We audited the Housing Authority of the City of New Haven’s (Authority) Public Housing Capital Fund (Capital Fund) and American Reinvestment and Recovery Act of 2009 Capital Fund (Recovery Act Capital Fund) projects for compliance with environmental and labor law requirements. We initiated this assignment because a previous Office of Inspector General (OIG) audit of the Authority’s Recovery Act Capital Fund activities identified a significant risk of noncompliance with environmental and labor law requirements that could impact all of the Authority’s Capital Fund projects. Our objectives were to determine whether the Authority (1) funded Capital Fund projects for eligible activities in accordance with U.S. Department of Housing and Urban Development (HUD) requirements, (2) complied with environmental requirements for proper removal and disposal of asbestos waste for its Capital Fund and Recovery Act Capital Fund projects, and (3) complied with labor standards enforcement requirements.

The Authority funded Capital Fund projects for eligible activities in accordance with HUD requirements. However, it did not always comply with environmental law requirements. Specifically, the Authority did not ensure that its abatement contractors complied with contract requirements for the proper disposal of asbestos waste removed from its Federal housing projects in accordance with its contracts. We reviewed nine abatement contracts with the Authority and found that seven of the contractors could not support proper disposal of asbestos waste removed from the projects in accordance with contract requirements. This condition occurred because the Authority relied on its environmental monitoring contractor to ensure compliance with environmental requirements with no apparent follow-up or oversight of its contractor. As a result, the Authority could not support disposal costs associated with more than $2 million in abatement costs paid on these contracts.

-The Authority also did not always comply with labor standards enforcement requirements. Specifically, it did not

-Complete the required enforcement reports for at least seven contractors, in which at least six violations appeared to have been willful noncompliance;

-Ensure that all required information reported to HUD in its semiannual enforcement reports was complete and accurate;

-Always document that it performed a review of certified payrolls and followed up on payroll falsification indicators;

-Require contractors to sign a statement of future compliance when underpayment violations were identified;

-Establish an account to hold restitution collected for workers owed restitution but who were not found or for appeals by the contractor; or

-Ensure that its enforcement file system was complete.

This condition occurred in part because the Authority did not have written policies and procedures for labor standards compliance. Additionally, the Authority’s contract with a city agency (agency) responsible for identifying noncompliance of labor standards violations was too general and did not detail the Authority’s and agency’s responsibilities in the area of labor standards administration and enforcement. Lastly, the Authority did not adequately track noncompliance violations of its contractors and resolutions, including restitution amounts determined and collected. As a result, HUD did not have assurance that the Authority met its labor standards enforcement requirements. Additionally, there is a risk that the Authority may continue to use contractors that willfully violate labor standards requirements and continue to hire undocumented workers to work on federally funded projects, including Recovery Act-funded projects. Further, if the Authority does not provide complete and accurate enforcement reports to HUD, HUD cannot comply with its requirements to provide this information to the U.S. Department of Labor as required.

We recommend that the Program Center Coordinator of HUD’s Hartford Office of Public Housing ensure the Authority’s written policies and procedures comply with requirements for ensuring that hazardous waste is properly disposed of and accounted for. We also recommend that the Program Center Coordinator of HUD’s Hartford Office of Public Housing require the Authority to (1) ensure that its staff is trained in environmental monitoring requirements, (2) adequately monitor its environmental monitoring contractors to ensure that they meet the requirements of their contracts, and (3) support that asbestos waste removed from Federal projects was properly accounted for and disposed of or repay from non-Federal funds the disposal costs it cannot support from the more than $2 million in abatement costs for the projects reviewed.

We also recommend that the Program Center Coordinator of HUD’s Hartford Office of Public Housing ensure that (1) the Authority’s written policies and procedures comply with requirements and include reporting responsibilities and sufficient management controls and incorporate Davis-Bacon Act streamlining guidance and (2) Authority staff is trained in labor standards compliance. We further recommend that the Program Center Coordinator of HUD’s Hartford Office of Public Housing require the Authority to (1) revise its contract with the agency to ensure that it is more specific as to Authority and contractor responsibilities for labor standards administration and enforcement and (2) report cases in which willful intent is apparent and/or in which restitution for a single employer was $1,000 or more, including those reviewed, and make any needed corrections to its semiannual enforcement reports.