oversight

Procurement Activities, Housing Authority of the City of San Antonio, San Antonio, Texas

Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-08-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

     AUDIT REPORT




 HOUSING AUTHORITY OF THE
   CITY OF SAN ANTONIO

  PROCUREMENT ACTIVITIES

     SAN ANTONIO, TEXAS

         00-FW-201-1004
         AUGUST 9, 2000
OFFICE OF AUDIT, SOUTHWEST DISTRICT
        FORT WORTH, TEXAS
                                                                        Issue Date
                                                                                August 9, 2000

                                                                        Audit Case Number
                                                                                00-FW-201-1004




TO:          Diana Armstrong
             Director
             Office of Public Housing, 6JPH


FROM:        D. Michael Beard
             District Inspector General for Audit, 6AGA

SUBJECT: Procurement Activities
         Housing Authority of the City of San Antonio
         San Antonio, Texas


As requested by your office, we conducted an audit of certain procurement activities of the San Antonio
Housing Authority. We received indications of the need for an audit from City officials and newspaper
articles. Also, our audit of the Authority’s HOPE VI Program, report number 99-FW-201-1003,
dated January 29, 1999, identified weaknesses requiring some additional audit coverage in the
procurement area. During this audit of procurement activities we focused on concerns expressed and
weaknesses previously identified. This audit contains one finding.

Within 60 days please give us, for each recommendation in this report, a status report on: (1) the
corrective action taken; (2) the proposed corrective action and the date to be completed; or (3) why
action is considered unnecessary. Also, please furnish us copies of any correspondence or directives
issued because of the audit.

If you have any questions, please contact Jerry Thompson, Assistant District Inspector General for
Audit, at (817) 978-9309.
Management Memorandum




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00-FW-201-1004           Page ii
Executive Summary
We conducted an audit of the San Antonio Housing Authority to find the extent of
procurement irregularities affecting HUD programs involving: (1) purchases from the
Authority’s affiliated nonprofit corporations; (2) child-care services purchased from a former
resident commissioner; (3) furniture purchased from a local nonprofit corporation; and (4) the
Economic Development Program. We found the Authority violated federal conflict of interest,
procurement, and cost requirements and used HUD program funds to pay about $865,409 in
questionable costs.




                                    Managers entered into a noncompetitive arrangement with their
   Noncompetitive                   affiliate, the San Antonio Housing Assistance Corporation
   procurement                      (SAHAC) resulting in HUD programs paying questioned costs
   arrangement with                 of about $822,508 for 3 fiscal years ending June 30, 1999.
   affiliate.                       HUD programs paid: excessive disposal service fees of about
                                    $336,865; the affiliate’s disposal service operating costs of
                                    about $461,028; and about $24,615 for debris removal at non-
                                    HUD properties. Authority managers also permitted the affiliate
                                    to use HUD equipment and facilities without paying rental or
                                    utility costs.

   Excessive fees to a              The Authority paid excessive fees to a former commissioner for
   former commissioner for          child-care services provided to residents of Springview
   child-care services.             Apartments, a HUD property. The former commissioner over-
                                    billed for the services by about $31,352. Authority managers
                                    paid the excessive billings using HUD funds and although they
                                    were aware of the over-billings as early as 1997, they have not
                                    yet reimbursed HUD programs from non-federal funds.

                                    Due to a conflict of interest, the Authority paid $25,000 to a
   Excessive costs of               local nonprofit organization for furniture appraised at only
   furniture purchased from         $12,175. The Authority’s former Board Chairperson
   a nonprofit organization.        negotiated the purchase while occupying positions on both the
                                    nonprofit and Authority boards. The former President/CEO
                                    approved the payment, apparently knowing the appraised value
                                    of the furniture. Authority managers allocated costs of about
                                    $11,549 in excess of the appraised value to the HUD Low
                                    Rent, Drug Elimination, Comprehensive Grant, Hope VI, and
                                    Section 8 Programs.




                                                 Page iii                            00-FW-201-1004
Executive Summary


                                               Our HOPE VI audit 1 recommended HUD require the Authority
     Authority officials did not
                                               to implement policies and procedures to ensure compliance with
     follow their procurement
                                               federal procurement requirements. Managers developed
     policy and requirements.
                                               adequate policies and procedures but did not follow them. We
                                               are recommending actions to correct the problem, the
                                               repayment of ineligible costs of about $810,692, and the
                                               Authority provide support for, or repay, salaries and benefits
                                               expenses of about $54,717. We are also recommending HUD
                                               to consider taking administrative sanctions against those
                                               Authority officials and Commissioners involved in the conflict-
                                               of-interest decisions.

                                               Our audit also included an examination of the Authority’s
     No outstanding issues
                                               Economic Development Program. The former Economic
     remain regarding the
                                               Development Program Director did not follow procurement
     Economic Development
                                               guidelines, properly monitor a consultant, and opened
     Program.
                                               unauthorized bank accounts. Authority management conducted
                                               a review and took appropriate actions. Although the program
                                               had problems, no outstanding issues existed at the completion
                                               of our audit.

                                               We provided a draft report to the Authority officials on
     Finding discussed with
                                               June 20, 2000, and they issued their response on July 14,
     Authority officials.
                                               2000. We had an exit conference on July 20, 2000. Authority
                                               managers disagreed that they violated federal conflict of interest,
                                               procurement, and cost requirements regarding the
                                               noncompetitive procurement arrangement with its affiliate, the
                                               San Antonio Housing Assistance Corporation. They said the
                                               disposal service fees were not excessive. They said HUD had
                                               approved the arrangement. However, they agreed to reimburse
                                               HUD programs for over $480,000 for costs attributable to the
                                               disposal service operations and debris removal from non-HUD
                                               properties. They generally agreed that the Authority had
                                               overpaid for child care services and furniture and that HUD
                                               programs should be reimbursed. We summarized their
                                               response in the findings and included a copy of the response,
                                               without attachments, as Appendix B.




1
    Report No. 99-FW-201-1003, dated January 29, 1999.

00-FW-201-1004                                      Page iv
Table of Contents

Management Memorandum                                                i


Executive Summary                                                   iii


Introduction                                                          1


Finding

1    The Authority’s Conflict-of-Interest Arrangements          3
     caused HUD Programs to Pay Questionable Costs of
     About $865,409


Management Controls                                             21



Follow Up on Prior Audits                                       23



Appendices
     A Schedule of Questioned Costs                        25

     B Auditee Comments                                    27

     C Distribution                                        47




                                      Page v             00-FW-201-1004
Table of Contents


Abbreviations
        ACC         Annual Contributions Contract
        CFR         Code of Federal Regulations
        HUD         U.S. Department of Housing and Urban Development
        OIG         Office of Inspector General
        OMB         Office of Management and Budget
        SAHAC       San Antonio Housing Assistance Corporation




00-FW-201-1004                    Page vi
Introduction
                          Texas statute established the Housing Authority of the City of
 Background
                          San Antonio in 1937. During our review period, a five-member
                          Board of Housing Commissioners provided general oversight of
                          Authority activities. Currently, the authorized number of board
                          members is 11, including the Chairperson. Mr. Melvin Braziel,
                          President and Chief Executive Officer, and Richard Martinez,
                          Chief Operating Officer, are in charge of day-to-day
                          operations. The Authority’s administrative offices and records
                          are located at 818 S. Flores in San Antonio, Texas.

