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State audit of Northampton Housing Authority finds room for improvement in agency’s procurement practices

The review by state Auditor Suzanne M. Bump examined nearly $1 million in spending at the agency over two years. The procurement issues flagged involved $7,245 for pest control services, $11,109 for painting and $15,609 for carpet and flooring installation between July 2010 and June 2012.

In each case, the housing authority paid vendors for the services without seeking oral or written quotes from other vendors or written bids, which state law requires if the cost of the work exceeds a certain amount.

Apart from that spending, the audit states the housing authority “maintained adequate internal controls” and conducted its procurements “in an efficient manner in compliance with DHCD (Department of Housing and Community Development) guidelines and laws, rules and regulations applicable to state-aided housing programs.”

Jon Hite, executive director of the housing authority, said he appreciated the review and agreed with the state auditor’s findings.

“We can always do better, and I’m very happy with the results of the audit,” Hite said Wednesday. “They looked at almost $1 million in contracts over a two-year period and the three items they highlighted, we agreed with them immediately.”

In each case, the housing authority explained to state auditors the difficulty of forecasting costs for certain types of work. For example, the agency typically doesn’t spend more than $5,000 for pest control services annually, which is the threshold to seek three written or oral quotes for such work. The figure has since been bumped up to $10,000.

“We do our exterminating on an as-needed basis,” Hite said. “We exceeded the threshold in fiscal year 2012 and we probably shouldn’t have.”

Hite said work to eliminate bed bugs was a factor.

“The problem is that bed bug exterminating is more expensive than simple exterminating. You have to go back and back and back,” he said.

As for not using competitive procurement for painting, carpet and flooring work that totaled more than $10,000, the housing authority stated in its audit response that contracting for such work in vacant or soon-to-be vacant units poses “unique and difficult procurement challenges.”

The housing authority paid one painting contractor $11,109 in three separate payments over a two-month period for work performed at one location and a carpet installer a total of $15,609 for work in seven units at two locations over an eight-month period, according to the audit.

“We fear seeking prices for unknown conditions will lead contractors to provide price quotes based on potential worst-case scenarios, inflating the cost of the actual work, rather than on the actual conditions of a particular apartment,” the housing authority wrote.

The agency said it will study how best to award contracts in such situations.

The Northampton Housing Authority manages 508 federal and state-aided housing units in the city, including 377 senior and disabled adult units, 95 family units and 36 units for the mentally handicapped. It is overseen by a five-member board of commissioners, four appointed by the mayor and one by the governor.

Dan Crowley can be reached at dcrowley@gazettenet.com.

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