The Commonwealth of Massachusetts

AUDITOR OF THE COMMONWEALTH

ONE ASHBURTON PLACE, ROOM 1819BOSTON, MASSACHUSETTS 02108

A. JOSEPH DeNUCCI

AUDITOR

TEL. (617) 727-6200

NO. 2009-0626-3A INDEPENDENT STATE AUDITOR’S REPORT ONCERTAIN ACTIVITIES OF THECAMBRIDGE HOUSING AUTHORITY JULY 1, 2005 TO SEPTEMBER 30, 2008

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2009-0626-3A TABLE OF CONTENTS/EXECUTIVE SUMMARY

TABLE OF CONTENTS/EXECUTIVE SUMMARY

INTRODUCTION 1

In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, the Officeof the State Auditor has conducted an audit of certain activities of the Cambridge Housing Authority for the period July 1, 2005 to September 30, 2008. The objectives of our audit were to assess the adequacy of the Authority’s management control system for measuring,reporting, and monitoring the effectiveness of its programs, and to evaluate its compliance with laws, rules, and regulations applicable to each program. We also conducted a follow-upreview of the Authority’s progress in addressing the issues noted in our prior audit report(No. 2006-0626-3A).Based on our review, we have concluded that, except for the issues addressed in the AuditResults section of this report, during the 39-month period ended September 30, 2008, the Authority maintained adequate management controls and complied with applicable laws,rules, and regulations for the areas tested.

AUDIT RESULTS 31. PRIOR AUDIT RESULTS RESOLVED 3

Our prior audit of the Authority, which covered the period July 1, 2003 to June 30, 2005,disclosed that (a) various instances of noncompliance with the State Sanitary Code existed atthe Authority’s state-aided housing developments, (b) the Authority did not conduct annualdwelling unit inspections as required by the Department of Housing and Community Development’s (DHCD) Property Maintenance Guide, (c) six uninhabitable units were inneed of renovation, (d) the Authority did not receive funding from DHCD for itsmodernization needs, and (e) DHCD did not provide the Authority with operating subsidy payments in a timely manner. Our follow-up review disclosed that the Authority has takenaction to remedy these issues, as discussed below.

a. Compliance with State Sanitary Code 3

DHCD’s Property Maintenance Guide, Chapter 3(F), requires that inspections of dwelling units be conducted annually and upon each vacancy to ensure that every dwelling unit conforms to minimum standards for safe, decent, and sanitary housing asset forth in Chapter II of the State Sanitary Code. Our prior audit noted 78 instances of noncompliance with the State Sanitary Code, including peeling paint, ceiling holes, wallsin disrepair, crumbling cement stairs, rotting porches, and roofs in need of major repair.Our follow-up review determined that the Authority has taken corrective action toaddress 75 (96%) of the 78 prior instances of noncompliance and is planning to addressthe remaining issues in the near future.

2009-0626-3A TABLE OF CONTENTS/EXECUTIVE SUMMARY

b. Unit Inspections Conducted Annually 3

Our prior audit noted that the Authority had not conducted annual dwelling unitinspections as required by the DHCD’s Property Maintenance Guide. Our follow-upreview determined that the Authority is now conducting annual inspections of alldwelling units.

c. Renovation of Uninhabitable Units 3

Our prior audit found that the Authority had taken six units off line that weredetermined to be uninhabitable due to severe exterior water and structural damage. Fiveof these units are located at the Jefferson Park Towers family development and one islocated at the Manning Apartments elderly development. Our follow-up review disclosed that the six units have been renovated and reoccupied.

d. Modernization Initiatives 4

Our prior audit found that although the Authority had applied to DHCD for funding for14 capital modernization projects for its state-aided properties, the requests were notfunded by DHCD during the audit period. As of February 28, 2007, six requests hadbeen funded and project work was completed, and the Authority was working withDHCD to obtain funding for the remaining eight projects. Our follow-up review determined that the Authority has received approvals from DHCD for modernization work to address the remaining eight requests.

e. Operating Subsidies 5

Our prior audit noted that DHCD did not provide the Authority with operating subsidy payments in a timely manner. Specifically, as of June 30, 2005, the Authority was dueoperating subsidy payments of $667,143 that it did not receive until several months later.Our follow-up review disclosed that DHCD is currently providing the Authority withoperating subsidy payments in a timely manner.

2. PRIOR AUDIT RESULTS UNRESOLVED 5

Our prior audit also noted deficiencies in the areas of (a) occupancy of vacant units, and(b) availability of land to build affordable housing units. Our follow-up review revealedthat these prior issues have not been adequately resolved, as discussed below.

a. Occupancy of Vacant Units 6

DHCD’s Property Maintenance Guide indicates that housing authorities should reoccupy units within 21 working days of their being vacated by a tenant. However, our prioraudit found that the Authority’s average turnaround time for reoccupying vacant units was 48 days. Our follow-up review disclosed that the Authority’s average turnaroundtime for reoccupying vacant units had increased to 58 days. In its response, the Authority indicated that its turnaround time has since been reduced to 37 days.