Appendix

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to examine HCD’s inspection process as mandated by the Mobilehome Parks Act. The table below lists the objectives that the Audit Committee approved and the methods we used to address them.

Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit objectives.	Identified and reviewed relevant federal and state laws, rules, and regulations related to the Mobilehome Parks Act (MPA) program.
2	For the last three years, review HCD’s approach to inspections by doing the following:
	a. Identify the number of parks inspected and the frequency with which HCD inspects parks under the Mobilehome Parks Act complaint process—complaint inspections—and the parks program—park inspections—and determine whether HCD is meeting any applicable goals and requirements.	Analyzed HCD data to determine the total number of park inspections HCD conducted in 2017, 2018, and 2019, and to determine the number of complaints HCD received, inspected, completed, and closed without inspections in the same years. Analyzed HCD data to determine the number of park inspections each inspector conducted in 2017, 2018, and 2019. Determined the number of mobile home parks for which HCD did not conduct either a park or complaint inspection from 2010 through 2019. For these parks, determined how many HCD visited for other types of inspections in those same years. Identified parks in each of five inspectors’ areas to determine where the inspectors conducted park inspections during 2017, 2018, and 2019. We found that parks reviewed by each of the five inspectors were geographically dispersed throughout each of their respective regions. Reviewed how the requirements for annual park inspections have changed over time. Compared park inspections HCD conducted to parks in HCD’s jurisdiction to determine whether HCD met the 5 percent park inspection goal during 2017, 2018, and 2019.
	b. For a selection of Mobilehome Park Maintenance (MPM) and MPA mobile home park inspections, determine the total and average number of hours spent on inspections. Additionally, to the extent possible, determine the total and average number of hours spent on inspections of mobile homes pursuant to applicable state regulations.	Selected and reviewed 30 park inspections and 24 complaint inspections to determine the time inspectors spent on inspections; to assess inspectors’ compliance with HCD policies and procedures in conducting inspections on time; and to determine the amount of time HCD provides to residents and park management to remedy violations. Reviewed inspection records to determine the time inspectors spent for each of the selected inspections on the preinspection conference, initial inspection, and reinspections.
	c. To the extent possible, determine the percentage of time inspectors devote to those inspections as opposed to other inspection work.	Because we determined that key data fields in HCD’s CASAS database were not reliable for the purposes of our analysis, we could not determine the time inspectors spent on other inspection work.
	d. Review the adequacy of HCD’s budget for staffing to address MPA complaints and MPM program inspections.	Reviewed HCD’s budget and expenditure reports for fiscal years 2016–17 through 2018–19 for HCD’s park and complaint inspections to determine whether program fees reasonably covered associated expenditures.
3	Evaluate HCD’s processes and practices related to inspecting parks by doing the following:
	a. Identify and assess HCD’s policies and procedures for selecting which parks it will inspect each year, including factors it considers in doing so.	Because HCD lacked policies and procedures for selecting parks for annual park inspections, we interviewed field office managers to identify HCD’s selection practices. Evaluated these selection practices for compliance with state law. Identified reasons for other types of park visits performed by inspectors. Reviewed HCD’s practices for documenting these visits.
	b. Review and evaluate HCD’s policies, procedures, and tools related to inspections and, to the extent possible, determine whether they incorporate best practices.	Reviewed whether HCD’s policies for conducting park inspections and complaint inspections met applicable requirements. Reviewed GAO audits and HUD procedures to identify best practices relevant to park inspections and complaint inspections. Compared these best practices to HCD’s policies, procedures, and tools to determine whether HCD policies, procedures, and tools incorporate best practices. Reviewed HCD’s policies, procedures, and tools for monitoring LEAs, including the extent to which HCD follows up on complaints it refers to them. Determined whether HCD documents its monitoring of LEAs. Reviewed four complaints HCD referred to LEAs to assess whether HCD appropriately monitored LEA compliance with requirements. Reviewed state law to determine the extent of LEAs’ enforcement authority over mobile home parks for which they have taken responsibility.
	c. For a selection of inspections from the last three years, assess inspectors’ compliance in conducting inspections according to HCD policies and procedures or any other applicable requirements. Evaluate the methods inspectors use to conduct and document these inspections.	For the 30 park inspections and 24 complaint inspections selected in Objective 2, assessed whether HCD inspectors met requirements for inspection timeliness, documenting violations, providing adequate notice of inspections and violations, and intent to pursue enforcement actions.
	d. For the same inspections, to the extent practical, assess their quality by analyzing the scope and the amount of time taken to conduct the inspections and whether the time was adequate.	Determined whether the checklist inspectors used during park inspections assesses compliance with minimum health and safety standards specified in the MPA. We found that the scope of park inspections is reasonable because the list addresses these minimum standards. For the 24 complaint inspections we reviewed, we determined whether inspectors addressed all allegations in their inspection reports. Observed two park inspections and two complaint inspections with HCD inspectors to assess the quality and scope of the inspection processes. Interviewed four additional inspectors to gain additional perspective on the inspection processes and to identify potential inconsistencies.
4	Identify and assess HCD’s policies, procedures, and practices to ensure that inspectors are impartial and preserve the appearance of impartiality during their inspections. Determine the extent to which park owners or residents join inspectors during inspections and whether that involvement is appropriate.	Reviewed HCD’s policies, procedures, and practices and interviewed relevant HCD staff to determine the agency’s process for ensuring that inspectors conduct inspections impartially and professionally. Identified policies, procedures, and practices for allowing park owners and residents to accompany inspectors during park and complaint inspections and determined whether they comply with applicable laws and regulations. Assessed HCD’s policies, procedures, and practices related to addressing complaints of inspector misconduct. Reviewed statements of economic interests for a selection of inspectors from 2017 through 2019 to determine whether those inspectors reported financial interests. Determined whether HCD took appropriate steps to mitigate potential conflicts of interest.
