oversight

Atlantic City HA, Low Rent Housing Program, Atlantic City, New Jersey

Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-03-24.

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

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                                  U. S. Department of Housing and Urban Development
                                             Office of Inspector General
                                            26 Federal Plaza, Room 3430
                                             New York, NY 10278 0068



March 24, 2000                                                     Audit Memorandum
                                                                   No. 00-NY-209-1801


MEMORANDUM FOR: Carmen Valenti, Director, Office of Public Housing, 2FPH


FROM: Alexander C. Malloy, District Inspector General for Audit, 2AGA

SUBJECT:      Atlantic City Housing Authority
              Low Rent Housing Program
              Atlantic City, New Jersey

In response to a request received by the New Jersey State Office (NJSO) of the Department of
Housing and Urban Development (HUD), we performed a limited review at the Atlantic City
Housing Authority (ACHA). The review was conducted to determine the validity of complaints
made regarding the ACHA’s personnel practices and procedures. Specifically, the complaints allege
that: (1) the Executive Director improperly participated in a sick leave buyout plan for ACHA
employees without appropriate disclosure to the Board of Commissioners; and, (2) the Executive
Director and the Head Project Maintenance Superintendent improperly accrued compensatory time.
The review covered the period from April 1, 1996 through March 31, 1998, and the onsite work
was performed between March and December 1999.

To accomplish our objective, we reviewed and relied upon: ACHA’s personnel files, accounting
records, and administrative policies and records; interviews with ACHA officials and staff;
documentation provided by the HUD NJSO; and Federal, State and local government regulations,
statutes and policies. In addition, we reviewed the actions taken by the ACHA Board of
Commissioners as part of their ultimate responsibility for ACHA operations. We reviewed
documentation from periods prior and subsequent to our review period, as deemed necessary.


                                         SUMMARY

We performed a limited review of the ACHA’s operations to determine the validity of complaints
made regarding the ACHA’s personnel practices and procedures. Specifically, the complaints allege
that: (1) the Executive Director improperly participated in a sick leave buyout plan for ACHA
employees without appropriate disclosure to the Board of Commissioners; and, (2) the Executive
Director and the Head Project Maintenance Superintendent improperly accrued compensatory time.

The results of our review disclosed that the first complaint does not have merit because the
ACHA Board of Commissioners (Board) were made aware of the proposed one time sick leave

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buyout plan as well as the individuals who were to participate in the buyout plan (including the
Executive Director) on several occasions. However, although appropriate disclosures were made
to the ACHA Board, we concluded that the buyout of accrued sick leave was unnecessary and
unreasonable since it is not comparable to the practices of other public entities in the local labor
market, as required by Attachment B, Section 11(b) of OMB Circular A-87 (See Finding 1).
Therefore, we consider the total cost of the sick leave buyout, which amounted to $532,964.42,
to be ineligible. Accordingly, we recommend that the ACHA be required to repay these funds to
the Low Rent Housing (LRH) program from non-Federal funds.

In conjunction with the above, we also concluded that the Board exercised poor judgment when
it amended the personnel policy of the ACHA to allow for: (a) the trading of sick leave for
annual leave; and (b) the payment of one third of an employee’s sick leave balance upon
resignation in good standing or deferred retirement. Based on inquiries at other local public
entities, we determined that such benefits are not offered to other employees performing similar
work in the local public labor market. Thus, they should not be incorporated in the ACHA’s
personnel policy, inasmuch as, benefits provided in its policy are to be comparable to those in
policies of other public entities in the local labor market. In this regard, we recommend that such
benefits be removed from ACHA’s personnel policy and that procedures be developed to
prevent amendments pertaining to compensation for accrued sick leave from occurring in the
future without prior approval from HUD. We further recommend that the HUD NJSO consider
sanctioning the Board for approving the sick leave buyout plan and amendments to the ACHA’s
personnel policy that allow employees to receive questionable compensation for accrued sick
leave.

The second complaint has merit because, contrary to Section 404 of the ACHA’s personnel
policy and Federal regulations regarding reasonableness (OMB Circular A-87, Attachment B
Section 11(b)), the ACHA Executive Director had 951 hours of compensatory time, which
related to prior years, recorded in his payroll records. In addition, both the Executive Director
and the Head Project Maintenance Superintendent were allowed to accrue compensatory time
beyond the ACHA’s requirement that the time be used within 60 days (See Finding 2).
Consequently, upon their retirement the ACHA will incur unnecessary costs. As a result, we
recommend that the ACHA be required to evaluate the terms of its compensatory time policy to
ensure that it is reasonable and similar to those of other public entities in the local labor market.
Additionally, the Executive Director and the Head Project Maintenance Superintendent should
not be allowed to use or be paid for their accrued compensatory time until it is evaluated and
found to have been accrued in accordance with ACHA requirements. Procedures should also be
developed to ensure that established personnel policies are followed when accruing
compensatory time.