                          The Authority administers over 8,000 public housing units and
                          provides rental assistance to about 10,000 families in privately-
                          owned residences. During fiscal year 2000, HUD provided
                          over $94,000,000 in assistance for the Authority’s Low Rent,
                          Section 8, Comprehensive Grant, Public Housing Drug
                          Elimination Grant, and HOPE VI Programs.

                          In 1981 the Authority created a nonprofit affiliate, the San
                          Antonio Housing Assistance Corporation (SAHAC), to dispose
                          of solid waste at Authority-managed properties. All of the
                          Authority’s commissioners also serve on the affiliate’s board.

                          We issued an audit report on January 29, 1999, on the
                          Authority’s HOPE VI Program that disclosed the Authority did
                          not comply with HUD procurement regulations and
                          requirements. The report included recommendations for HUD
                          to require the Authority to: (1) develop a comprehensive
                          procurement policy and (2) take steps to ensure full and open
                          competition and purchases are only for eligible expenditures.
                          This audit addresses some of the same issues and concerns
                          related to procurement.

                          The Audit objective was to find the extent of irregularities
 Audit Objective, Scope
                          involving the Authority’s procurement of goods and services
 and Methodology
                          from: (1) affiliated, nonprofit corporations; (2) a former
                          resident commissioner; (3) a local nonprofit corporation; and
                          (4) participants in the Authority’s Economic Development
                          Program.

                          To accomplish the objective, we:

                          •   Interviewed U.S. Department of Housing and Urban
                              Development (HUD) and Authority employees, former


                                Page 1                                   00-FW-201-1004
Introduction


                                                     Housing Commissioners, former employees and directors of
                                                     the local nonprofit corporation, and other individuals as
                                                     necessary;

                                                •    Analyzed and compared disposal service fees the Authority
                                                     paid to their affiliate, the San Antonio Housing Assistance
                                                     Corporation, to fees the Authority paid local commercial
                                                     disposal companies for disposal services;

                                                •    Obtained information from the Authority’s Internal Audit
                                                     Department detailing excessive child-care payments to the
                                                     former commissioner totaling about $31,352. We relied on
                                                     the Department for this information and limited our work to
                                                     a review of the relevant agreement, certain accounting
                                                     documents, and interviews. We did not review all of the
                                                     documentation to verify the accuracy of the amount
                                                     overcharged;

                                                •    Obtained and reviewed the HUD Procurement Handbook,2
                                                     federal regulations, State law, the Authority’s procurement
                                                     policy, the Annual Contributions Contract, contract files,
                                                     financial records, correspondence, ownership documents,
                                                     and Tampico warehouse acquisition and development costs
                                                     records;

                                                •    Obtained and analyzed annual audited financial statement
                                                     information; and

                                                •    Issued subpoenas to financial institutions to obtain financial
                                                     records relating to the Authority’s Economic Development
                                                     Program.

                                                We substantially performed field work at the Authority from
     Audit Period
                                                February 1998 through November 1999. Our work was
                                                periodically interrupted due to other higher priority assignments
                                                or other personnel conflicts. The audit generally covered 3
                                                fiscal years ending June 30, 1999, although we extended the
                                                review period when appropriate. We conducted the audit in
                                                accordance with generally accepted government auditing
                                                standards.

2
    Procurement Handbook for Public and Indian Housing Authorities    , Directive Number 7460.8, effective January   14,
    1993.


00-FW-201-1004                                       Page 2
                                                                                                 Finding


        The Authority’s Conflict-of-Interest
    Arrangements Caused HUD Programs to Pay
      Questionable Costs of About $865,409
The Authority entered into excessive, noncompetitive, and conflict-of-interest procurement
arrangements involving: an affiliate, the San Antonio Housing Assistance Corporation
(SAHAC); a children’s day care operation, Dora’s Sure Care; and a nonprofit agency, the
Partnership for Hope. Authority managers and Board members had conflicts of interest in the
arrangements. As a result, managers used HUD program funds to pay questionable costs of
about $865,409. Specifically, this amount includes $336,865 in excessive disposal service
fees, $461,028 in the affiliate’s disposal service operating costs, about $24,615 charged to the
Low Rent Program to remove debris from non-HUD housing projects, $31,352 in excessive
tenant child-care fees, and $11,549 in excessive furniture costs. Managers also allowed the
affiliate to use Low Rent Program facilities and equipment without paying rent or utility costs.
Also, the conflict-of-interest arrangements resulted in: an increase in the affiliate’s retained
earnings of about $335,000 for the period July 1, 1996, through June 30, 1999, apparent
additional income to a former resident Board member, and the discharge of a possible debt of
a Board chairperson. All occurred at the expense of HUD programs.




                                     The Annual Contribution Contract (ACC) between HUD and
   Requirements
                                     the Authority incorporates by reference the regulations for
                                     Public and Indian Housing Authorities contained in Title 24 of
                                     the Code of Federal Regulations (CFR). Title 24 of the CFR,
                                     part 85, establishes the uniform administrative rules for Federal
                                     Grants and cooperative agreements and sub-awards to State,
                                     local and Indian tribal governments. This part also establishes
                                     OMB Circular A-87 as the cost principles for housing
                                     authorities to follow when determining allowable costs to federal
                                     programs.

                                     Regarding conflicts of interest, the ACC, Part A, Section 19,
                                     Subsection (A)(1), provides that neither the Housing Authority
                                     nor any of its contractors or their subcontractors may enter into
                                     any contract, subcontract, or arrangement in connection with a
                                     project under this ACC in which any of the following classes of
                                     people has an interest, direct or indirect, during his or her tenure
                                     or for one year thereafter:




                                               Page 3                                00-FW-201-1004
Finding


                                                 (i) Any present or former member or officer of the governing
                                                       body of the Housing Authority, or any member of the
                                                       officer’s immediate family...;
                                                 (ii) Any employee of the Housing Authority who formulates
                                                       policy or who influences decisions with respect to the
                                                       project(s), or any member of the employee’s immediate
                                                       family, or the employee’s partner; or
                                                 (iii) Any public official, member of the local governing body, or
                                                       State or local legislator, or any member of such individual’s
                                                       immediate family, who exercises functions or responsibilities
                                                       with respect to the project(s) or the Housing Authority.

