HUD investigates San Carlos Housing Authority

A housing development in Gilson Wash reportedly does not have electricity or other necessary infrastructure. A recent investigation into the workings of the San Carlos Apache Housing Authority raised many questions about what has been happening at the agency for several years. Photo by Susanne Jerome.

The San Carlos Apache Housing Authority (SCAHA) may be on the hook to pay back millions of dollars to the U.S. government in the wake of a report issued in September by the U.S. Department of Housing and Urban Development (HUD) that alleges mismanagement and a variety of other allegations that came to light after an extensive investigation.

The review of SCAHA, which oversees construction, maintenance and distribution of low-income housing on the Reservation, identified 15 “findings” and three “concerns” surrounding operations, calling for immediate action to repair the agency that receives millions in federal funding each year.

“The observed state of housing stock maintained by SCAHA does not reflect the roughly $6 million annually, totaling over $130 million since 1998, for low-income San Carlos Apache Tribal members. Much of SCAHA’s managed housing stock is in deplorable, sometimes uninhabitable condition,” the report states. “The services are not satisfactorily provided to the community to include some for which tenants are charged, like garbage collection.”

‘Dysfunctional organization structure’

The program review took place in late-June this year by the Southwest Office of Native American Programs (SWONAP) to evaluate the housing authority’s adherence to its housing plan; implementation of housing-related activities; submission of accurate reports and administration of programs in accordance with federal requirements.

What it found was a lack of accurate record keeping and that SCAHA did not adhere to its own policies and procedures.

“The observed structure of the organization and management directives hinder or preclude proper function of internal controls, communication between interdependent departments, and transparent financial management,” the report states in a concern titled, “Operations Hindered by Dysfunctional Organization Structure.”

On July 9, the housing authority’s board of commissioners (BOC) notified SWONAP that SCAHA Executive Director Ronald Boni had been placed on administrative leave and was replaced by Tribal Councilmember John Antonio Jr. as acting executive director. Boni was subsequently released from his position on Oct. 10.

Throughout July and August, SWONAP called on the housing authority to secure its accounts and return more than $7 million in investment funds with interest, but SWONAP never received verification that action was taken by the housing authority.

An administrator from the housing authority was scheduled to meet with SWONAP officials on Aug. 8 for a follow-up inspection of housing. The administrator did not show up, but staff members assisted inspectors with their tasks.

“It should be noted that despite SWONAP’s communication and cooperation difficulties with SCAHA management, the majority of the SCAHA staff are knowledgeable, conscientious and dedicated to serving their community,” the report states.

However, management of the housing authority was not so highly praised. The biggest criticism was directed towards the housing authority organization and structure and its policies, bylaws and code of conduct.

Inadequate reporting, unanswered complaints

Time after time, the report cites SCAHA’s failure to provide complete or accurate reports or even baseline information about its functions or responses to complaints received from employees and the community.

Income verification for low-income housing was “inconsistently documented,” and a portion of housing was given to individuals in higher income brackets. HUD guidelines allow 10 percent of SCAHA housing to go to Tribal members with higher incomes. Despite a lack of documentation, SWONAP has determined it is likely that has been surpassed.

“Several complaints from San Carlos Tribal Members were received by SWONAP related to the administration of the housing programs,” the report states. “A common element of the complaints was an inequitable application of the policies and lack of transparency and public availability of policies. Some cited conflicts of interest in the selection of occupants by the BOC,” the report states.

A complaint signed by 119 San Carlos Tribal members submitted on May 4, 2017 alleged “administrative mismanagement of the SCAHA and unreasonable income requirements for the homebuyer program.”

There were other complaints about SCAHA’s lack of protocol for informing homebuyers of the status of their loans and the transfer of title once the house was paid off.

“There was no evidence of counseling the homebuyers on their obligations to assume ownership, particularly the need for homeowner’s insurance and their role in recording Tribal Land Trust lease assignment for the home site with the Bureau of Indian Affairs (BIA),” the report states.