Furthermore, our review disclosed that the ACHA’s personnel policy is not in accordance with
New Jersey State Civil Service Statutes (N.J.S.A. 11A: 6-3(e)) regarding accumulating annual
leave. Under the HUD Consolidated Annual Contributions Contract (ACC), Part A, Section
14(A), the ACHA is required to comply with all tribal, State and Federal laws applicable to
employee benefit plans and other conditions of employment. Our review disclosed that the
ACHA’s personnel policy does not properly impose the two-year limitation on accumulating
annual leave as required by the State of New Jersey Civil Service Statutes. As a result, both the
Executive Director and the Head Project Maintenance Superintendent accumulated vacation
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balances (annual leave) above and beyond statutory requirements. Accordingly, we believe that
the ACHA should amend its personnel policy regarding vacation leave so that it is in compliance
with State Civil Service Statutes. A system should also be implemented by ACHA whereby
mandatory vacations are scheduled more effectively.


                                        BACKGROUND

The Atlantic City Housing Authority (ACHA) was created through a resolution of the City of
Atlantic City, New Jersey. It was organized as a public housing authority as defined by State
Statute N.J.S.A.40A: 12A-1, et seq. (the Housing Authority Act), to provide housing for eligible
low and moderate-income families. The ACHA functions under the supervision of HUD and the
N. J. Department of Community Affairs (DCA). It is governed by a Board of Commissioners
consisting of seven members; five are appointed by the City Council, one member is appointed
by the Mayor and one member is appointed by the Governor. The Board of Commissioners are
ultimately responsible for ensuring that the ACHA complies with Federal, State and Local
regulations and policies. The Executive Director is responsible for carrying out the day to day
activities and the general administration and management of the ACHA.

With a staff of about 150 employees, the ACHA administers 2,413 units as follows:

       Program                            Contract No.             Units Authorized
       Low-Income Housing                 NY- 401                   1,624 units

       Section 8 Certificates
        and Vouchers                      NY-1266                     636 units

       Section 8 - Housing Assistance
       Payment (HAP) Administrator        NY 79-518                   153 units

The Annual Contributions Contract (ACC) Part A Section 14(A) requires the ACHA to comply
with all tribal, State and Federal laws applicable to employee benefit plans and other conditions
of employment.

Title 24 of the Code of Federal Regulations (CFR), Part 85 Section 85.22(b) requires Public
Housing Authorities to follow Office of Management and Budget (OMB) Circular A-87, Cost
Principles for State, Local and Indian Tribal Governments. Attachment A, Paragraph C.1.(a) of
OMB Circular A-87 provides that costs must be necessary and reasonable in order to be charged
to a program. Additionally, Attachment B, Section 11(b) of OMB Circular A-87 provides that
compensation for personnel services should be “reasonable to the extent that it is comparable to
that paid for similar work in the labor market in which the employing government competes for
the kind of employees involved.” Section 11(a) of OMB Circular A-87, Attachment A provides
that compensation for personnel services includes all remuneration, paid or accrued, for services
rendered during the period of performance under Federal awards, including but not necessarily
limited to wages, salaries, and fringe benefits.


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Within 60 days, please furnish this office, for each recommendation cited in this memorandum 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 not considered necessary. Also, please furnish us copies of
any correspondence or directives issued related to this audit.

If you have any questions, please contact Edgar Moore, Assistant District Inspector General for
Audit at (212) 264-8000, extension 3976.


Attachments

A-     Auditee Comments
B-     Distribution




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                                    RESULTS OF REVIEW

COMPLAINT 1

The ACHA Executive Director Improperly Participated In A Sick Leave Buyout Plan For
ACHA Employees Without Appropriate Disclosure To The Board of Commissioners.


EVALUATION OF COMPLAINT 1

Our review revealed that this complaint does not have merit because the ACHA’s Board of
Commissioners (Board) were made aware of the proposed one time sick leave buyout plan as
well as the individuals who were to participate (including the Executive Director) on several
occasions. Although the appropriate disclosures were made to the ACHA Board, we believe that
the buyout of accrued sick leave was not a prudent management decision (See Finding 1 below).

Finding 1

The ACHA Instituted A Sick Leave Buyout Plan Which Was Not Comparable To Plans of
Other Public Entities In The Local Labor Market

The review revealed that disclosures were made to the Board of Commissioners, and that with
the approval of the Board, ACHA officials instituted a sick leave buyout plan that was not
comparable to those of other public entities in the local labor market, as required by OMB
Circular A-87, Attachment B Section 11(b). Therefore, we consider the total cost of the sick
leave buyout, which amounted to $532,964.42, to be ineligible. Accordingly, this amount should
be reimbursed to the Low Rent Housing (LRH) program from non-Federal funds. In addition, we
concluded that the Board exercised poor judgment when it amended the personnel policy of the
ACHA to allow for: (a) the trading of sick leave for annual leave; and (b) the payment of one
third of an employee’s sick leave balance upon resignation in good standing or deferred
retirement. In this regard, ACHA officials were unable to provide us with adequate evidence
showing that they compared the ACHA’s sick leave buyout plan and other policies pertaining to
compensation for accrued sick leave to policies of other public entities in the local labor market.
Moreover, our inquiries at other local public entities did not disclose similar personnel policies
and/or a sick leave buyout plan. Consequently, we believe that the ACHA’s personnel policy
should be amended to the extent that it is comparable to those of other public entities in the local
labor market. Also, procedures should be developed to prevent amendments pertaining to
compensation for accrued sick leave from occurring in the future without obtaining HUD’s
approval. Furthermore, we recommend that the HUD NJSO consider sanctioning the Board for
approving the sick leave buyout plan and other questionable personnel policy changes discussed
below.




