Objective

To assess the extent of implementation of the six recommendations included in our initial audit report, Collection of Fines Related to Tenant Complaints (Report 2018-S-58).

About the Program

Homes and Community Renewal consists of the State’s major housing and community renewal agencies, including the Division of Housing and Community Renewal (DHCR). DHCR is responsible for the supervision, maintenance, and development of affordable low- and moderate-income housing in the State. Within DHCR, the Office of Rent Administration (ORA) administers the State’s rent laws and regulations related to both owners and tenants. As the administrator of the laws and custodian of all rent registration records, ORA responds to owner and tenant applications, inquiries, and complaints regarding the nearly 1 million regulated apartments in New York State.

Our audit focused on harassment and non-compliance complaints, which are handled by ORA’s Enforcement Unit, defined as follows:

• Harassment is a course of conduct intended to force a tenant out of their apartment. This includes interfering with a tenant’s privacy, comfort, or quiet enjoyment of the premises by reducing services or engaging in baseless court proceedings.
• Non-compliance is when an owner fails to comply with an order by not taking corrective action to resolve a previous case.

For non-compliance complaints, owners are given an opportunity to avoid a hearing and greater penalties by correcting the condition within 60 days and paying settlements of $100 or $250. The $100 and $250 are settlement offers for non-compliance cases only and are not available for harassment cases. Harassment cases are scheduled for mediation conferences for resolution after the harassment complaint is docketed. Non-compliance and harassment cases that cannot be resolved by settlement, mediation, or conference are heard before an Administrative Law Judge. Depending on how they are resolved, harassment and non-compliance cases may result in financial settlements or substantial fines and penalties against the owner. If owners are found to be in violation, they could face fines of at least $1,000 for each first non-compliance offense and at least $2,000 for each first harassment offense.

The objective of our initial audit, issued in December 2019, was to determine whether ORA was appropriately accounting for and collecting fines (civil penalties) for non-compliance and harassment cases. The audit focused on complaints that were filed or had outstanding fines between January 1, 2016 and September 30, 2018. Specifically, the audit found that ORA lacked proper fiscal controls over fines and settlements. We also had limited assurance that all monies due to the State were received and accounted for because of system, process, and policy weaknesses. Furthermore, the audit found ORA did not exercise its full authority to collect outstanding fines in a timely manner.

Key Findings

ORA has made progress in addressing the problems we identified in the initial report. Of the initial report’s six recommendations, three were implemented, one was partially implemented, and two were not implemented.

Key Recommendation

Officials are given 30 days after the issuance of this report to provide information on any actions that are planned to address the unresolved issues discussed in this follow-up.