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THE SENATE |
S.C.R. NO. |
17 |
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TWENTY-THIRD LEGISLATURE, 2006 |
S.D. 1 |
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STATE OF HAWAII |
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RESOLUTION
REQUESTING THE AUDITOR TO CONDUCT A FINANCIAL AND MANAGEMENT AUDIT OF THE HOUSING AND COMMUNITY DEVELOPMENT CORPORATION OF HAWAII.
WHEREAS, the United States Department of Housing and Urban Development (HUD) provides federal grants to state public housing agencies as part of the Capital Fund Program authorized by Title I of the United States Housing Authority Act of 1937, as amended, 42 U.S.C. 1437 et seq.; and
WHEREAS, these federal grants are awarded to state public housing agencies for the development, financing, and modernization of public housing projects, vacancy reduction, and management improvements; and
WHEREAS, sections 201G-15 and 201G-15.5 and part II, chapter 201G, Hawaii Revised Statutes, charge the Housing and Community Development Corporation of Hawaii (HCDCH) with the responsibility:
(1) Of managing and investing federal grants to implement federal housing programs; and
(2) For administering state housing programs, including public housing; and
WHEREAS, effective July 1, 2006, the HCDCH will become the Hawaii Public Housing Administration pursuant to Act 196, Session Laws of Hawaii 2005; and
WHEREAS, an audit of the HCDCH by the State Auditor, Report No. 01-14, September 2001, found:
(1) Deficiencies in the financial accounting and internal control practices of the corporation;
(2) Untimely execution of some contracts resulting in the execution of a design consultant contract twenty-three months after the funds became available;
(3) Failure to implement internal control procedures to ensure the accuracy of the calculation of the final operating subsidy from the federal government and the reconciliation of the final calculation to the estimated operating subsidy; and
(4) An extremely large number of applicants on the waiting list for low-income housing and tenant rental assistance programs; and
WHEREAS, a Honolulu Star Bulletin article of December 12, 2005, stated that funding and maintenance issues hinder state housing, specifically noting that there are some seven hundred sixty empty public units, about half of which need major repairs; and
WHEREAS, a Honolulu Advertiser article of September 26, 2004, reported that the U.S. Department of Housing and Urban Development designated the HCDCH as "troubled" and threatened to begin withholding housing money or even take direct control if things did not improve substantially by September 1, 2005; and
WHEREAS, a complete financial and management audit of the HCDCH is warranted to update the Auditor's report and to report on the progress of the HCDCH in meeting HUD's recommendations for improvement, including findings and recommendations; now, therefore,
BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, the House of Representatives concurring, that commencing after January 31, 2007, the Auditor is requested to perform a financial and management audit of the Housing and Community Development Corporation of Hawaii (to be known as the Hawaii Public Housing Administration on July 1, 2006), including:
(1) An assessment whether HCDCH spends the funds available to it in an efficient and cost-effective manner to reduce the vacancy rate in federally funded public housing projects in a timely manner, including an assessment of HCDCH's financial condition, financial accounting and internal control practices, and implementation of its new information system;
(2) An assessment and accounting of any actual or potential shortfall in the Capital Fund Program due to cost overruns in the Kalihi Valley Housing Phase 2 renovation project; and
(3) An assessment of the condition of HCDCH's property, and the satisfaction of its residents; and
BE IT FURTHER RESOLVED that the Auditor is requested to submit a report of its findings and recommendations to the Legislature not later than twenty days prior to the convening of the Regular Session of 2008; and
BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, the Auditor, and the Executive Director and the Chairman of the Board of Directors of the Housing and Community Development Corporation of Hawaii.
Report Title:
Management Audit HCDCH