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Policy Changes Disclosed To Board

We noted that as far back as November 1991, recommendations were made by ACHA officials to
change ACHA’s personnel policy in order to benefit employees with 500 hours or more of
accumulated sick leave. Their thinking was that conscientious employees should be rewarded for
not using all of their leave time. At the time, if employees, who did not use their sick leave,
were terminated or resigned from employment before their normal retirement age, they would not
receive any compensation for accumulated sick leave. In this regard, the following events
occurred:

•   In May 1992 a recommendation was made whereby employees would be allowed to trade 2
    sick leave hours for 1 annual leave hour after reaching 500 hours

•   On August 29, 1996 a memorandum was issued to the Board recommending more changes to
    the personnel policy. According to this memorandum, the following three recommendations
    were suggested:

       1. Upon normal retirement, the maximum amount payable in compensation be increased
          to $20,000;

       2. Upon resignation in good standing or deferred retirement, compensation be made for
          one third of accumulated sick leave; and

       3. Any employee with at least 200 hours of accumulated sick leave be permitted,
          once a year, to trade two hours sick leave for one hour of annual leave for all
          hours in excess of 200 hours.

•   On February 6, 1997, a memorandum was sent to the ACHA’s Personnel Committee, which
    is comprised of the Board Chairman and five ACHA staff members, suggesting that the three
    changes be made along with an attachment detailing the total value of the proposed sick leave
    buyout plan. The Personnel Committee accepted the proposed changes by way of vote on
    April 14, 1997.

•   On August 28, 1997, the Board passed a resolution amending the personnel policy and
    initiated the one-time buyout of accumulated sick leave in excess of 200 hours for all
    employees as of August 31, 1997. Again, attached to the resolution was a listing of buyout
    participants. The resolution was moved by the Board Chairman and was unanimously
    approved by the Board.

•   On October 30, 1997, the Board passed a resolution approving Operating Budget Revision
    No. 1. The budget revision, which contained the funds for the sick leave buyout plan,
    reflected the buyout costs, including the names of participants and their applicable amounts.
    The Board unanimously approved the resolution.

•   On November 5, 1997, Revision No. 1 to ACHA’s Operating Budget for Fiscal Year Ending
    March 31, 1998, along with a revised operating subsidy calculation was sent to the HUD
    NJSO for review and approval. Fully aware that HUD is not required to approve budgets, the
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    ACHA Executive Director requested a review and an approval by HUD of the buyout plan
    and the changes in wages and compensation as reflected in the budget.

•   On December 1, 1997, HUD responded to ACHA by advising that the request was not
    reviewed and that compliance with applicable New Jersey Civil Service law should be
    ensured by way of legal opinion.

ACHA officials then obtained two separate legal opinions which revealed that there is no statute
under New Jersey State law which prohibits the buying back of unused sick leave. Additionally,
one legal opinion duly noted that nothing under New Jersey State law requires employees to be
paid for excess sick days. Soon after, on February 26, 1998, the sick leave buyout was
implemented and a total of $532,964.42 was paid to 47 ACHA employees.

The complainant alleged that although the Executive Director submitted the proposed changes
and the list of participants to the Board; the Board was not fully alerted that the Executive
Director was going to significantly benefit from the policy changes. The Executive Director
received over $107,000 as a result of these personnel policy changes. Our analysis of the
document showing the names of the 47 participants revealed that the Executive Director’s name
was included on the list. We believe that the members of the Board have the ultimate
responsibility to adequately review and approve policy changes, therefore, they should have
thoroughly reviewed the policy changes and the list of participants. Consequently, it is our
opinion that the claim that the Executive Director improperly participated in the sick leave
buyout without appropriate disclosures being made to the Board is without merit.

The Sick Leave Buyout Plan And Personnel Policy Changes Are Unreasonable

The ACHA did not provide adequate documentation to show that the sick leave buyout plan, and
personnel policy changes were comparable to the practices of other public entities in the local
labor market. Accordingly, we concluded that the sick leave buyout plan and the personnel policy
changes were unreasonable and unnecessary. Additionally, the sick leave buyout plan
circumvents established ACHA personnel procedures which caused excessive charges, totaling
$532,964.42, to be made to the LRH program.