In August 2017, 181 homes were removed from federally subsidized insurance, effective Jan. 1, 2018. Homebuyers were not informed of the decision, and one home burned down with no coverage in place.

“The investment of federal funds into the home was lost, the occupant displaced, and SCAHA is responsible for the cost of its replacement,” the report states.

Additionally, SWONAP found that there was no tracking of complaints either from the community or within the organization. Allegations of sexual harassment and wrongful termination of former employees went unanswered and there were also complaints that positions were created for friends and family members of SCAHA management.

The position of project coordinator was filled “without record of position description, advertisement, or interviews.” The individual hired was “reportedly close relative of the executive director,” according to the report.

SWONAP found that these complaints had credibility and were supported by existing records.

Procurement and contract administration was also questioned, as there were no supporting documents to show contractors and other service providers were hired in a “fair and open competition.”

SCAHA management required all purchases of maintenance and construction material from a Lowes store located in Gilbert, which led to “significant operational delays” in maintenance. This led to the SCAHA office in Peridot functioning without electrical power for several months in 2016-2017 and use gas generators, creating an unsafe work environment.

The problem was not remedied until a complaint was filed with the Occupational Safety and Health Administration (OSHA).

Lack of infrastructure on housing projects, no maintenance on existing units

“New construction projects were observed standing vacant due to lack of water and sewer infrastructure and rehabilitation projects were found to be incomplete, contrary to reporting,” the report states. “This lack of progress, along with the unavailability of financial and procurement records to substantiate the expenditures, reflects substantial non-compliance with program requirements and failure, by the Executive Director and the Board of Commissioners to fulfill their administrative requirements.”

SWONAP also found that three subdivisions, Peridot View; Indian Hills and Tulapai Flats, lacked environmental review that fell under the purview of Tribal Chairman Terry Rambler.

Maintenance of existing homes was found to be lacking, if not nonexistent. A review of work orders found that the last repairs scheduled for any SCAHA homes was in March, but no one was assigned to follow through and the work was never completed.

Additionally, “review of the work orders reflect regular use of maintenance staff hours and materials for funeral services which are not an eligible affordable housing activity.”

The report also identified serious problems with SCAHA managed housing stock, including “mold in kitchen cabinets, inoperable bathroom vent fans, non-working windows, leaking pipes, exposed electrical wires, damaged floors, eroded cabinets in bathroom and kitchen, etc. SCAHA’s tenants are living in unsafe and unsanitary units,” the report states.

Financial reporting and expenditures

SWONAP also reviewed documentation for “75 general financial transactions; 62 travel expense transactions; and 11 credit card transactions. The amounts were chosen based on high dollar amounts, high-risk categories, account names and expenditure descriptions.”

What it found was inconsistent coding and questions about expenditures from travel expenses, to cell phone use and the existence of unauthorized credit cards connected to U.S. government funds, although “unavailable or incomplete records were insufficient to fully conduct the review.”

“While onsite, it was determined that the SCAHA did not have control over all HUD related bank and retail accounts along with other assets in accordance with federal requirements and the approved policies,” the report states.

Corrective actions included the agency “immediately [ceasing] the use of the credit cards issued for anyone who is not an employee of SCAHA,” and providing “written verification to SWONAP that the credit card names have been cancelled.”

Loss control of physical assets

There were also issues with inventory and maintenance of records regarding property owned by SCAHA, leading to loss, damage or theft of property, or in some cases, even finding said property.

“SCAHA has not demonstrated that it can locate purchased property or ensure it is being used for the intended purpose,” the report states.

Multiple emails to Trial Chairman Terry Rambler for this report received no response.

Eduardo Cabrera, regional public affairs officer for HUD Region 9 responded via email that SCAHA has until Dec. 2 to respond to the draft report, but can request additional time.

“If they request it, they can get an additional 30 days, which would push the due date further to Jan. 2,” Cabrera wrote. “HUD will then have up to 30 days to issue a final report. That would most likely be around Feb. 1, 2019.”


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