Final Monitoring Report is in: SCHA must provide records to HUD, training to board of commissioners

The San Carlos Apache Housing Authority received the final report from HUD’s SWONAP after an extensive and comprehensive investigation into allegations of mismanagement by the previous SCHA administration. Photo by David Abbott.

Editor’s note: Previous reports by the Silver Belt/Moccasin identified the San Carlos Apache Housing Authority as “SCAHA.” The acronym “SCHA” has been adopted to be consistent with the HUD Final Monitoring Report.

The San Carlos Apache Tribal leadership has a lot of work to do by June 30, according to the Final Monitoring Report issued by the U.S. Department of Housing and Urban Development (HUD) Southwest Office of Native American Programs (SWONAP) in March.

In the wake of SWONAP’s investigation into the workings of the San Carlos Apache Housing Authority (SCHA) in June 2018, Tribal administration has already paid back about $3 million to the U.S. Treasury. While the report does not specify how much more will have to be repaid, there is a lot of work to be done to clean up the agency whose mission is to provide and maintain housing for low-income Tribal members.

The office of Tribal Chairman Terry Rambler issued a press release response on March 25 acknowledging the release of the HUD report.

“The Tribe was pleased to learn that the SCHA successfully closed five findings that had previously been identified in HUD’s Sept. 24, 2018, Draft Monitoring Report,” the release states.

“The San Carlos Housing Authority remains committed to adhering to federal requirements regarding accountability in the administration of federal funds,” Acting SCHA Executive Director John Antonio, Jr. stated in the press release. “The Final Report has reinvigorated the organization to fulfill its mission to provide safe and affordable housing to the San Carlos Apache community, and we are prepared to implement corrective action required to resolve any findings identified in HUD’s Final Report.”

Antonio is still the agency’s acting director, although he has appointed SCHA Project Coordinator Charles Hill as Deputy Acting Executive Director to act as the point of contact with SWONAP and attorneys involved in the investigation.

The final report reduces the number of “findings” from 15 to 10. For instance, corrective actions for environmental review of housing projects were put in place and SWONAP accepted the action. Several other areas, though, require more extensive actions on SCHA’s part to come into compliance with regulations associated with Indian Housing Block Grant (IHBG) and Indian Community Development Block Grant (ICDBG) programs.

“Although SCHA has policies and procedures in place to ensure their operations are compliant with applicable program requirements, the operations do not adhere to these policies and procedures,” the HUD report states. “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.

“Based on the monitoring review, HUD has determined that SCHA is in substantial non-compliance with IHBG program and Federal Financial Management requirements,” the HUD report states.

Corrective action includes extensive organizational fixes, accounting protocols and cataloging of housing units and physical resources used to provide and maintain housing for Tribal members. The agency has until June 30 to respond with sufficient fixes for the remaining problems with its administration and financial reporting.

The investigation into SCHA was initiated in 2017, when 119 Tribal members filed a series of complaints with the board of commissioners and SWONAP regarding administration of the housing program. The investigation was hindered by a lack of financial records that “obscured the reporting of incomes and expenses of the housing programs,” according to the report.

“A common element of the complaints was an inequitable application of the policies and lack of transparency and public availability of policies,” the report states. “Some cited conflicts of interest in the selection of occupants by the BOC (SCHA board of commissioners).”

There were additional complaints surrounding homeowners being dropped off group insurance plans and not being reimbursed for overpayment of rents announced by SCHA per a Dec. 20, 2017 notice to tenants, “Notice of Change of Payments and Rents Policy.”

“SWONAP learned that on Aug. 21, 2017, 181 homes were removed from the master Amerind insurance policy effective Jan. 1, 2018 in accordance with an SCHA decision to convey the units. SWONAP found no evidence that the homebuyers were made aware of the decision and therefore they did not know the insurance coverage was expiring at the end of the year,” the report states. “SCHA was advised to immediately replace the insurance while proper conveyance preparation was conducted with the homebuyers.”

The complaint specifically cites a home that was burned down, and its insurance had been canceled without notice to the homeowner. SWONAP is requiring the housing authority to provide a plan for “addressing the burnt down unit and housing its occupant,” and ensuring all housing units are covered under the SCHA Amerind Insurance policy.