The Code of Federal Regulations (CFR) Part 85, Section 85.22(b) of Title 24, requires Public
Housing Authorities to follow Office of Management and Budget (OMB) Circular A-87. OMB
Circular A-87, Attachment B Section 11(b) provides that compensation for personnel services
will be considered reasonable “...to the extent that it is comparable to that paid for similar work
in the labor market in which the employing government competes for the kind of employees
involved.” During our review, we were not provided with any evidence that ACHA officials
compared the sick leave buyout and the personnel policy changes to policies of other public
entities in the local labor market. Additionally, our inquiries at other local public entities did not
reveal similar personnel policies and/or sick leave buyout plans. We found that the only time
other public entities paid for sick leave was upon retirement.

Furthermore, we found that not only is the sick leave buyout plan not comparable to the practices
of other public entities in the local labor market, the plan also circumvented established ACHA
personnel policies. We were advised by an ACHA official that the one time buyout helped
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employees who did not necessarily retire but left for other employment. Section 504 of the
ACHA personnel policy provides that upon retirement, an employee can receive up to a
maximum of $20,000 for accumulated unused sick leave. However, it should be noted that as of
July 1999, only 2 out of the 47 participants in the sick leave buyout had retired and none of the
remaining 45 participants have resigned or been fired. Furthermore, we do not believe that it is a
prudent business practice to reward employees who terminate employment with the agency prior
to their retirement.

Section 503 of the ACHA’s personnel policy defines sick leave as “an absence of an employee
because of illness, exposure to contagious disease, attendance to a member of his/her immediate
family who is seriously ill and requires the care of the employee.” We believe that sick leave is
not earned leave, it is a benefit and a condition of employment. It is not based on actual
additional hours worked as is compensatory time or overtime. As such, we believe that
employees who save their sick leave should only receive compensation upon retirement in a
manner similar to that of State Civil Service law (NJSA 11A: 6-19), which limits compensation
to $15,000 maximum.

Accordingly, we believe that the buyout of accumulated sick leave was an uneconomical use of
housing authority funds, and has resulted in unnecessary and unreasonable charges to ACHA’s
LRH Program. In addition, we believe that the Board of Commissioners exercised poor
judgment when it amended the ACHA’s personnel policy to allow for: (a) the trading of sick
leave for annual leave; and (b) the payment of one third of an employee’s sick leave balance
upon resignation in good standing or deferred retirement. Therefore, we recommend that the
NJSO require the ACHA to repay the $532,964.42 cost of the sick leave buyout plan to the LRH
program from Non-Federal funds. The ACHA should also be instructed to amend its personnel
policy to the extent that it is similar to those of other public entities in the local labor market and
with State Civil Service laws. In addition, the HUD NJSO should consider sanctioning the
ACHA Board for approving the sick leave buyout plan and the other questionable personnel
policy changes discussed in this finding.

AUDITEE COMMENTS

The auditee provided detailed comments regarding the findings, which are included in its entirety
as Appendix A to this report. Generally the auditee disagreed with the finding, and objects to
including the sick leave buyout issue as a finding since Complaint 1 was found to be without
merit. According to the Auditee Comments, the draft finding fails to provide particular
regulations, policies or laws allegedly violated by ACHA. The comments contend that the draft
finding merely makes reference to general provisions of the regulations, New Jersey State
Statutes, and a HUD-OIG Bulletin. The Auditee Comments state that the ACHA was not
provided with a fair opportunity to influence the presentation of the issues. The comments
further provide that both the ACHA’s general counsel and its labor counsel found that there
were no statutes or court opinions that prohibited the payment of sick leave under New Jersey
Law. Also, the comments provide that the statute used in the finding, N.J.S.A. 11A: 6-19, does
not apply to the present plan; and that the State statutes cited relate to payments upon retirement
and apply solely to State employees, of which ACHA employees are not.


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Additionally, the Auditee Comments provide that IG staff totally discounted and improperly
ignored the documentation submitted by ACHA; and that the ACHA’s sick leave buyout plan is
consistent with similar employee benefit plans maintained elsewhere. In this regard, the
comments state “For example the City of Atlantic City recently approved payments to 34
employees in amounts exceeding $20,000 and averaging $73,903.00”. According to the Auditee
Comments, the draft finding cites no examples contradicting the documentation submitted by the
ACHA, and misrepresents and misquotes OMB Circular A-87 and ACHA’s                  personnel
policies. Additionally, the comments state that the sick leave buyout should be comparable to
local public practice and it misquotes ACHA’s definition of sick leave.


OIG EVALUATION OF AUDITEE COMMENTS

OIG’s position is unchanged. Our review was conducted in accordance with Generally Accepted
Governmental Auditing Standards (GAGAS) which require us to use due professional care in the
performance of reviews. GAGAS requires us to provide reasonable assurance that material
instances of possible noncompliance are reported. As a result, we developed Finding 1. The
ACHA was provided with every opportunity to influence the presentation of the issues during the
review and at the exit conference. On November 15, 1999 the auditee was provided with the draft
findings. Although the drafts did not include the detailed finding criteria, the specifics were
provided to the Board Counsel in its entirety during the exit conference. Furthermore, the
findings have now been revised and contain the specific criteria and regulations violated. The
auditee was also given an additional 3 weeks to submit their written response.