                                                 The requirements of this Subsection (A)(1) may be waived by
                                                 HUD for good cause, if permitted under State and local law.
                                                 No person for whom a waiver is requested may exercise
                                                 responsibilities or functions with respect to the contract to which
                                                 the waiver pertains.

                                                 Applicable procurement regulations, Title 24 of the CFR,
                                                 Section 85.36 (b)(3), prohibit an employee, officer, or agent of
                                                 the Authority to participate in the selection, award, or
                                                 administration of a contract if a conflict of interest, real or
                                                 apparent, would be involved. Such a conflict would arise when:
                                                 (i) The employee, officer or agent;
                                                 (ii) Any member of his immediate family;
                                                 (iii) His or her partner; or
                                                 (iv) An organization which employs, or is about to employ, any
                                                       of the above, has a financial or other interest in the firm
                                                       selected for award.

                                                 The regulations3 require all procurement transactions be
                                                 conducted in a manner providing full and open competition.
                                                 Situations considered to be restrictive of competition include:
                                                 (1) non-competitive pricing practices between firms or between
                                                 affiliated companies and (2) any arbitrary action in the
                                                 procurement process.

                                                 OMB Circular A-87, Cost Principles for State and Local
                                                 Governments,4 requires costs to be necessary and reasonable
                                                 for proper and efficient performance and administration of

3
    Title 24 of the Code of Federal Regulations, Section 85.36(c).
4
    OMB Circular A-87, Attachme nt A, Part C. Basic Guidelines.


00-FW-201-1004                                        Page 4
                                                                                                             Finding


                                                   federal awards. A cost is reasonable if, in its nature and
                                                   amount, it does not exceed that which would be incurred by a
                                                   prudent person under the circumstances prevailing at the time
                                                   the decision was made to incur the cost. In determining
                                                   reasonableness, considerations include:

                                                   a. Whether the cost is of a type generally recognized as
                                                      ordinary and necessary...;
                                                   b. The restraints or requirements imposed by such factors as:
                                                      sound business practices; arms length bargaining; Federal,
                                                      State and other laws and regulations; and terms and
                                                      conditions of the Federal award;
                                                   c. Market prices for comparable goods or services;
                                                   d. Whether the individuals concerned acted with prudence in
                                                      the circumstances considering their responsibilities to the
                                                      governmental unit, its employees, the public at large, and the
                                                      Federal Government; and
                                                   e. Significant deviations from the established practices of the
                                                      governmental unit which may unjustifiably increase the
                                                      federal award’s cost.

                                                   Also, OMB Circular A-87 provides that costs are allocable to
                                                   a particular cost objective if the goods or services involved are
                                                   chargeable or assignable to such cost objective in accordance
                                                   to the relative benefits received.

                                                   Authority managers entered into a non-competitive arrangement
     HUD programs paid
                                                   with their affiliate, the SAHAC, causing HUD programs to pay
     excessive disposal
                                                   excessive disposal service fees totaling about $336,865 for
     service fees of about
                                                   fiscal years 1997, 1998, and 1999. Authority managers
     $336,865.
                                                   operate the affiliate and the Authority’s governing board
                                                   members also serve on the affiliate’s Board creating a conflict-
                                                   of-interest relationship as defined by HUD regulations.5 The
                                                   Authority did not, however, request a conflict-of-interest waiver
                                                   from HUD as required.

                                                   Managers did not require the affiliate to compete for disposal
                                                   work and instead determined the affiliate’s service fees during
                                                   an annual budgeting process. The Authority’s current President
                                                   and Chief Executive Officer told us he prepared the initial
                                                   proposal and implemented the affiliate’s solid waste disposal

5
    Title 24, Code of Federal Regulations, Section 85.36(b).


                                                               Page 5                             00-FW-201-1004
Finding


                 operations in 1981. He said he studied the situation and found
                 the costs of operating their own disposal service (exclusive of
                 start up costs) would be less than what the Authority paid for
                 contract services. The affiliate provided disposal service at
                 Authority developments until January 1997 when the Authority
                 awarded a contract for disposal services at nonprofit and
                 elderly developments. The Authority solicited bids for this
                 contract in October 1996. Authority officials said they
                 reviewed the affiliate’s revenues and expenses annually but did
                 not consider market commercial disposal service rates when
                 setting the affiliate’s disposal service fees. The affiliate receives
                 all of its disposal service revenues from the Authority and other
                 affiliates.

                 We noted the affiliate’s Annual Financial Statements contained
                 an evaluation of disposal service fees showing a cost saving to
                 the Authority’s properties. However, the evaluation included a
                 comparison of the affiliate’s fees to the City of San Antonio’s
                 per-unit disposal fees. The City’s rates were based on a
                 garbage can for each unit. However the actual method used for
                 garbage disposal required the tenants to place trash into large
                 garbage bins. Disposal service employees would then empty
                 the bins into garbage trucks with lift equipment. The evaluation
                 did not compare the affiliate’s rates with local disposal
                 companies’ commercial rates for comparable services. We
                 found no evidence to indicate the Authority had ever compared
                 the affiliate’s rates with other rates for comparable services.
                 We also noted the affiliate’s financial statements showed an
                 increase in retained earnings of about $335,000, from about
                 $671,000 to $1,006,000, during the fiscal years 1997 through
                 1999.

                 We compared the affiliate’s disposal service fees to commercial
                 fees on a cost-per-yard basis; that is, total cost divided by the
                 total volume of all disposal bins emptied during the period.
                 Commercial disposal service fees remained generally consistent,
                 on a per-yard basis, regardless of bin size and service
                 frequency. For this reason, and because we believe cost-per-
                 yard is an accurate measure of service provided for fee paid,
                 we used cost-per-yard to compare the affiliate’s disposal
                 service fee with commercial fees. The affiliate’s per-yard fee
                 exceeded commercial fees by about $336,865 for the 3-year
                 period ending June 30, 1999, as shown in the table below.


00-FW-201-1004       Page 6
                                                                                                                      Finding


                                        Commercial-        Affiliate            Excessive       Annual Yards      Excessive
                               Year     cost-per-yard      cost-per-yard        cost-per-          Collected 6   Annual fees   7

                                                                               yard
                               1997     $ 1.958            $ 2.67              $ 0.72               240,032       $172,823
                               1998       2.479              2.70                  0.23             206,748         47,552
                               1999       1.8910             2.58                  0.69             168,826        116,490
                                                           Total fees paid in excess of commercial rates          $336,865


                                                   The affiliate also provided less service when compared to
                                                   commercial contracts. Commercial contracts in force during the
                                                   review period required: emptying disposal bins up to three
                                                   times per week; steam-cleaning bins every 30 days; removing
                                                   excess debris from around disposal sites; and included landfill
                                                   fees. In comparison, for its fee, the affiliate emptied bins only
                                                   twice each week, did not steam clean bins, did not remove
                                                   debris from dump sites, and did not pay landfill fees.