The housing authority responded to the first two findings with files from the affected programs and revisions to its Rental and Homeownership Policies and Procedures that includes protocols for documentation and tracking of participants and program expenditures.

But SWONAP determined accounting of the number of managed housing units was inconsistent with what was reported at the end of fiscal year 2018 — Sept. 30, 2018 — although it was apparently a coding error or happened because the homes were in the process of “conveyance” to the homeowners.

Part of the corrective action that must be taken includes revision of the Admissions Policy and Procedures “to address how conflicts of interest must be handled by the BOC and Management in the selection of Tribal members for housing placement or participation for all programs.”

Under the heading, “Operations Hindered by Dysfunctional Organizational Structure,” SWONAP addresses administration and oversight of the SCHA, citing “a lack of (BOC) code of conduct and bylaws,” and “Non-Compliance with Fair and Open Competition.”

A bylaws draft from 2015 was found but it was unfamiliar to BOC members who met with HUD officials.

Additionally, there was no tracking of participant complaints in place and after SWONAP completed its review, “copies of assorted complaints from the housing management offices at Bylas and Tufastone, but no subsequent action or response was documented,” leaving the report to conclude that “There was no evidence of the tracking of employee grievances. Personnel actions required by SCHA policies were inconsistently documented. The Human Resource records requested for sampled employees were incomplete or unavailable.”

An attempt to follow up on complaints from former SCHA employees about filed grievances for sexual harassment and wrongful termination were stymied by a similar lack of records or follow-up, although, “complaints to SWONAP about positions being created for family and friends of SCHA management were substantiated.”

In particular, the report cites the Housing Services Coordinator position, “created to benefit the individual who has close ties with both the Housing Services Manager and the Executive Director,” and Project Coordinator, “created without record of position description, advertisement, or interviews. The individual in this position is reportedly a close relative of the former Executive Director.”

To help remedy the situation, SWONAP will require all board members attend training, at no cost to SCHA, and create by-laws.

The cost of three years of non-compliance — the SWONAP investigation covered a period from 2016-2018 — has yet to be determined, but on Dec. 21, 2018, the Housing Authority returned $2,940,790.60 of a $7,683,304 investment fund.

SCHA was approved for the investment program in 2005, and in June 2015, the agency requested the funds in question, after drawing on them in May of that year. Records substantiating the status of the investment were not available to investigators, and SCHA could not prove that the interest earned was spent on housing. According to the HUD report, the funds were distributed to other SCHA accounts.

“The investment records were incomplete; some accounts lacked any documentation. This was reportedly due to the Executive Director, Ronald Boni, being the sole SCHA personnel authorized on some of the investment accounts. While the existence of various investment accounts was apparent, SCHA could not provide SWONAP with the records of transactions, current balances and interest earned,” the report states.

The agency must return all investment funds and interest earned after July 30, 2018 as well as documentation of all investment activity.

SCHA did return $2,164.11 as the amount of interest accrued in that time but failed to provide adequate documentation to verify it is correct.

Additional amounts will have to be repaid should SWONAP determine that other Housing Authority funds were spent improperly.

Systemic problems within SCHA came to light last September after HUD’s draft report was leaked to the public. The SWONAP investigations took place in June 2018, after receiving a complaint signed by 119 San Carlos Tribal members was submitted on May 4, 2017.

Investigators spent four days at SCHA last June, combing through available records, interviewing staff and inspecting housing.

The report found mismanagement of Tribal assets and included a variety of other allegations centered on Boni, including the use of unauthorized cell phones and credit cards issued to Tribal members not employed by SCHA.

Boni was placed on administrative leave on July 9, 2018 — subsequently released from his position on Oct. 10, 2018 — replaced by Tribal Councilmember John Antonio, Jr.

The housing authority’s leadership received the brunt of criticism, but investigators praised members of SCHA’s staff, which has been working under duress throughout the process.

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

The March 25 press release from Tribal administration said that 93 percent of Reservation households are considered low-income by federal housing standards; 38 percent of Tribal members live in substandard housing and 42 percent in overcrowded conditions.

“The number of substandard housing conditions has decreased by 3 percent in recent years, which is due in large part due to the work of the SCHA,” the press release states. “In the past year alone, the SCHA built 24 new homeownership homes for low-income families and has recently received funding to rehabilitate 30 low-rent units.”

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