We were unable to find any New Jersey statutes that prohibit the payment of accumulated sick
leave prior to retirement; however, we also did not find a State law which require employees to
be paid for such accumulated leave. ACHA’s labor counsel stated that the statute (NJSA 11A:6-
19) is not applicable because it relates to payments upon retirement. However, the labor counsel
also advised that this statute should be used as guidance, limiting the amounts paid. ACHA’s
desire to cut down on the use of sick leave by employees is understandable; nevertheless, we
believe that making it another form of compensation prior to retirement is not a proper nor
prudent method to follow.        The above statute refers to supplemental compensation upon
retirement and applies to both State and political subdivision employees. All ACHA employees
are appointed under Civil Service classifications, with the exception of the unclassified positions
(e.g. Executive Director, Assistant Executive Director, and Directors of Staff Operations,
Administration, and Redevelopment & Urban Initiatives). Therefore, according to State statute
descriptions, ACHA’s employees in unclassified positions would be considered political
subdivision employees. As such, we believe the New Jersey statutes quoted are applicable.
Thus, the ACHA can not circumvent the legislative limit on supplemental compensation unless
approved by HUD. Accordingly, we reiterate that ACHA employees should only receive
compensation for accumulated sick leave upon retirement, in accordance with New Jersey State
law, which limits compensation to $15,000 maximum.

OIG staff did not discount or ignore any ACHA documentation. The ACHA did not present any
documentation supporting that the sick leave buyout and other personnel policy changes were
comparable to the practices offered by other public entities in the local labor market.
Additionally, the ACHA did not provide sufficient evidence to justify the reasonableness of the
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cost of the sick leave buyout. We noted that other public entities only bought back accumulated
sick leave at the time of an employee’s retirement. Also, the examples mentioned in the
Auditee Comments could not be evaluated because the ACHA did not provide the employee
positions or titles and whether payment was made upon retirement or not. The fact that the City
paid some employees in excess of the $15,000 state limit upon retirement cannot clearly be
considered since there is no evidence as to whether these employees were Police or Fire
personnel. Vacation and sick leave for City Police and Fire personnel are established by local
ordinance. Nonetheless, ACHA does not have any positions similar to the City Police or Fire
departments uniform personnel, as a result, the above examples cited by the auditee are not
comparable.

In addition, we did not misrepresent or misquote OMB Circular A-87 and ACHA’s personnel
policies. As stated above, we have revised the finding and included the specific wording of OMB
Circular A-87. Also, we used quotation marks when citing various ACHA personnel policies.
The phrase “local public practice”, which was objected to, has been replaced with the phrase
“local labor market”. Since ACHA is a public entity receiving Federal funding, we believe that it
is reasonable to compare their policies to the policies of other public entities in the local labor
market. Accordingly, OIGs position regarding the comparability and reasonableness of the sick
leave buyout plan and other personnel policies pertaining to compensation for sick leave is still
the same.

RECOMMENDATIONS

We recommend that the HUD NJSO:

     1A. Require the ACHA to repay, from non-Federal funds, the $532,964.42 cost of the sick
         leave buyout plan, which was charged to the LRH Program.

     1B. Instruct the ACHA to amend its personnel policy to be similar to the practices of other
         public entities in the local labor market and/or with New Jersey State Civil Service
         Laws. Specifically, they should eliminate the provisions which allow for: (a) the
         trading of sick leave for annual leave; and (b) the payment of one third of an
         employee’s sick leave balance upon resignation, or deferred retirement; unless HUD
         gives approval for such changes. Also procedures should be developed to prevent
         future buyouts of unused sick leave without HUD approval.

     1C. Review the ACHA policy changes, as recommended above, to ensure that they comply
         with all local, State and Federal requirements and regulations.

     1D. Consider whether or not to take action against the Board of Commissioners for
         authorizing the sick leave buyout plan and other personnel policy changes pertaining to
         compensation for accrued sick leave.




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COMPLAINT 2

The ACHA Executive Director and the Head Project Maintenance Superintendent
Improperly Accrued Compensatory Time.

EVALUATION OF COMPLAINT 2

Our review revealed that this complaint has merit because the ACHA Executive Director had 951
hours of compensatory time, which related to prior years, recorded on his payroll records.
Additionally, both the Executive Director and the Head Project Maintenance Superintendent
were allowed to accrue compensatory time contrary to established ACHA procedures, and
Federal regulations regarding reasonableness (See Finding 2 Below).

Finding 2

Contrary To ACHA Personnel Policies The Executive Director And The Head Project
Maintenance Superintendent Improperly Accrued Compensatory Time.

