, as of the report, only one home had been rebuilt, and that project used insurance proceeds after a fire destroyed the house.
“Otherwise the expenses to the grant have been for a water system and community center improvements, along with planning costs,” the report states. “Of particular concern, but beyond the scope of this review, is $315,053 in salaries expended which OVIHA charged to the project prior to 2001, with no visible outputs … As of this report, no TIHD funds have been expended on the actual demolition and construction of housing in Camp Antelope.”
The second concern expressed by the SWONAP is that the OVIHA is not maintaining a waiting list or verifying annual income for low-rent housing applicants.
“If periodic verification of income is not performed, tenants could be paying more than 30 percent of their income on rent,” the report states. “Additionally, an accurate waiting list enables the grantee to place the next eligible participant in a home. Without this, there is no method to ensure that the participants are being treated fairly.”
The third concern published by SWONAP is in regards to OVIHA staff.
“There appears to be an excessive amount of maintenance staff for the number of units being maintained and operating,” the report states. “There are currently three maintenance persons for 14 low rent and two homeownership units, approximately five units per staff. Additionally, housing staff will not enter several of the units due to perceived ‘hostile’ issues, so a contracted company performs all maintenance on these units.”
The SWONAP recommended that the OVIHA review its staffing needs and “determine where to streamline payroll expenses.”
The fourth and final concern discussed in the SWONAP report states that the housing authority is not compliant with small purchase procedures.
“It appears that OVIHA did not conduct an appropriate analysis to determine the most economical approach for several small purchase procurements which may have resulted in a loss of discounts and group purchase savings,” the report states.
Numerous phone calls and emails to OVIHA Executive Director Robert Zucco seeking comment on HUD’s findings not returned as of press time Tuesday.