5	Compare the MPA complaint inspection and MPM program inspection process and, to the extent possible, identify opportunities for coordination between them that may result in new benefits or efficiencies.	Reviewed HCD’s processes for park inspections and complaint inspections to identify any overlap. Reviewed inspection records to identify the extent to which HCD had incorporated complaint inspections into park inspections. Reviewed 30 park inspection and 24 complaint inspection files selected in Objective 2 to identify instances when HCD initiated a complaint inspection during a park inspection and assessed appropriateness under the circumstances. Identified constraints that would prevent additional coordination between park inspections and complaint inspections. We found that statutory time frames for initiating park inspections and for conducting complaint inspections generally prevent coordination. State law requires HCD to notify parks at least 30 days before park inspections, which is the maximum number of days it provides HCD to inspect complaints. As a result, HCD generally cannot incorporate complaints into park inspections unless it provides less than 30 days’ notice or inspects the complaint late. Therefore, we did not identify new opportunities for coordination between the two types of inspections that may result in new benefits or efficiencies.
6	Assess HCD’s use of its inspectors by doing the following:
	a. Identify the number of inspectors conducting MPA-related complaints and MPM program inspections and assess their workloads.	Reviewed HCD’s CASAS data to identify the number of inspectors conducting park inspections and complaint inspections and assessed the accuracy of inspector workload data.
	b. Identify and assess inspectors’ qualifications and whether HCD ensures that they comply with any ongoing training requirements.	Identified the minimum qualifications required to become an inspector. For a selection of nine inspectors, we found that the inspectors listed experience in their application that satisfied HCD’s minimum qualifications requirement. Reviewed HCD’s procedures, practices, and tools for training inspectors, including initial and ongoing training requirements.
	c. Analyze how HCD allocates inspectors between inspections of MPA complaints and MPM program inspections and whether inspectors can and do perform both types of inspections.	Interviewed managers to determine how HCD allocates inspectors between park inspections and complaint inspections. We found that HCD generally assigns inspectors to geographically defined districts, in which each inspector performs both park and complaint inspections.
	d. Determine and evaluate the factors HCD considers when it assigns inspectors to conduct inspections.	Assessed HCD’s practices for assigning and prioritizing park inspections and complaint inspections. We found that HCD’s practices are reasonable. HCD generally assigns inspectors a similar number of park inspections and assigns inspectors to conduct complaint inspections for complaints pertaining to their districts.
7	Review the adequacy of notice given to affected parties in the inspection process.	Reviewed a selection of notices of violation and notices of upcoming inspection to determine whether HCD complies with statutory requirements for the content of these notices.
8	Review HCD’s policies, procedures, and practices to determine the amount of time HCD provides to park residents and management to remedy violations identified during inspections. Assess what occurs when residents and management do not remedy violations and, to the extent possible, identify opportunities to increase the number of violations remedied.	Reviewed HCD’s policies and procedures to identify the time it provides affected parties to resolve violations. Using the 30 park inspections and 24 complaint inspections selected in Objective 2, we reviewed HCD’s compliance with time requirements for remedying violations before conducting reinspections. For three park inspections that resulted in either the suspension of the permit to operate or referral to a district attorney, assessed the reasonableness of the actions HCD took when park owners or residents failed to remedy violations. Assessed whether HCD could improve the steps it takes to help park owners and residents remedy violations.
9	Review and evaluate inspectors’ follow-up visits after inspections to ensure compliance by doing the following:
	a. Assess whether HCD’s policies and procedures provide guidance on follow-up visits after inspections, and determine whether these visits are considered part of MPM program inspections or the MPA complaint process.	Reviewed HCD’s policies and procedures to determine the timing of reinspections after the initial park or complaint inspection.
	b. For a selection of inspections from the last three years, determine the frequency of follow-up visits conducted by HCD.	Determined the frequency of reinspections for the 30 park inspections and 24 complaint inspections selected in Objective 2.
	c. For those inspections, determine which types of violations were subject to follow-up and how HCD deemed the inspections complete and violations resolved.	Reviewed inspection reports to determine how inspectors deem inspections complete and violations resolved. We found that given its general practice to conduct reinspections until all identified violations are resolved, we determined that HCD considers an inspection complete once the inspector deems all violations resolved and closes the inspection file. Further, inspectors generally deem violations resolved when they no longer identify those violations during reinspections.
10	Evaluate the extent to which HCD makes inspection records publicly available.	Identified HCD’s policies and procedures for sharing inspection records with the public. Assessed whether HCD complied with time requirements for responding to Public Records Act (PRA) requests. For five PRA requests we reviewed, HCD generally responded within time requirements and provided any responsive records requested. Evaluated the value and feasibility of publishing HCD park inspection records online. Our review found that although publishing inspection records online is feasible, there is more value in publishing aggregate data, such as the number of complaints against mobile home parks or the date of the last park inspection. To this end, HCD indicated that it will publish online its biennial internal reports on inspection activities, which includes this aggregate information.
11	Review and assess any other issues that are significant to the audit.	Reviewed HCD’s process for monitoring inspectors’ use of state vehicles. Reviewed a 2015 internal audit related to HCD’s management of the MPA and evaluated HCD’s progress in addressing relevant audit findings and recommendations.. Interviewed managers to identify how they monitor inspectors’ workloads to determine the inspectors are completing an appropriate amount of work.