The review revealed that the Executive Director and the Head Project Maintenance
Superintendent accrued compensatory time contrary to Section 404 of the ACHA personnel
policy and Federal regulations regarding reasonableness (OMB Circular A 87, Attachment B
Section 11(b)). Specifically, the Executive Director had 951 hours of compensatory time, which
related to prior years, recorded on his payroll records. In addition, the Executive Director and the
Head Project Maintenance Superintendent were allowed to accrue compensatory time beyond the
ACHA’s requirement that the time be used within 60 days. As a result, upon retirement of these
employees, the ACHA stands to incur unnecessary costs. We attribute these improper accruals to
the ACHA’s failure to follow Federal regulations and ACHA requirements and procedures.
Specifically, Federal regulations require compensation for personnel services to be comparable to
that paid for similar work in the labor market in which the employing government competes for
the kind of employees involved. Moreover, ACHA requirements require that compensatory time
should be used within 60 days. Therefore, we recommend that the ACHA be required to
evaluate the terms of their personnel policy, relating to compensatory time, to ensure that it is
similar to the practices of other public entities in the local labor market and used within the
timeframe specified in its policy. Additionally, the Executive Director and the Head Project
Maintenance Superintendent should not be allowed to use or be paid for their accrued
compensatory time until it is evaluated and found to have been accrued in accordance with
ACHA requirements. Also, procedures should be developed to ensure that established policies
are followed when accruing compensatory time.

The Code of Federal Regulations (CFR) Part 85, Section 85. 22(b) of Title 24, requires Public
Housing Authorities to follow Office of Management and Budget (OMB) Circular A-87.
Paragraph C.1.(a) of Attachment A of OMB Circular A-87 provides that costs must be necessary
and reasonable in order to be allowable charges to a program. Attachment B, Section 11(b) of
OMB Circular A-87 provides that compensation for personnel services should be reasonable to
the extent that it is comparable to that paid for similar work in the labor market in which the
employing government competes for the kind of employees involved. Accordingly, since the

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ACHA is a public entity we believe its policies should be compared with the practices of other
public entities in the local labor market.

Policy Not Comparable To The Local Labor Market

Our review revealed that the contract executed between ACHA and the Executive Director
provides that the Executive Director “...shall enjoy any and all benefits and privileges that shall
be established by the Authority...” . Also the Executive Director “...shall be entitled,
additionally, to receive all benefits that may be prescribed by the Authority for its employees
generally as the same presently exists in the personnel policy, including vacation and sick time,
and as same may be amended and modified from time to time.” The Executive Director believes
that this provision also pertains to accruing compensatory time.

The ACHA personnel policy Section 404 provides that administrative, management, supervisory
and clerical personnel shall be entitled to overtime and/or compensatory time which must be used
within 60 days, however, it does not limit overtime or compensatory time to certain salary grade
levels. Nor does it limit the amount of compensatory hours that can be accrued by an employee.
It appears that all directors within the ACHA can accrue compensatory time regardless of their
salary level. As mentioned in the studies below, other public entities limit the amount of
compensatory time that can be accrued by an employee; thus, the ACHA’s policies regarding
compensatory time is not comparable to the practices of other public entities in the local labor
market, as required by OMB Circular A-87 (Attachment B Section 11(b)).

In March 1998, as part of their comparability analysis, the ACHA contracted with Roy Rogers
Management Consultants, Inc. (RRMC), to conduct a Compensation Program Study. The study
compared existing and proposed administrative and maintenance positions within the ACHA to
comparable positions within the local public entity, the City of Atlantic City. This study found
that the City of Atlantic City’s position of Business Administrator is comparable to the ACHA’s
position of Executive Director. However, in comparison of the benefits allowed, our analysis
revealed that the City’s Business Administrator is not entitled to earn compensatory time. The
City of Atlantic City categorizes the position of Business Administrator as unclassified and as
such there is no accrual of time.

The ACHA also conducted their own comparability study selecting specific positions within
several local public entities. This study found that the Executive Director of the Atlantic County
Improvement Authority (ACIA) was comparable to the Executive Director of the ACHA. Our
review of this study revealed that although the Executive Director of the ACIA is entitled to earn
compensatory time, it is limited to 45 hours and must be used within one year of being earned.
In addition, upon termination, the ACIA’s Executive Director is not entitled to any payments for
unused compensatory time.

A further evaluation of the above two comparability studies revealed the following about the
ACHA’s position of Head Project Maintenance Superintendent. The RRMC study found that the
City of Atlantic City’s position of Beach Maintenance Superintendent is comparable to the
ACHA’s Head Project Maintenance Superintendent position. However, although the City’s
Beach Maintenance Superintendent is entitled to earn compensatory time, no more than 100
hours can be accrued. Additionally, the ACHA’s own study revealed that their position of Head
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Project Maintenance Superintendent is comparable to the City’s position of Business
Administrator. However, as previously mentioned, the City’s Business Administrator is not
entitled to earn any compensatory time.