                                                   Authority managers used HUD funds to pay the affiliate’s
     HUD programs paid
                                                   disposal service operating costs of about $461,028 including:
     affiliate’s disposal
                                                   landfill fees estimated to be about $387,629; disposal service
     service operating costs of
                                                   employees’ salaries and benefits of about $18,682; and other
     about $461,028.
                                                   unsupported salaries and benefits expenses of about $54,717.

                                                   HUD properties, already paying the affiliate’s disposal service
     Disposal operation’s
                                                   fee, also paid landfill fees of about $387,629 that related to the
     landfill fees of about
                                                   affiliate’s disposal service. Commercial service fees, which
     $387,629 charged to
                                                   were comparatively lower, included landfill costs. The affiliate’s
     HUD programs.
                                                   disposal service fees, if competitive, should have included
                                                   landfill fees as well. The Authority allocated landfill fees totaling
                                                   about $430,699 to HUD properties for the 3-year period
                                                   ending June 30, 1999. However, we estimate about 90 percent
                                                   of this amount, or $387,629, relates to the affiliate’s ongoing
                                                   disposal operations. We estimated the remaining 10 percent
                                                   applied to debris removal not covered by comparable disposal
                                                   service.

                                                   Authority managers allocated landfill fees during the 3-year
                                                   period to HUD property accounts entitled “dump fees." These

6
     By the affiliate only.
7
     Excessive fee-per-yard multiplied by annual yards collected.
8
     January 1997 commercial contract.
9
     September 1997 commercial contract.
10
     Includes costs for roll-off fees and a September 1999 commercial disposal agreement.


                                                              Page 7                                      00-FW-201-1004
Finding


                                                  “dump fees” consisted of landfill fees for the disposal of: (1)
                                                  debris such as discarded furniture, appliances, and tree limbs
                                                  removed from HUD properties and (2) refuse removed from all
                                                  properties as part of the affiliate’s disposal operation. 11
                                                  Managers did not separately account for these “dump fees” by
                                                  garbage disposal and debris removal and do not know how
                                                  much relates to the various activities. We reviewed about 30
                                                  percent of these charges, or about $128,000 of the costs, by
                                                  examining landfill invoices during spring, summer, fall, and
                                                  winter months. The supporting documentation identified the
                                                  trucks delivering the waste material to the landfill. Therefore,
                                                  we could estimate the costs of garbage and debris dumped.
                                                  Based on our review, we concluded that about 90 percent of all
                                                  invoiced amounts related to the affiliate’s disposal operation.
                                                  Therefore, we estimated about $387,629 of the costs should
                                                  have been charged to the affiliate's disposal operation.

                                                  Authority managers said they reallocated dump fees of about
                                                  $147,885 from Low Rent accounts to the affiliate via journal
                                                  voucher # 0081, dated October 18, 1999. The voucher
                                                  established a payable by the affiliate to the Low Rent Program.
                                                  Authority managers, however, did not provide the requested
                                                  additional documentation verifying the repayment of “dump
                                                  fees” to HUD Low Rent Program accounts. Therefore, our
                                                  estimate of landfill costs related to the affiliate’s disposal
                                                  operation include these reallocated dump fees.

                                                  The Low Rent Program paid $18,682 in salary and benefits for
     Questionable salary and
                                                  an affiliate disposal service crew member and about $54,717 in
     benefit costs for disposal
                                                  salary and benefits for a general maintenance helper who
     service employees
                                                  worked with the disposal service crew and sometimes with the
     amount to $73,399.
                                                  debris crew. The disposal service crew operates the affiliate’s
                                                  disposal equipment and performs other duties related to the
                                                  affiliate’s ongoing disposal operations. The debris crew cleans
                                                  around disposal bins and picks up tree limbs, discarded
                                                  furniture, and other items at HUD and non-HUD properties.
                                                  No one kept track of the time the maintenance helper spent on
                                                  each activity. Since the HUD properties are already paying the
                                                  affiliate’s disposal service fees, we considered the salary and
                                                  benefits of the disposal worker, $18,682, to be ineligible costs

11
     The Authority allocates these costs using the Authority’s “80-” allocation method where costs are only allocated
     to Low Rent properties.


00-FW-201-1004                                         Page 8
                                                                                      Finding


                             to the HUD programs. Also, since part of the salary and
                             benefits of the general maintenance helper should be allocated
                             to the affiliate for disposal work and to non-HUD properties for
                             the time spent on the debris crew at those properties, we
                             consider these charges, $54,717, to be unsupported.

                             Other than the salary and benefits of the general maintenance
The Authority failed to
                             helper mentioned above, we estimated the Authority incorrectly
properly allocate costs of
                             charged HUD programs about $24,615 in costs of debris
debris collection
                             collection that should have been charged to non-HUD
activities.
                             programs during the 3 fiscal years 1997 through 1999. We
                             estimated about $21,662 in salary and benefits and $2,953 in
                             fuel and repair costs should have been charged to non-HUD
                             activities.

                             Authority managers charged salary and benefit costs totaling
                             about $170,344 for five debris crew employees solely to HUD
                             program accounts. A portion of these costs should have been
                             allocated to non-HUD accounts because debris crew members
                             spent part of their time at non-HUD properties. We had to
                             estimate the salaries and benefits expenses related to non-HUD
                             properties because Authority managers did not require crew
                             members to maintain detailed time records.

                             We determined the relative number of disposal bins at each
                             property was a reasonable basis for estimating salary and
                             benefit costs related to debris work at non-HUD properties.
                             We determined the percentages of disposal bins at HUD and
                             non-HUD properties for each year and applied the percentage
                             at non-HUD properties to the total to arrive at the costs that
                             should have been charged to non-HUD properties. The total
                             salary and benefits, the percentage of bins, and estimated salary
                             and benefit costs related to work performed at non-HUD
                             properties are shown in the following table:




                                       Page 9                              00-FW-201-1004
Finding

                                                 Fiscal         Total Salary/       Percentage 12      Estimated
                                                 Year           Benefits                               Ineligible
                                                 1999           $105,520               15%             $15,828
                                                 1998             10,77013               9%                  969
                                                 1997             54,054                 9%               4,865
                                                 Totals         $170,344                ----           $21,662

                                                 Managers used HUD funds of about $2,953 to pay repair and
     Low Rent Program paid
                                                 fuel charges for debris removal from non-HUD properties.
     for repair and fuel costs
                                                 Authority managers charged all of the fuel and repair costs to
     for debris removal at
                                                 HUD program accounts, although as indicated above, the
     non-HUD properties.
                                                 debris crew works at HUD and non-HUD properties. Using
                                                 the same methodology as mentioned above in estimating the
                                                 debris activity salary costs, the relative percentage of disposal
                                                 bins at non-HUD sites, we estimated fuel and repair costs that
                                                 should have been charged to non-HUD properties. Our table is
                                                 shown below:

                                                    Fiscal     Total fuel &     Applicable 12      Estimated
                                                    Year       repair costs     Percentage         Ineligible costs
                                                                                                   allocation
                                                    1999   $14,007                 15%              $2,101
                                                    1998    16,841                  9%                  25314
                                                    1997     6,656                  9%                  599
                                                    Totals $37,504                                  $2,953

                                                 Authority managers allowed the affiliate to use two Authority-
     Managers provided HUD
                                                 owned warehouses and an authority-owned truck without
     program facilities to the
                                                 paying rent and utility costs. The affiliate worked out of the
     affiliate free of rent and
                                                 Brazos warehouse15 until December 1997 and then moved to
     utility costs.
                                                 the recently renovated Tampico warehouse in January 1998.
                                                 The Authority used Low Rent and Comprehensive Grant funds
                                                 of about $32,878 and $762,190,16 respectively, to purchase
                                                 and renovate the Tampico warehouse. The Authority also used
                                                 HUD Low Rent funds of $10,760 to purchase a container-lift
                                                 truck in March 1986 that the affiliate used exclusively in its
                                                 disposal operations. The Authority transferred the truck to the
                                                 affiliate and set up a payable to the Low Rent Program on
12
     The pe rcentage of disposal bins at non-HUD properties.
13
     Total salaries and benefits expenses for 2 months only.
14
     Since the debris crew worked only 2 months at non-HUD properties this amount is calculated:
     $16,841 X .09 X 2/12.
15
     The Authority used Section 8 reserves to purchase the    Brazos warehouse.
16
     1993 and 1994 Comprehensive Grant funds of about $32,849 and $729,341, respectively.


00-FW-201-1004                                        Page 10
                                                                                                 Finding


                                     March 20, 2000. The Authority used additional HUD Low
                                     Rent funds of about $40,09817 to pay utility costs at the
                                     Tampico and Brazos warehouses. The Authority should
                                     determine and require the affiliate to repay Low Rent accounts:
                                     (1) reasonable utility costs and rental fees for the use of
                                     Authority facilities and (2) lost interest revenue for the purchase
                                     price of the truck ($10,760) for the 14-year period ending
                                     March 20, 2000.

                                     Authority managers used Springview Property (Low Rent
     Managers used HUD               Program) funds to pay excessive child-care costs totaling about
     funds to pay $31,352 in         $31,352. The former President/CEO entered into a contractual
     excessive child-care fees       agreement in 1994 with Dora’s Sure Care to provide child-care
     to a former                     services at the Springview Apartments.18 The owner of the
     commissioner.                   child-care service lived in the Springview Apartments when they
                                     made the agreement, and was a member of the Authority’s
                                     Board of Commissioners during 1996 and 1997. Managers
                                     allowed the commissioner to use Springview facilities for the
                                     child-care business without paying rent or utilities expenses.
                                     The former commissioner agreed to provide day care, on a
                                     part-time basis (approximately 8 hours per week per child), for
                                     children of Springview residents attending G.E.D. classes, not
                                     to exceed the maximum capacity of 12 allowed at any one time.
                                     The rate per child was $35 a week. The commissioner
                                     increased fees from $35-per-child-per-week to $81 per-child
                                     without formal approval, and requested fees for “spaces that
                                     could have been used.” Springview Apartments closed in
                                     August 1997 and the commissioner “sub-contracted” child-care
                                     to HUD tenants. Authority managers realized they were making
                                     excessive payments to the former commissioner in September
                                     1997 and brought the matter to the attention of the Internal
                                     Audit Department. In a February 16, 1998 letter, the Authority
                                     discontinued “direct child care service payments” but offered
                                     the former commissioner additional space to use as a child care
                                     facility. The Authority instituted a new payment procedure
                                     whereby residents could select a child care provider of their
                                     choice. The Authority managers have not yet required
                                     reimbursement to HUD programs for the excessive child care
                                     payments. The commissioner was generally non-cooperative


17
     As of June 30, 1999.
18
     Springview is a HUD property.


                                              Page 11                                00-FW-201-1004
Finding


                                              with Authority staff and would not provide verifiable billing
                                              information.

                                              The Authority’s Internal Audit Department interviewed HUD
                                              tenants and examined the commissioner’s billing information.
                                              They determined that from March 1994 to March 1998 the
                                              Authority paid child-care fees to the commissioner totaling
                                              about $56,988. However, based on their review, the
                                              commissioner should have been paid only about $24,605. The
                                              difference in the amount paid and the amount that should have
                                              been paid consisted of amounts billed over $35 per child per
                                              week, amounts billed for vacant slots, and errors or double
                                              billings.

                                              During 1996, a local nonprofit organization, the Partnership for
     Managers used HUD                        Hope, had to sell its furniture to meet outstanding obligations.
     funds of about $11,549 to                The Authority’s Board Chairperson at the time also held a
     discharge a                              position on the nonprofit’s Board and was personally liable for
     Commissioner’s personal                  a portion of the nonprofit’s outstanding debt. The former
     liability.                               Chairperson negotiated with Authority managers for the
                                              purchase of the nonprofit’s furniture. Shortly thereafter, the
                                              former President/CEO agreed to pay the nonprofit $25,000 for
                                              used office furniture appraised at only $12,175. Although the
                                              Managers were aware of the appraised value, they made the
                                              $25,000 payment, and allocated 90.05 percent of purchase
                                              price to the Low Rent, Drug Elimination, Comprehensive Grant,
                                              Hope VI, and Section 8 Housing Programs. The amount HUD
                                              programs paid in excess of appraised value equals about
                                              $11,549 ($25,000 - $12,175 X .9005).




Our HOPE VI audit 19 recommended HUD require the Authority to implement a comprehensive
procurement policy with procedures to ensure full and open competition, and purchases for eligible
program expenditures. The Authority developed, but did not follow, a procurement policy for the
purchase of disposal services from its affiliate. The Authority’s policy requires compliance with federal
regulations and requirements which: prohibit conflict-of-interest relationships; require full and open
competition; and require costs be reasonable and necessary.

Based on our review of the San Antonio Housing Assistance Corporation’s (SAHAC’s) Audited
Financial Statements for 1998 and the unaudited Financial Statements for 1999, we believe the conflict-

19
     Report No. 99-FW-201-1003, dated January 29, 1999.


00-FW-201-1004                                     Page 12
                                                                                                Finding


of-interest and noncompetitive garbage disposal arrangement resulted in the increase in SAHAC’s
retained earnings at the expense of HUD programs. According to the financial statements, the SAHAC
had retained earnings of $1,145,304 as of June 30, 1998. SAHAC’s retained earnings amounted to
$1,006,163 in 1999 according to the unaudited financial statements. The 1996 audited financial
statements show the amount of SAHAC’s retained earnings was $671,426. So, during fiscal years
1997 through 1999 the SAHAC has shown a net profit of $334,737 without providing services
comparable to services that could be obtained for less from commercial waste disposal companies. All
of SAHAC’s revenue comes from the Authority or its affiliates.

