An audit of the Medford Housing Authority has raised doubts about how the agency selected contractors for more than $1.3 million worth of work and services performed at authority-run property, and calls into question whether the agency paid fair rates for millions more in rent to private landlords.
In the 31-page report, a regional auditor for the federal Department of Housing and Urban Development found that the agency paid contractors or vendors for the work that was not finalized in a signed contract. In other cases, the jobs were not put out for competitive bid, the audit said.
Of 26 transactions between the housing authority and vendors or contractors that the auditor examined, 21 contained at least one violation of HUD regulations. In 10 instances, the authority paid for work without a contract, the audit said, and kept inconsistent records of contracts it had already signed.
It also said that between October 2008 and September 2010 the agency failed to properly ensure it was paying reasonable rent rates to landlords of private subsidized housing, and that some living conditions were not up to federal standards before people were allowed to reenter the units. Both are violations of HUD policy, which requires a 9-point evaluation to determine reasonable rent, and stipulates that repairs to units be made before people move in.
“To say these issues need to be addressed is an understatement,” wrote Mayor Michael J. McGlynn, in an April 4 letter to Robert Covelle, the authority’s executive director. “The audit indicates an urgency to implement comprehensive changes at MHA to insure that, at a systemic level, all appropriate laws and regulations are followed.”
In all, the agency controls more than than 2,700units of housing, including authority-owned property and private subsidized space.
Reached by phone Friday, Covelle declined to comment on the audit, and referred questions to agency’s attorney, Jeffrey Driscoll, who also could not be reached. A complaint to federal authorities sparked the audit, although the audit did not disclose the details.
In a March 7 letter responding to the auditor’s findings, Covelle partially admitted to some of the alleged shortcomings in procurement procedures, but defended against others, saying the agency has necessary paperwork in hand for some of the disputed costs, and that the auditor failed to take into account the full circumstances of other contracts. Covelle said he would bring the agency up to standards.
Other procurement infractions included the awarding of contracts to noncompetitive proposals without proper justification, it said. In one instance, a builder was paid $342,549 for work that the auditor determined was awarded without sufficient competition or documentation of contracts. In another, the auditor did not find a contract to support payment to a supply company that provided 338electric stoves at a cost of $115,195.
In the case of the stoves, Covelle said the agency possesses documentation and supporting paperwork for the purchase from Peerless Premier Appliance, but said it could not find the contract. For the carpentry work, Covelle said that once he realized the cost of the general contractor, he employed an agency staffer to perform the same work to save money.
Covelle also told the auditor that because a handful of the disputed contractors were first employed by the agency before Covelle took the helm in June of 2009, he shouldn’t be penalized for their infractions, he said.
The audit also called into question whether the agency properly verified that about $7.8million in housing assistance paid between July 2010and September 2011to landlords of voucher apartments were properly priced. The agency will now have to justify its costs, or else repay them to the federal government, the audit said.
The Medford City Council is expected to take up discussion of the audit at its April 17meeting, but neither the council or the mayor have power over the housing authority, which is considered an independent entity. The mayor recommends appointees to a five-person housing commission, which in turn hires the executive director.