Audit: Housing authority paid for substandard housing

Sept. 06--The Lackawanna County Housing Authority allowed low- to moderate-income residents to live in dozens of substandard apartments and homes that the authority never properly inspected, a federal investigative agency has found.

Because of the substandard conditions, the authority wrongly paid more than $17,000 in rent to their owners over a two-month period last year, an audit by the Department of Housing and Urban Development's inspector general's office found.

The audit is the second by the office this year to find problems at the housing authority.

Earlier this year, the office said the housing authority violated its financial agreement with HUD by hiring the son of a board member, Dunmore Mayor Patrick W. Loughney, as a maintenance worker. Mr. Loughney resigned from the board last November after the office found out about the hiring, which was a violation of federal conflict-of-interest rules.

The earlier audit also found the authority mishandled more than $370,000 of its own money, allowed employees to drive its vehicles to and from work and for personal use, in violation of its insurance policy and failed to screen contractors barred from doing business with HUD-funded programs.

Repeated efforts to reach authority executive director James Dartt were unsuccessful. In a June 18 letter to HUD, Mr. Dartt said the agency has improved inspections and made sure landlords corrected all the violations.

"Working with the Office of Inspector General during this audit has helped this Authority become knowledgeable, efficient and better suited to meet the needs of our residents," Mr. Dartt said.

In his letter to HUD, Mr. Dartt said the authority hired a new inspector, had three new staff members certified in assessing housing quality and "implemented an intense Quality Control Program in accordance with HUD guidance."

"All ... sited (sic) inspections have been corrected by the landlords and passed HQS (housing quality standards)," he wrote.

Authority board chairman Paul J. Walker said the inspector who failed to conduct proper inspections was never properly trained in how to conduct them and was reassigned to another job. The authority hired and trained a new inspector and a coordinator who will check inspection are done right.

"We're in good shape," Mr. Walker promised.

Ninety percent, or 72, of the 80 apartments that a federal inspector checked last summer and fall did not meet HUD housing quality standards, the audit found.

Almost half (35) of the 72 "materially failed" to meet the standards," the office found.

The audit uncovered 801 violations of housing standards, including 284 "that needed to be corrected within 24 hours because the violations posed a serious threat to the safety of the tenants," according to the audit.

Given the sample size, if the problems went undiscovered, HUD might pay more than $1 million to subsidize substandard housing at the authority, the inspector general's office stated, or almost a third of the its housing subsidy.

The apartments and homes fall under the authority's Section 8 housing voucher program, which helps people whose household incomes are generally less than half the median income for the county or metropolitan area where a family lives. Private citizens own the apartments and homes, which are separate from a housing authority's projects. Generally, residents pay about 30 percent of their income in rent with the vouchers covering the rest.

HUD requires inspections when someone moves into Section 8 housing and once a year after that.

The county housing authority was eligible for 886 Section 8 vouchers worth up to $3.25 million in 2013.

The inspector general's office said it conducted the audit "because we received an anonymous complaint alleging incompetent leadership and poor quality of life at the authority."

The inspector general's office randomly checked on 80 of the 121 that the housing authority inspected between Aug. 15, 2013, and Oct. 15, 2013. The federal inspector checked them between Nov. 12 and Dec. 4.

Almost half the housing units (35 of the 72) "were in material noncompliance with housing quality standards because they had 518 violations that predated the Authority's last inspection," according to the audit.

Two of the 72 had two violations noted on previous authority inspection reports, but the authority passed them anyway, even though the federal inspector found the same violation, the audit found.

Of the 518 violations, the authority inspector simply missed some violations, was unaware some deficiencies were violations, did not always write down violations on his report, communicated violations verbally to owners instead and did not always follow up to see 24-hour and 30-day violations were corrected.

"The inspector did not identify some violations during inspections, such as improperly sloped flue pipes, unsecured fuse boxes, a missing smoke detector and inoperable window locks. The inspector was not aware that some deficiencies, such as missing knockout plugs in junction boxes, improperly wired electrical outlets, deteriorated and broken concrete steps and walkways, and open sides on flights of stairs, were violations," the audit found. "The inspector did not fail the units on the inspection reports if he considered the violations minor, such as inoperable smoke alarms and missing outlet covers. The inspector stated that he did not have enough time to reinspect all units."

Some of this happened because the authority lacked a quality control program to check on its inspector, the inspector general stated.

Despite the deficiencies in inspections, the authority rated itself a top score of 10 when assessing the way it enforces housing standards on federal paperwork.

The authority should reimburse HUD for the $17,029 in payments to the landlords of the 35 deficient apartments and the $1,470 in administrative fees it received, a total of $18,499.

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