A final monitoring report for the LCO Housing Authority’s (LCOHS) Indian Housing Block Grant (IHBG) program was issued on March 15 by the Eastern Woodlands Office of Native American Programs (E/WONAP) regarding their on-site performance review conducted on August 28 through August 30, 2018.
The report stated there were no findings or concerns found in all areas that were reviewed.
The review was designed to evaluate LCOHA's performance in complying with its Indian Housing Plans (IHP), implementation of eligible activities in a timely manner, submission of accurate Annual Performance Reports (APR), and carrying out its programs in accordance with the requirements and primary objectives of the Native American Housing Assistance and Self-Determination Act (NAHASDA), the IHBG program regulations and other applicable laws and authorities.
The purpose of the review was to fulfill the U.S. Department of Housing and Urban Development's statutory obligation under Section 405 of (NAHASDA), to review the performance of an IHBG recipient's compliance with the requirements of NAHASDA.
Each monitoring area reviewed included Organization and Structure / Administration of Programs, Indian Housing Plan (IHP) and Annual Performance Report (APR) Compliance, Financial & Fiscal Management, Procurement and Contract Administration, Admissions & Occupancy, Maintenance & Inspections, Environmental Review, and Self-Monitoring, in which no findings or concerns were identified in any of the above monitoring areas.
The Lac Courte Oreilles Band of Lake Superior Chippewa Indians (LCO) secured a 2015 Indian Community Development Block Grant (ICDBG) Mold Grant providing $800,000 in HUD funding to assist with a mold remediation and rehabilitation project originally involving fifty-three (53) NAHASDA assisted low-income housing units.
During the early stages of the mold remediation project, it was discovered that virtually all the originally identified mold affected units were in need of far greater rehabilitation than initially thought to properly remediate the mold issues. It was found that most units required the complete removal and replacement of significant amounts of drywall and flooring, repairs were needed to improve drainage, and in some cases, foundations needed to repaired and reinforced. The majority of the units also received new metal roofs. 2015 ICDBG mold remediation project funding ran short fairly quickly, so additional IHBG monies were committed. Ultimately, LCOHA was only able to fully complete work on twenty-four (24) of the originally planned fifty-three (53) units using federal funds (it rehabilitated 24 additional units using nonfederal funds). The significant amount of work performed on the twenty-four (24) completed units effectively addressed these important health and safety issues. LCOHA should be commended for their decision to do thorough and complete repair work, instead of just addressing spot mold issues, re-affirming LCOHA's on-going commitment to improving the quality, average life expectancy and long-term livability of LCO's affordable housing stock.
NAHASDA statute and regulations establish the framework within which HUD evaluates a grant recipient's administrative capacity to manage the IHBG program. Administrative capacity measures a recipient's ability to effectively undertake the affordable housing activities in its IHP. E/WONAP considered the following elements of administrative capacity in its assessment: Organizational structure and related systems of internal control which minimize the potential for fraud, waste, and mismanagement; Policies, procedures, and certifications that meet the requirements of the NAHASDA statute and the regulations at 24 CFR Part 1000.
Some of the documents reviewed for this monitoring area included IHP’s for 2015 to 2018, audits for 2015 to 2017, organizational chart for LCOHA, and minutes of Housing Board meetings for 2015 through 2017, resolutions related to board stipends, travel and other board activities, financial reports, copies of personnel policies, procurement policies, and copies of the most recent self-monitoring assessments or internal audits of NAHASDA programs.
The following five (5) performance measures found at 24 CPR Section 1000.524 are typically used to evaluate a recipient's continued capacity to operate the IHBG program. The performance measures are: The recipient has complied with the required certifications in its IHP and all policies and the IHP have been made available to the public; Fiscal audits have been conducted on a timely basis and in accordance with the requirements of the Single Audit Act, as applicable. Any deficiencies identified in audit reports have been addressed within the prescribed time period; Accurate annual performance reports were submitted to HUD in accordance with 24 CFR Section 1000.514; The recipient has met the IHP planned activities in the one-year plan; The recipient has substantially complied with the requirements of 24 CFR part 1000 and all other applicable Federal statutes and regulations.
E/WONAP staff review confirmed that LCOHA had the IHPs, APRs and Audits available for review along with the required Tribal certifications for its last four IHPs; 2015, 2016, 2017 and 2018. Public availability was also posted for each of the APRs; 2015, 2016 and 2017. The IHPs and APRs have identified 340 Low Rent Units, 19 NAHASDA units and one (1) Mutual Help Unit. The number of units agree with the IHBG Formula Center's Current Assisted Stock.
The LCOHA's FY 2015 and FY 2016 audits have been conducted in a timely manner and in accordance with the Single Audit Act. Courtesy copies were submitted to the EWONAP office on time (both were submitted by September 30th and were posted to the Federal Audit Clearinghouse in a timely manner. The 2015 and 2016 LCOHA Audits had no findings.
Both the APRs and IHPs were submitted to HUD in accordance with 24 CFR Section 1000.514. Eligible Activities listed in the IHPs include: maintain LCOHA Current 1937 Act Housing; provide Housing Management Services; purchase Computer Hardware and Software, fleet, tool and equipment; engage in crime prevention and safety activities; assist veterans with access to housing benefits; operate and maintain community buildings; remediate mold; remediate meth-affected units; provide down payment assistance; and conduct planning and administration activities. The LCOHA has met the IHP planned activities in the one-year plan and accomplishments were reported in the APRs.
