Overview
Our audit identified weaknesses in the oversight and monitoring of the Massachusetts 3% Priority Program, in which MassHousing has voluntarily chosen to participate alongside several other government agencies.
Specifically, we found the following:
- The memorandum of understanding (MOU) regarding the units in the program between MassHousing and the Executive Office of Health and Human Services (EOHHS) agencies does not formally designate an entity that is responsible for enforcing program compliance. Under this MOU, MassHousing agreed to serve as the point of contact between management companies and the EOHHS agencies until March 1, 2023. Although MassHousing continues to serve in this capacity informally, no official entity has been assigned to enforce compliance. This lack of formal assignment may result in unclear accountability among participating agencies and stakeholders.
- The MOU also required that, “on or before September 1, 2022, the Parties shall evaluate the system to determine if there are more efficient or effective ways of administering the 3% Priority [Program].” As part of this evaluation, the participating agencies were to assess the costs of administering the program, and, after that assessment, the agencies that were involved in the MOU would jointly determine how to allocate these costs. However, we found that this evaluation and cost allocation process never took place.
- There is no real-time, accurate inventory of available 3% Priority Program units accessible to participating agencies. This lack of up-to-date information may limit effective coordination and timely referrals within the program.
- Affordability and occupancy requirements for 3% Priority Program units are reviewed only once annually during MassHousing’s asset management reviews (AMRs). There is no interim or targeted monitoring to verify ongoing compliance, limiting the ability to promptly identify and address potential violations. While these reviews touch on affordability and occupancy requirements, they are not conducted specifically for the 3% Priority Program.
Given its role as the designated facilitator of communication from September 1, 2020 through March 1, 2023, we would have expected MassHousing to proactively lead the evaluation of the program’s administrative effectiveness and, if warranted, facilitate the development of a successor agreement. We recommend that MassHousing coordinate and collaborate closely with the agencies included in the MOU to implement the following measures:
- All agencies included in the MOU should assign clear responsibility to a specific agency or establish oversight mechanisms to enforce program compliance, coordinate referrals, and ensure accountability among all parties.
- All agencies included in the MOU should evaluate the program administration, including cost analysis, as stipulated in the MOU, and use the findings to improve operational efficiency and establish transparent cost-sharing arrangements.
- All agencies included in the MOU should implement a centralized, real-time unit inventory system by developing or enhancing a shared database that is accessible to all participating agencies to track available 3% Priority Program units, enabling timely referrals and better program management.
- The agency designated to complete compliance reviews should conduct targeted compliance reviews specifically focused on the 3% Priority Program to promptly identify and correct any violations.
Auditee’s Response
We respectfully disagree with the accuracy and completeness of some of the information reported and object to various implications discussed in the “Other Matters” of the report. . . .
With regard to the accuracy of “issues” and recommendations presented, while we can concur that MassAccess does not provide a real-time status of units filled, we disagree with: the notion that a targeted review . . . is needed (given the low vacancy rate); effective coordination and timely referrals did not occur within the program (given the evidence provided showing postings to MassAccess); and that there is unclear accountability among participating agencies and the project managers at developments participating in the program. The evidence gathered indicated that most properties within our portfolio were meeting or exceeding program requirements. . . .
With regard to the completeness of information presented, the “Other Matters” highlights “Agencies participating in the 3% Priority Program”, but we are uncertain on the evidence gathered to support the work of the other Agencies and why MassHousing would be accountable for their roles within the program. We are not suggesting that the field auditors did not obtain sufficient and appropriate evidence to form this conclusion but question the appropriateness of such commentary within a report addressed to MassHousing. This is especially concerning when evidence of our portfolio performance indicated otherwise. We urge you to consider dropping the “Other Matters” as it is contradictory to the conclusions formed with regard to the effectiveness of Asset Management Reviews (AMR), inappropriately suggests that MassHousing is responsible for the program in its entirety, and indicates that MassHousing did not provide priority access to housing units. . . .
In the interest of expediting the conclusion of this engagement, we can agree that MassHousing will engage in a discussion with the other parties noted in the Memorandum of Understanding (MOU) Relating to 3% Priority Units. While we can take your recommendations into consideration, we cannot unilaterally commit to implementing the activities listed. Additionally, the recommendations do not capture a cost/benefit analysis of their implementation and may not be feasible.
Auditor’s Reply
In its response, MassHousing acknowledges that there is no real-time inventory of available units through the MassAccess system but disagrees that this presents a potential issue for program coordination and referrals. It is important to note that during the course of our audit, MassHousing officials told us that they are actively working to update MassAccess to serve as a statewide tracking system for 3% Priority Program units and the respective EOHHS agency occupancy. This effort itself is an explicit acknowledgement that the current system needs improvement.
MassHousing disagrees with the recommendation to implement targeted compliance reviews for the 3% Priority Program, citing low vacancy rates and the effectiveness of existing AMRs. While AMRs provide broad oversight, they are not designed to assess whether program-specific requirements—such as eligibility, referrals, and occupancy—are being monitored with sufficient depth and frequency. Targeted reviews would help ensure that these critical elements of the program are being consistently implemented and would supplement, rather than duplicate, existing monitoring efforts.
MassHousing expressed concern that the audit implies that it is solely responsible for the 3% Priority Program and questioned the appropriateness of our comments related to other agencies’ roles. We understand that MassHousing is not the only entity responsible for the program’s administration and agree that accountability is shared among the parties that participate in the program through the MOU. However, the audit noted that no agency has been formally designated to oversee compliance or interagency coordination since MassHousing’s role under the MOU expired on March 1, 2023. It is actually this lack of a clearly defined oversight structure in the MOU that increases the risk of unclear roles and inconsistent follow-through on program responsibilities. Our recommendation to assign formal oversight responsibility is not an assignment of blame but a reflection of the need for more structured coordination and accountability among all participating agencies. Given its prior role as facilitator of communication and awareness of the evaluation requirement established in the MOU, we would have expected MassHousing to have proactively led the assessment of the program’s administrative effectiveness and, if warranted, to have facilitated the development of a successor agreement.
We appreciate MassHousing’s willingness to engage in discussions with the other participating agencies. We encourage MassHousing to implement our recommendations to the extent that it determines feasible, as these improvements are intended to enhance program effectiveness, ensure that the 3% Priority Program meets its intended goals, and ensure that this program better serves the housing needs of residents across the Commonwealth.
| Date published: | October 30, 2025 |
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