A Performance Audit
An Audit Report on Regulatory Activities at the Manufactured Housing Division
October 2019
Summary Analysis
While the Manufactured Housing Division (Division) did not have adequate controls over its installation inspections, it established processes for issuing Texas Seals, processing complaints, and issuing and monitoring licenses for manufactured homes.
Recording and monitoring installation inspections The Division had significant weaknesses in its oversight of installation inspections. In addition, the Division did not have controls to help ensure the accuracy of installation inspection information entered into its tracking system.
Issuing Texas Seals The Division had processes and related controls for issuing unique identification numbers, called Texas Seals, in compliance with applicable requirements.
Processing Complaints The Division established procedures for evaluating complaints that addressed statutory requirements and evaluated all complaints according to those procedures.
Issuing and Monitoring Licenses The Division had processes and related controls in place to help ensure that it issued and monitored licenses for manufactured home salespersons, manufacturers, installers, brokers, and retailers in accordance with applicable requirements.
System Controls The Department had processes in place for change management; however, the Division should strengthen its user access controls.
The Manufactured Housing Division (Division) conducts inspections to verify that manufactured homes are correctly installed, which includes verifying that homes are properly anchored to their foundations. Performing installation inspections is the primary means by which the Division ensures that manufactured homes are installed correctly and are safe for residents.
According to the Division’s inspection data, it received 29,196 notices of installation between September 1, 2017, and March 31, 2019, and reported that it conducted 28,104 inspections related to those notices of installation. However, data analysis indicates that inspections may not be consistently performed and that inspection results are not correctly recorded, because the Division is not adequately tracking and monitoring installation inspections. Specifically, the Division:
- Does not have monitoring processes in place to help ensure that installation inspections were conducted as reported.
- Does not enforce its requirement that inspectors enter inspection findings in its internal tracking system, Exodus.
- Does not have adequate controls to ensure the accuracy of key information, such as inspection dates, that inspectors enter into Exodus.
The Division had processes and related controls for issuing Texas Seals in compliance with applicable requirements. Specifically, for 36 (97 percent) of 37 Texas Seals tested, the Division based its decision to issue the Texas Seal on appropriate supporting documentation.
The Division had processes and related controls to help ensure that it processed complaints in accordance with applicable requirements. The Division established procedures for evaluating complaints that addressed statutory requirements and evaluated all complaints that it determined were valid according to those procedures.
The Division issues licenses for manufactured home salespersons, manufacturers, installers, brokers, and retailers in Texas as required by Texas Occupations Code, Section 1201.101. The Division had processes and related controls in place to help ensure that it issued and monitored licenses in accordance with applicable requirements.
The Department of Housing and Community Affairs established a change management process for programming changes to the Exodus system.
Additionally, the Manufactured Housing Division limited access to only those individuals needing that access. However, it did not always base that access on the users’ assigned job duties.
Graphics, Media, Supporting documents