Hawaii’s more than 6,000 public housing units have been so poorly mismanaged that federal funding has been put at risk, State Auditor Marion Higa said in an audit released Friday.

Higa called the state’s management over the last three years “erratic.” That inconsistency has led in part to a backlog of repair and maintenance projects and years-long waiting lists for units. There are more than 9,000 people on the waiting list.

“The authority lacked staff with the resources and time to sufficiently monitor project managers’ performance,” according to the 54-page management audit of the Hawaii Public Housing Authority. “Oversight for rent collection, federal reporting, and issues affecting tenants’ daily lives — such as building conditions, property upkeep, and timely addressing of repair and maintenance problems — was erratic.”

The authority, a division of the state Department of Human Services, handles 5,331 public housing units in 67 federally-funded buildings and 864 units in 14 state-funded buildings.

“Both state and privately run housing projects reported backlogs in repair and maintenance,” the audit said. “Turnaround on vacant units was slow, adversely impacting families on the waiting list as well as rent collections.”

One stark example of decrepit conditions at Hawaii’s public housing projects is hot water at Mayor Wright. Residents there have complained that many units haven’t had a regular supply of hot water for at least the past six years. (Gov. Neil Abercrombie made good on his promise to have the state restore hot water at Mayor Wright.)

Poor living conditions at Kuhio Park Terrace prompted residents to file two class action lawsuits that have resulted in settlements.

‘Economic Reality’ Partly To Blame

In a response to Higa, the authority’s executive director, Denise Wise, said the findings “are very compatible with my ‘to do’ list prepared soon after my appointment.” Wise was named to the position 14 months ago.

“Economic reality precluded the successful resolution of many of the issues,” Wise wrote. “It is my belief that HPHA is taking positive steps in the right direction … We remain committed to building an efficient and effective system to deliver housing services as a high performing agency.”

The audit was in response to a 2009 legislative request asking the auditor to compare state and privately operated public housing projects by looking at the Puuwai Momi (Aiea) and West Oahu facilities. Lawmakers also formally requested a management and financial audit of the authority’s maintenance contracts, as well as investigate reports of disrepair, noncompliance with the federal Americans With Disabilities Act, and other concerns of residents.

“We found there was no significant difference in either the performance or management of the Puuwai Momi versus West Oahu housing projects or any of the other state-run versus privately-run housing projects that we reviewed,” the audit said. “Instead, our greater concern was with how the authority monitors all of its public housing projects and its lack of progress in implementing the federally required asset management model of operation.”

Highlights and Recommendations

Some highlights from the audit:

  • As of Feb. 15, 2011, the authority had a total of 233 vacant units that either had pending maintenance work or were available for rent
  • The authority has approximately 9,000 families on the waiting list and an average wait time of two to five years
  • The authority gets most of its funding — 75 percent to 83 percent annually — through grants from the U.S. Department of Housing and Urban Development (HUD)
  • The authority has seen its funding from the state’s general fund drop from $10.2 million in fiscal 2008 to $4.4 million in fiscal 2010 and 2011.

The audit concluded: “The (Hawaii Public Housing Authority) must improve its monitoring of project managers to ensure tenants’ needs are addressed and the state’s assets are protected for future users. It must also implement the federally-mandated asset management system model of operation. Any further delays in implementation may put federal funds at risk.”

Some basic recommendations (on pages 45 and 46 of the audit) include:

  • Prioritize repair and maintenance work orders and turning over vacant units to new tenants balanced against achieving much-needed capital improvement
  • Priorities should be communicated to stakeholders to promote the understanding of the authority’s plans to reduce its 9,000-plus wait list
  • Develop a method to share best practices among its public housing projects
  • Seek the Legislature’s approval as needed to update and streamline accounting system
  • Have the HPHA’s board of directors to create policies and procedures specific to board operations, including required training to orient new members

Read the full audit.

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