NORWAY – MaineHousing has severed its agreement with an independent contractor who inspected Section 8 housing in Oxford and Androscoggin counties.

The decision was announced by MaineHousing Director Dale McCormick following the release of a 17-page internal audit that showed serious flaws in the inspection process that led to the discovery of substandard Section 8 housing in Norway late last year. She said it was one of several “bold” moves the state agency will take to correct deficiencies in their Section 8 voucher program.

McCormick has also recommended that Section 8 contracts with all outside agents statewide be phased out to bring the entire program in-house. MaineHousing will administer the program immediately in Oxford and Androscoggin counties.

The Section 8 Housing Choice Voucher Program was being administered by MaineHousing with its agent, Avesta Housing, a Portland-based company,  in both Oxford and Androscoggin counties.

The move was made after the Sun Media company’s weekly newspaper The Advertiser-Democrat exposed substandard living conditions in Section 8 properties owned and operated by three landlords in Norway.

“To read in the Advertiser Democrat article about the deplorable substandard conditions in which people were living was unacceptable,” McCormick said in a statement. “It was clear to me that there was a failure in our system of quality control in the administration of the voucher program in Norway that allowed for these conditions to pass inspection. We are undertaking the bold changes that are required to address this problem, and will follow through on the recommendations outlined in the report.”

MaineHousing spokeswoman Deborah Turcotte said Monday that unlike Oxford County, where health and life safety problems were discovered, there were no “major or unusual problems” reported during inspections in Androscoggin County Section 8 housing units.

“MaineHousing is working to bring all Section 8 inspections in house, as we did for five counties a couple of years ago. That has proven to be successful,” she said.

In the report, Avesta officials said it “deeply regrets” the incident in Norway. Officials at the agency said they support MaineHousing’s decision to take over the administration of the voucher system statewide.

In addition to removing Avesta from the inspection process, McCormick said other changes will be implemented, including procedural changes for inspections, increasing the number of inspections to a level greater than required by the U.S. Department of Housing and Urban Development, conducting quarterly housing inspector meetings to discuss laws, issues, and concerns and requiring housing inspectors to log complaints that will be reviewed monthly by MaineHousing.

McCormick asked MaineHousing’s internal auditor to investigate the Norway problem. The investigation included how controls broke down both at MaineHousing and Avesta that allowed the situation to occur and why MaineHousing or Avesta were not aware of the situation sooner.

According to the internal audit, the substandard housing situation in Norway was caused by conditions that were ignored by a trusted Section 8 housing inspector employed by Avesta and a breakdown in controls enabled the problem to exist over time without exposure.

“In hindsight, indicators along the way were overlooked. Due to a number of factors, no one was connecting the dots… at Avesta or at MaineHousing,” the auditor wrote in the report.

The internal auditor interviewed Avesta management and staff, MaineHousing management and staff and local officials and found that “without exception, everyone involved stated that they were ‘shocked’ by the living conditions.”

“It appears that the “root cause of the situation in Norway – landlords who did not maintain their properties up to (housing quality standards) – was ignored by a trusted Section 8 housing inspector employed by Avesta,” according to the auditor’s report.

According to the audit, MaineHousing and Avesta management were unaware of the substandard living conditions at the properties because they were not notified by the Avesta housing inspector, town officials or tenants. The tenants may have told the inspector about the conditions, but were unaware that they could contact MaineHousing or Avesta directly.

The auditor said MaineHousing should have taken a step back to look for a pattern in inspection reports that possibly could have identified a lack of oversight that could lead to substandard living conditions.

According to the report, the Section 8 housing inspector became “weary and apathetic” after years of working alone in the field. Further, the inspector reported that she felt she was “helping “ tenants and landlords by overlooking items that should have failed.

The Section 8 housing inspector opposed recent management changes at Avesta and resented the new rules put in place by her current supervisor. The inspector also passed previously failed items without going back to re-inspect the unit, according to the report.

“Avesta relied almost exclusively on MaineHousing to provide direction and oversight of Avesta staff, particularly with regards to the Section 8 Housing Inspector but the performance of the Section 8 Housing Inspector was not adequately monitored ,” the auditor said in his report.

The auditor said that other factors that resulted in the problem included, not following through when a problem was found, the fact that refresher training or recertification is not required by HUD, and lack of a formal method of tracking tenant or landlord complaints. Further, town officials did not contact MaineHousing directly and tenants did not feel empowered to complain.

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