Authority Board members involved in excessive child-care and furniture payments are no longer on the
Authority’s Board. However, while they served on the Authority’s Board, the conflict-of-interest
relationships resulted in Authority managers approving payments to: (1) provide more income to the
former resident Board member than authorized in the child-care contract and (2) relieve the former
Board Chairperson of a possible personal debt in connection with the nonprofit.




   Auditee Comments                    The Authority officials did not agree that a conflict of interest
                                       existed in the waste disposal purchase arrangement between the
                                       Authority and its affiliate, the San Antonio Housing Assistance
                                       Corporation. They said HUD had reviewed and approved the
                                       arrangement. Also, they did not agree the waste disposal fees
                                       were excessive. However, they agreed to reimburse HUD
                                       programs for certain questioned costs.

                                       They agreed that the Authority and the San Antonio Housing
                                       Assistance Corporation have the same management. The same
                                       management is responsible for setting the waste disposal fees
                                       and paying them from federal funds. However, they said,
                                       instead of a conflict of interest, the entities have a common
                                       interest. The Authority formed the San Antonio Housing
                                       Assistance Corporation to provide waste disposal services to
                                       residents who live in housing owned or managed by the
                                       Authority. They said HUD was aware of the arrangement.
                                       They said they had provided HUD a feasibility analysis to
                                       operate its own disposal service in 1981. HUD responded
                                       saying HUD had no disagreement with the basic concept.
                                       Authority officials said they did not violate applicable federal
                                       procurement regulations because they used noncompetitive
                                       negotiations in a situation when adequate competition was
                                       impossible.




                                                Page 13                              00-FW-201-1004
Finding


                 They said the Authority did not pay excessive disposal fees as a
                 result of the noncompetitive negotiations. They said
                 the waste disposal fees charged by the San Antonio Housing
                 Assistance Corporation were less than fees that would be
                 charged if the services were provided by a commercial
                 company. They stated the scope of work provided by the
                 commercial companies under contract during the audit period
                 was less than the scope of services provided by the San
                 Antonio Housing Assistance Corporation. They criticized the
                 auditor for discussing the scope of services with those who
                 performed the services instead of only discussing the matter
                 with management. They also provided a price quoted by one
                 commercial company in July 2000 they believe shows the
                 savings from using the San Antonio Housing Assistance
                 Corporation instead of a commercial company. They
                 maintained that competition to provide the services was still
                 inadequate. The Authority says it requested price quotes from
                 six companies in July 2000 and only received a quote from one.
                 The Authority used the price quote to apply a deflation factor
                 and show the commercial prices would have been higher than
                 the fees of the San Antonio Housing Assistance Corporation
                 during our audit period.

                 At or subsequent to the exit conference, Authority officials
                 agreed to reimburse the HUD programs for costs of the
                 Housing Assistance Corporation’s disposal operations and the
                 incorrectly allocated debris crew costs discussed in the findings
                 as follows:

                 Salary and benefits of disposal crew member     $ 18,682
                 Salary and benefits of debris crew at non-HUD     21,662
                  properties
                 Repair and fuel costs                                 2,953
                 Landfill fees                                      387,629
                 Warehouse utility costs                       6,751
                 Warehouse rent                                      34,439
                 Lost interest                                        10,763
                          Total                                    $482,879

                 At the exit conference, they agreed that the San Antonio
                 Housing Assistance Corporation had retained earnings, before
                 considering the above reimbursements to HUD programs, of



00-FW-201-1004       Page 14
                                                                                Finding


                    over $1,000,000 that had accumulated from the fees since
                    entering into the arrangement in 1981.

                    Subsequent to the exit conference, Authority officials attempted
                    to support the amount of salary and benefits of the General
                    Maintenance Helper we questioned as unsupported. They
                    provided copies of the employee’s daily work schedule. They
                    believed they supported all but $6,107 and proposed to
                    reimburse HUD programs for this amount.

                    They provided several compound journal entries and a copy of
                    a San Antonio Housing Assistance Corporation bank account
                    showing a wire transfer from the account to show they had
                    repaid part of the costs to be reimbursed.

                    Authority officials agreed with the finding related to the conflicts
                    of interest resulting in the excessive payments for child care and
                    furniture. They blamed the problems on the former
                    President/CEO or former chairperson. They stated current
                    management took immediate action when they found out about
                    the problems. In the child care matter, they said they obtained
                    a legal opinion from the State Attorney General and terminated
                    the contract in January 1998. They said they are currently
                    working through their attorney to recover the excessive child
                    care payments and have already reimbursed HUD programs for
                    the excessive furniture costs.




                    Our evaluation of the Authority’s comments did not change our
OIG Evaluation of   position. The Authority’s purchase of waste disposal services
Comments            for federal programs from its affiliated entity involves a conflict
                    of interest because the Authority’s management has conflicting
                    responsibilities for operating both. On one hand the Authority is
                    responsible for ensuring costs are necessary and reasonable for
                    the efficient operation of the federal programs as required by
                    federal cost principles. On the other hand, Authority
                    management also sets the service fees charged by the Housing
                    Assistance Corporation to the programs. As evidenced by the
                    finding, the fees charged to the federal programs exceeded
                    costs and market prices.




                             Page 15                                00-FW-201-1004
Finding


                 HUD did not approve the Authority to charge disposal fees
                 established above its costs. The feasibility study the Authority
                 says it provided HUD in 1981 indicates the Authority was
                 considering operating its own waste disposal service. The study
                 shows costs such as labor, vehicle maintenance, container
                 maintenance, insurance, etc., and shows estimated savings
                 based on estimated costs. There is no indication the Authority
                 or the Housing Assistance Corporation would charge fees that
                 would permit an accumulation of significant profits or retained
                 earnings.

                 Regarding the scope of work, as stated in the finding, there was
                 no formal written contract with the San Antonio Housing
                 Assistance Corporation to show the scope of services it
                 provided. However, we obtained the San Antonio Housing
                 Assistance Corporation’s service schedules and interviewed the
                 people performing the service to determine the scope of
                 services provided. We then compared the scope of services to
                 that provided by commercial contractors under contract during
                 the audit period. We believe our method of determining and
                 comparing the actual scopes of services was effective. The
                 commercial companies provided more service under contract
                 than the Housing Assistance Corporation.