In summary, the compensatory time benefits provided to the ACHA Executive Director and the
Head Project Maintenance Superintendent are not comparable to the practices of other public
entities in the local labor market, and therefore not reasonable. Both comparability studies
revealed that the ACHA allows for earning compensatory time in a more liberal manner.
Accordingly, we recommend that the ACHA’s personnel policy be evaluated and amended to
reflect similar practices of other public entities in the local labor market.

Executive Directors Compensatory Time

Our review revealed that in July 1997, the Executive Director instructed the Comptroller to add
951 hours of previously earned compensatory time to his payroll records. We believe that this is a
violation of the ACHA’s personnel procedures (Section 404). As a result, approximately $68,396
in costs will be unnecessarily incurred by the ACHA upon the retirement of the Executive
Director. We believe that these hours should not have been officially recorded. In this regard,
we noted that the NJSO became aware of this matter and informed ACHA officials not to permit
payment of compensatory time to any retiring employee pending the results of our review.

Regarding the compensatory time, the Executive Director told us that the 951 hours represented
the compensatory time he earned between the period of February 27, 1993, and March 12,
1997. He explained that the time was previously documented on biweekly time sheets and in his
notes; however, it had not been officially recorded on ACHA’s payroll records. He further stated
that the 951 hours were added as a result of the change to Section 404 of the ACHA’s personnel
policy.

The change allowed administrative, management, supervisory and clerical personnel of all grades
to be entitled to overtime/compensatory time off, hour for hour, for those approved hours worked
in excess of 32 ½ hours, but not more than 40 hours per work week. For approved time worked
in excess of 40 hours per week, compensatory time can be earned at a rate of 1½ times such
hours worked over 40 hours. Furthermore, the policy provides that cash overtime will be paid at
1 ½ times the base rate for hours worked in excess of 40 hours if 240 hours have been accrued.
Compensatory time forms are to be submitted no later than two working days after earning
compensatory time. Compensatory time is to be used within 60 days, however, the Executive
Director can grant a waiver for time to be used after the 60 days. According to the Executive
Director, the change in policy provides overtime for all employees including himself.
Additionally, the Executive Director informed us that accrued but unused compensatory time is
paid upon retirement.

As stated above, we believe that adding the 951 hours to the Executive Directors payroll records
was improper and a violation of the ACHA’s procedures. Specifically, the ACHA was unable to
provide evidence showing that approval was obtained prior to the compensatory time being
earned. Nor were we provided any evidence that compensatory forms were submitted for
approval two days after the time was work as required. Additionally, the compensatory time
earned should have been used within 60 days of earning it, especially since there was no waiver
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to allow this earned time to be used after 60 days. We believe that the Executive Director
should have obtained approval from the Board of Commissioners to carry his unused
compensatory time beyond the requirement to use it within 60 days. Furthermore, since this
time was supposedly earned as far back as 1993, we do not believe it was reasonable to record it.
Our review of the Executive Director’s records (logbook/personal date book), that reflected the
951 hours of compensatory time, revealed that some of the hours were earned on holidays,
weekends, and while on travel status (attending conferences). Compensatory time was also
earned while making daily telephone calls to the ACHA, which we believe is unreasonable.
Additionally, part of the 951 hours are considered unsupported because records did not indicate
how or when the compensatory time was earned. As a result, there is a question as to whether or
not this time is legitimate.

The Executive Director stated that originally he did not have the time officially recorded on his
payroll records because he did not think he was entitled to it. However, based on a comment
made by a Board member that all employees that work overtime should be compensated for their
time, the Executive Director believed he was entitled to the time. We disagree with the Executive
Director’s reasoning. Accordingly, we recommend that the ACHA’s Board make a determination
on whether the Executive Director should be allowed to use or be paid for the 951 hours of
compensatory time. Also, an evaluation should be made of any other compensatory time that the
Executive Director has on the books to ensure that it was accrued in compliance with ACHA
personnel procedures.

Head Project Maintenance Superintendent’s Compensatory Time

Our review also revealed that the ACHA’s Head Project Maintenance Superintendent has been
allowed to accrue compensatory time beyond the ACHA’s requirement that it be used within 60
days. Accordingly, as of the pay period ending December 19, 1998, the Head Project
Maintenance Superintendent had a compensatory time balance of 3,214 hours; this equates to
$168,221. We do not believe that it is prudent business practice to allow an employee to accrue
such a large balance of earned compensatory time. As a result, the ACHA will now be faced
with an unreasonable expense when this employee retires.

The Executive Director stated that the Head Project Maintenance Superintendent earned the
compensatory time while handling emergency calls and by working from 7:30 AM to after 5:00
PM daily; even though the ACHA’s normal working hours are from 9:00 AM to 4:00 PM. The
Executive Director further contends that since contractors working at the ACHA consistently
work from 7:30 AM until 5:00 PM, it is necessary for the Head Project Maintenance
Superintendent to also work the same hours for monitoring purposes. However, we do not
believe that the Head Project Maintenance Superintendent should be required to work extra time
each day. Procedures should allow for employees to work in shifts when monitoring contractors,
thus avoiding having to over burden one employee.