Source: Analysis of Audit Committee’s audit request number 2019-111, as well as information and documentation identified in the column titled Method.

Assessment of Data Reliability

In performing this audit, we relied on electronic files from the CASAS database that HCD uses to track various inspection program activities. The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of the computer‑processed information that we use to support our findings, conclusions, and recommendations. To evaluate these data, we performed dataset verification procedures and electronic testing of the key data elements. We also verified accuracy of the data by tracing key data against sources of corroborating documentation from actual inspection files and verified completeness of the data by haphazardly selecting inspections from HCD’s paper files and ensuring that each inspection existed in CASAS. We determined the data to be sufficiently reliable for the purpose of selecting park and complaint inspection files for testing, determining the number of park and complaint inspections HCD conducted in 2017 through 2019, and calculating the average number of park and complaint inspections that HCD inspectors performed for those years. When evaluating inspector workload data we found errors in the accuracy of time spent on inspections. Therefore, the data was not sufficiently reliable to determine the inspector workload. When testing data used in determining other inspection work unrelated to park or complaint inspections completed for 2010 through 2019, we identified that 152,000 of the 243,000 inspection records did not include data that identified the park associated with the other inspection work. We also found an error in the accuracy of the activity code data that showed HCD could not document that it had conducted other inspection work that was recorded in CASAS. As a result, the data are not sufficiently reliable for determining other inspection work HCD conducted for 2010 through 2019. Although this determination may affect the precision of some of the numbers we present, there is sufficient evidence in total to support our findings, conclusions, and recommendations.

In addition, we relied on the California State Accounting and Reporting System accounting data to provide background information on HCD’s parks program revenue and expenditures for fiscal years 2016–17 through 2018–19. Because these data were used primarily for background or contextual information that does not materially affect findings, conclusions, or recommendations, we determined that a data reliability assessment of those data was not necessary.