                 We do not agree with the Authority’s conclusion that
                 competition to provide waste disposal service is inadequate.
                 Also, we do not agree with the Authority’s method of
                 attempting to show the cost savings of using San Antonio
                 Housing Assistance disposal service over that of a commercial
                 company. Although the Authority may have solicited price
                 quotes in July 2000 from six companies and only obtained a
                 quote from one company, we believe it was obvious the
                 Authority did not intend to award a contract. The Authority did
                 not publicly solicit bids. Therefore, we believe it is
                 understandable why other disposal companies limited their
                 responses. The scope of services proposed by the company
                 that provided the price quote was not comparable to the
                 services provided during our review period. The quote
                 included providing debris pick-up services not provided by the
                 Housing Assistance Corporation or commercial companies
                 under contract during our review period. The Authority used its
                 own debris crew for picking up debris and paid the crew with
                 federal program funds. Our comparison of actual contract


00-FW-201-1004       Page 16
                                                         Finding


prices in effect during our audit period provides a much better
cost comparison than the price quote provided by the Authority
in response to our finding. Our comparison shows the fees
charged by the Housing Assistance Corporation, in a
noncompetitive situation, were in excess of market prices.

The Authority appeared responsive to our recommendation to
reimburse HUD programs. They agreed to make
reimbursement for Salaries and benefits of the Disposal Crew
member and the Debris Crew working at non-HUD Properties,
for fuel and repair costs, and for landfill fees. However, our
review of employee work schedules provided to support the
salaries and benefits of the general maintenance helper did not
convince us that we should lessen the amount of costs
questioned for this employee. The employee’s work schedules
were not specific as to whether the employee was working on
the disposal crew or the debris pick-up crew. Also, the work
schedules provided did not account for the entire time period
questioned. Therefore, we are still questioning $54,717 as
unsupported costs charged to the Low Rent Program.

We did a cursory examination of the compound journal entries
and the copy of a San Antonio Housing Assistance
Corporation bank account they provided to show they had
repaid part of the costs to be reimbursed. However, from the
information provided, we could not readily determine whether
the HUD programs received the reimbursement.

The Authority calculated the amounts it should reimburse HUD
programs for warehouse utility costs, warehouse rent, and lost
interest. We did not review these calculations but believe it
appropriate to recommend HUD to review them to determine
whether the amounts are acceptable.

The Authority appeared responsive to our recommendations
related to the conflicts of interest involved in the excessive
payments for child care and the furniture purchase. Based on
documentation provided, we agree the former CEO and former
Board members may have had more knowledge of the
transactions when they occurred than the current management.
Therefore, we have made minor changes to our draft finding for
additional clarification. However, the Authority did not provide



        Page 17                              00-FW-201-1004
Finding


                     us evidence to show actual reimbursements to HUD programs.
                     Therefore, HUD needs to ensure appropriate reimbursement.




                     We recommend HUD require the Authority to:
   Recommendations
                     1A. Implement control procedures to ensure the costs of
                         affiliate-related activities are not charged to HUD
                         programs and to avoid procurement transactions that may
                         involve favoritism or a conflict of interest without
                         appropriate waivers from HUD.

                     1B. Follow its own procurement policy in compliance with
                         HUD regulations and require the affiliate to compete for
                         all future disposal service work while ensuring that all
                         competitors compete for the same and comparable scope
                         of work.

                     1C. If the affiliate can provide comparable disposal services
                         for fees competitive with commercial rates, obtain a
                         written, conflict-of-interest waiver from HUD before
                         continuing payments to the affiliate for disposal services.

                     1D. Repay HUD properties from non-federal funds for: (1)
                         excessive disposal service fees of about $336,865;
                         (2) salaries and benefits expenses of a disposal service
                             employee totaling $18,682; (3) salaries and benefits
                             expenses for debris crew employees working at non-
                             HUD properties totaling $21,662; (4) repair and fuel
                             costs for debris crew work performed at non-HUD
                             properties totaling $2,953; and (5) landfill fees
                             estimated to be about $387,629, or determine and
                             repay actual landfill fees allocated to HUD properties
                             related to the affiliate’s disposal service operation.

                     1E. Determine and repay HUD Low Rent accounts any
                         excessive disposal service and landfill fees related to the
                         affiliate’s disposal service operation charged to the Low
                         Rent Program since June 30, 1999.

                     1F. Either satisfactorily demonstrate and support the
                         reasonableness of $54,717 charged to HUD program


00-FW-201-1004           Page 18
                                                             Finding


      accounts for the costs of the general maintenance helper’s
      salary and benefits or repay Low Rent accounts from
      non-federal funds.

1G. Determine and repay Low Rent accounts from non-
    federal funds the affiliate’s share of utility costs at the
    Brazos and Tampico warehouses.

1H. Determine and repay Low Rent accounts from non-
    federal funds a reasonable rental rate for the Tampico
    warehouse space utilized by the affiliate for its disposal
    service activities since January 1998.

1I.   Determine and repay Low Rent accounts from non-
      federal funds a reasonable amount for lost interest
      revenue on the purchase price ($10,760) of the 1-ton
      container-lift truck for the 14-year period ending March
      20, 2000.

1J.   Repay $31,352 in excessive child-care contract fees to
      Springview Apartments ( a HUD property) using non-
      federal funds.

1K. Repay to HUD programs from non-federal funds
    $11,549 in excessive costs related to the furniture
    purchase.

1L. We also recommend HUD consider taking administrative
    sanctions against those officers and Commissioners of the
    Authority involved in decisions where conflicts of interest
    existed.




         Page 19                                 00-FW-201-1004
Finding




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00-FW-201-1004    Page 20
Management Controls
In planning and performing our audit, we obtained an understanding of management controls
relevant to the audit objectives. Management is responsible for establishing effective
management controls, and in the broadest sense, these include a plan of organization,
methods, and procedures to ensure management goals are met. Management controls include
the process for planning, organizing, directing, and controlling program operations. They
include the systems for measuring, reporting, and monitoring program performance.




   Significant Controls           We determined the following control categories were relevant
                                  to our audit objectives:

                                      Procurement & Purchasing
                                      Costs allocation & eligibility

                                  We assessed these relevant control categories to the extent they
                                  impacted our audit objectives.

                                  A significant weakness exists if management controls do not
   Significant Weaknesses         give reasonable assurance that resource use is consistent with
                                  laws, regulations, and policies; that resources are safeguarded
                                  against waste, loss, and misuse; and that reliable data are
                                  obtained, maintained, and fairly disclosed in reports. Based our
                                  review, we believe the following items are significant
                                  weaknesses:

                                      Authority managers did not follow established procurement
                                      policy and purchasing procedures (finding).

                                      Managers charged ineligible and unsupported costs to HUD
                                      programs (finding).