The following conclusions were reached as a result of the review:
E/WONAP reviewed the goals and objectives identified in the 2015, 2016 and 2017 IHPs and compared the information reported in the APRs. The review disclosed the LCOHA has carried out its affordable housing planned activities as identified in the IHPs in a timely manner, and the reported expenditures are appropriately documented in the financial statements.
Based on the review of the on-site documentation and interviews conducted with LCOHA's Executive Director and staff, it was evident LCOHA is providing their Annual Performance Reports to tribal citizens making it available to the public at both the LCOHA office and at LCO tribal office buildings. It was also evident that the housing staff, housing board and council members have a good understanding of NAHASDA, the IHBG program requirements and their job responsibilities.
Financial and Fiscal Management
The scope of the performance review for financial and fiscal management included funds drawn down, accounting records, internal controls, cash management, audits, and investments.
The Uniform Requirements, at 2 CFR Section 200.302(a), state that each non-federal entity must have a financial management system that is sufficient to permit the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.
IHBG recipients are required to submit to HUD the Federal Financial Report (SF 425) no later than thirty (30) days following the end of the quarter. Regarding financial audits, 2 CFR Sections 200.501 and 200.514, require that any non-Federal entity that expends $750,000 or more in Federal funds in a fiscal year must have an annual audit conducted which meets the Generally Accepted Government Auditing Standards ("GAGAS"). Also, 2 CFR Sections 200.507(c)(l) and 200.512(a)(l), state that the non-Federal entity must submit the audit to the Federal Audit Clearinghouse ("FAC") within thirty (30) calendar days after receipt of the auditor's report, or nine months after the end of the audit period. The audit should cover all IHBG grants that were open at any time during the audit period.
Documents reviewed in this monitoring area included LCOHA Financial Administration Policy, revised February 8, 2016; LCOHA Travel Policy, adopted February 19, 2011; LCOHA Chart of Accounts, July 19, 2018; LCOHA Trial Balance, July 19, 2018; LCOHA General Ledger; LCOHA Annual Performance Report (APR) 2015-2017; Line of Credit Control System (LOCCS) Grant Detail and Disbursement History Reports; Selected LOCCS Payment Vouchers and Documentation; LCOHA Audits 2015-2016; 2018 AMERIND Risk Invoice.
E/WONAP staff reviewed LCOHA bank reconciliations, trial balance, general ledgers and income statements. The Financial Manager utilizes accounting software MOM to reconcile financial records. LCOHA is currently in the process of seeking new accounting software due to efficiency issues with MOM being unable to be integrated with other software LCOHA uses like Housing Data System (HDS). The reported Uses of Funding from the 2018 APR submitted by LCOHA was reconciled with LCOHA financial statements. Upon review, LCOHA expenditures in the IHBG program areas generally matched Fiscal Year 2018 APR figures. The Financial Manager oversees the accounting process with staff to ensure accuracy of transactions.
LCOHA maintains files in the office. The reported Uses of Funding from the 2017 APR submitted by LCOHA was reconciled with LCOHA financial statements. Upon review, LCOHA expenditures in the IHBG program areas balanced reasonably with Fiscal Year 2017 APR.
Admission and Occupancy
EWONAP staff reviewed the LCOHA Admission and Occupancy Policy. The policy is comprehensive and included details on the review of application income, eligibility, assets, income verification, waiting lists, inspections, and periodic recertification. The review of the LCOHA policy did not reveal any violation(s) of the program and regulatory requirements set forth at Sections 102, 201, and 203 of NAHASDA and 24 CPR Section 1000.104(a).
The LCOHA's waiting list is well-organized and up to date. The waiting list includes information on bedroom number requested, date applied, applicant name and action taken. Tenants are selected based on areas applied, unit availability, date of application and number of bedrooms. All applicants applying for low rent assistance at the LCOHA must be an enrolled member of an Indian tribe, as evidenced by a Tribal enrollment card or proof thereof (documentation provided by the tribal enrollment office).
LCOHA has 343 low-rent 1937 Act rental housing units. EWONAP staff randomly sampled approximately 10 percent (or 35) of the low-rent tenant files and tested them for compliance with Sections 102, 201, and 203 of NAHASDA, 24 CPR Section 1000.104(a), and LCOHA's Admission and Occupancy Policy.
The 35 tenant files reviewed contained all of the required documentation and information, i.e., the original application, tribal membership verification, eligibility income verification, rent calculation work sheets, lease agreements, move-in documentation, annual recertification and annual inspections. EWONAP' s review of the 35 tenant files did not reveal any violations of the program and regulatory requirements. All tenants reviewed were income eligible.
Maintenance and Inspection
E/WONAP staff interviewed LCOHA's Maintenance and Inspections Department Manager, Mr. Ron Gokey. Our review revealed that the Maintenance and Inspections Department has a diverse staff of 14 dedicated maintenance men and women, and inspectors, who are all dedicated to the needs of their members. Having reviewed numerous similar organizations, our review revealed that LCOHA's Maintenance and Inspections Department is effective, efficient and has committed and dedicated leadership from top to bottom.