                                           Page 21                             00-FW-201-1004
Management Controls




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00-FW-201-1004         Page 22
Follow Up on Prior Audits
An Office of Inspector General audit report (No. 99-FW-201-1003, dated January 29, 1999) on the
Authority’s HOPE VI grants included one finding with recommendations relevant to our audit
objectives. Finding 1 of the report concluded the Authority did not comply with federal procurement
regulations and operated without a comprehensive procurement policy and recommended the Authority:

        (1) develop a comprehensive procurement policy and contract administration system and
        (2) take steps to ensure: full and open competition; documentation supports procurement
            transactions; and purchases are only for eligible expenditures.

Authority managers partially addressed these recommendations by developing a procurement policy and
purchasing procedures. However, as discussed more fully in the findings, Authority managers did not
follow the procurement policy or purchasing procedures causing HUD programs to pay ineligible costs.




                                               Page 23                            00-FW-201-1004
Follow Up on Prior Audits




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00-FW-201-1004               Page 24
                                                                                                                       Appendix A

Schedule of Questioned Costs

                                                                                   Type of Questioned Costs
           Issue                                                                   Ineligible 1/ Unsupported 2/

1D. (1) Excessive Disposal Fees                                                    $336,865
        Salaries and Benefits
        (2) disposal crew                                                              18,682
        (3) debris crew                                                                21,662
    (4) Repairs & fuel for the
        debris crew                                                                     2,953
    (5) Landfill Fees                                                                 387,629

1F. Maintenance Helper’s                                                                                  $54,717
     salaries and benefits

1J. Child-care contract,                                                               31,352
      excessive fees

1K. Furniture purchase                                                                 11,549

           Totals                                                                  $810,692               $54,717




1
    Ineligible costs are costs charged to a HUD-financed or insured program or activity that the auditor believes are
    not allowable by law, contract, or federal, state, or local policies or regulations.
2
    Unsupported costs are costs questioned by the auditor because the eligibility cannot be determin               ed at the time of
    audit. The costs are not supported by adequate documentation or there is a need for a legal or administrative
    determination on the eligibility of the costs. Unsupported costs require a future decision by HUD program
    officials. This decision, in addition to obtaining supporting documentation, might involve a legal interpretation or
    clarification of Departmental policies and procedures         .




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                               Appendix B

Auditee Comments




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                Appendix B




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00-FW-201-1004    Page 46
                                                                                      Appendix C

Distribution
Secretary's Representative, 6AS
Comptroller, 6AF
Director, Accounting, 6AAF
Director, Office of Public Housing, 6JPH (4)
Saul N. Ramirez, Jr., Deputy Secretary, SD (Room 10100)
Kevin Simpson, Deputy General Counsel, CB (Room 10214)
Jon Cowan, Chief of Staff, S (Room 10000)
B. J. Thornberry, Special Asst. to the Deputy Secretary for Project Management, SD (Rm 10100)
Joseph Smith, Acting Assistant Secretary for Administration, A (Room 10110)
Hal C. DeCell III, A/S for Congressional and Intergovernmental Relations, J (Room 10120)
Ginny Terzano, Sr. Advisor to the Secretary, Office of Public Affairs, S (Room 10132)
Roger Chiang, Director of Scheduling and Advance, AL (Room 10158)
Howard Glaser, Counselor to the Secretary, S (Room 10218)
Rhoda Glickman, Deputy Chief of Staff, S (Room 10226)
Todd Howe, Deputy Chief of Staff for Operations, S (Room 10226)
Jacquie Lawing, Deputy Chief of Staff for Programs & Policy, S (Room 10226)
Patricia Enright, Deputy A/S for Public Affairs, W (Room 10222)
Joseph Hacala, Special Asst for Inter-Faith Community Outreach, S (Room 10222)
Marcella Belt, Executive Officer for Admin Operations and Management, S (Room 10220)
Karen Hinton, Sr. Advisor to the Secretary for Pine Ridge Project (Room 10216)
Gail W. Laster, General Counsel, C (Room 10214)
Armando Falcon, Office of Federal Housing Enterprise Oversight (Room 9100)
William Apgar, Assistant Secretary for Housing/FHA, H (Room 9100)
Susan Wachter, Office of Policy Development and Research (Room 8100)
Cardell Cooper, Assistant Secretary for CPD, D (Room 7100)
George S. Anderson, Office of Ginnie Mae, T (Room 6100)
Eva Plaza, Assistant Secretary for FHEO, E (Room 5100)
V. Stephen Carberry, Chief Procurement Officer, N (Room 5184)
Harold Lucas, Assistant Secretary for Public & Indian Housing, P (Room 4100)
Gloria R. Parker, Chief Information Officer, Q (Room 8206, L’Enfant Plaza)
Frank L. Davis, Director, Office of Dept Operations and Coordination, I (Room 2124)
Office of the Chief Financial Officer, F (Room 2202)
Edward Kraus, Director, Enforcement Center, V, 200 Portals Bldg., Wash. D.C. 20024
Donald J. LaVoy, Acting Director, REAC, X, 800 Portals Bldg., Wash. D.C. 20024
Ira Peppercorn, Director, Office of MF Asst Restructuring, Y, 4000 Portals Bldg., D.C. 20024
Mary Madden, Assistant Deputy Secretary for Field Policy & Mgmt, SDF (Room 7108) (2)
Deputy Chief Financial Officer for Operations, FF (Room 2202)
David Gibbons, Director, Office of Budget, FO (Room 3270)
FTW ALO, 6AF (2)
Public Housing ALO, PF (Room 8202) (2)
Dept. ALO, FM (Room 2206) (2)



                                                  Page 47                           00-FW-201-1004
Appendix C



                                  DISTRIBUTION (Cont’d)

Acquisitions Librarian, Library, AS (Room 8141)
Director, Hsg. & Comm. Devel. Issues, US GAO, 441 G St. NW, Room 2474
      Washington, DC 20548 Attn: Judy England-Joseph
Henry A. Waxman, Ranking Member, Committee on Govt Reform,
      House of Rep., Washington, D.C. 20515
The Honorable Fred Thompson, Chairman, Committee on Govt Affairs,
      U.S. Senate, Washington, D.C. 20510
The Honorable Joseph Lieberman, Ranking Member, Committee on Govt Affairs,
      U.S. Senate, Washington, D.C. 20510
Cindy Fogleman, Subcomm. on Gen. Oversight & Invest., Room 212,
      O'Neill House Ofc. Bldg., Washington, D.C. 20515
The Honorable Dan Burton, Chairman, Committee on Govt Reform,
      House of Representatives, Washington, D.C. 20515
Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, Drug Policy & Human
      Resources, B373 Rayburn House Ofc. Bldg., Washington, D.C. 20515
Steve Redburn, Chief, Housing Branch, Office of Management and Budget
      725 17th Street, NW, Room 9226, New Exec. Ofc. Bldg., Washington, D.C. 20503
Inspector General, G
San Antonio Housing Authority
SAHA Board Chairperson
Mayor, City of San Antonio
State Auditor of Texas




00-FW-201-1004                           Page 48