As stated above, the ACHA’s personnel policy, Section 404, requires compensatory time to be
used within 60 days of being earned. We found that although the Executive Director provided the
Head Project Maintenance Superintendent with a waiver to use the compensatory time after 60
days, the waiver was not given until April 24, 1998. This was subsequent to when the majority
of the time was earned by the Head Project Maintenance Superintendent. Furthermore, the
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waiver was for all compensatory time earned before and after April 1998. However, we view
this particular waiver as unreasonable and unacceptable as it allowed a substantial amount of
previously and subsequently earned compensatory time to accrue for an indefinite period of time.

Furthermore, we question whether the Head Project Maintenance Superintendent should be
allowed to use all of the recorded time. The Head Project Maintenance Superintendent should
have been aware of the ACHA’s requirement that compensatory time be used within 60 days.
As such, any time earned 60 days prior to the waiver should be removed from his payroll records.
Accordingly, we recommend that the ACHA be required to develop procedures which ensure that
the requirement to use compensatory time within 60 days is adhered to. Also, procedures should
be developed to ensure that perpetual waivers are not issued for subsequent and future earned
compensatory time. The waivers should only extend the time period a reasonable length of time
such as an additional 60 days.


AUDITEE COMMENTS

According to Auditee’s Comments, the draft audit finding inaccurately and incorrectly cite the
ACHA personnel policy, the relevant HUD regulations regarding comparability, and the
compensation program study. The draft finding incorrectly cites the compensation study in that it
states that the Executive Director and the Head Project Maintenance Superintendent positions are
100% comparable to the City of Atlantic City positions of Business Administrator and Beach
Maintenance Superintendent, respectively. The Auditee Comments provide that the ACHA
positions of Executive Director and Head Project Maintenance Superintendent are 130% and
120% comparable to the above City of Atlantic City positions; and that the draft finding cites no
specific regulations violated.     The Auditee Comments further provide that the Executive
Director of the ACHA has the authority to provide a waiver of the requirement to use
compensatory time within 60 days, and did so with regard to both his own and the Head Project
Maintenance Superintendent’s accrued compensatory time. Also, the Executive Director
definitely entered his compensatory time on weekly time sheets submitted in the ordinary course
of business.



OIG EVALUATION OF AUDITEE COMMENTS

As stated in our evaluation of Auditee Comments for Finding 1, the specific HUD criteria has
been added to the findings and quotation marks were used where necessary in citing ACHA
policies. Accordingly, the specific regulations violated have been provided. As for the
Compensation Study, the documentation provided to us revealed that the ACHA’s Executive
Director and the Head Project Maintenance Superintendent positions were 100% compatible with
the City of Atlantic City’s positions of Business Administrator and Beach Maintenance
Superintendent, respectively. Accordingly, we reiterate that the benefits that the ACHA provides
to its employees are not comparable to benefits provided by other public entities in the local labor
market.


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The Executive Director may have written his compensatory time on the bottom of his time sheet,
however, it was not officially recorded on the payroll records until July 1997. As a result, we do
not believe that it was reasonable for the Executive Director to have officially recorded time
supposedly earned almost five years prior to the time it was recorded (from 2/93 to 3/97).
Moreover, the required supporting documentation (compensatory time approval forms) for the
time was never provided. Additionally, the ACHA did not provide any evidence that the
Executive Director granted himself a waiver of the requirement to use compensatory time within
60 days. The HUD-OIG Integrity Bulletin furnished to the auditee, provides that the Executive
Director is hired by the Board of Commissioners (Board), and that the Board is responsible for
the actions of the Executive Director. Therefore, the Executive Director should have obtained
approval to earn compensatory time and a waiver to use the compensatory time beyond 60 days
from the Board. Furthermore, we believe that the waiver provided to the Head Project
Maintenance Superintendent by the Executive Director was unreasonable. It was not prudent for
the Executive Director to provide a waiver for compensatory time earned, but not used in
accordance with ACHA’s personnel policy (Section 404).               In our opinion, the waiver
erroneously allowed previously earned compensatory time (over 3000 hours) and subsequent
earned compensatory time to accrue for an indefinite period of time. Accordingly, we believe that
the accrued compensatory time of the Head Project Maintenance Superintendent is excessive
and should not be allowed.

RECOMMENDATIONS

We recommend that HUD NJSO instruct the ACHA to:

2A.    Amend its overtime/compensatory time personnel policy (Section 404) so that it is
       similar to that of other public entities in the local labor market as required by OMB
       Circular A-87, Attachment B Section 11(b). The ACHA should also consider placing
       limits on the amount of overtime/compensatory time that can be earned and carried
       forward by certain salary grade level employees.

2B.    Determine whether the Executive Director should be allowed to use or be paid for the 951
       hours of compensatory time, since the time was earned prior to the personnel policy
       changes discussed in the finding. Also, consider evaluating the Executive Director’s
       remaining compensatory time and the Head Project Maintenance Superintendent’s
       compensatory time to ensure that the time was accrued in compliance with ACHA’s
       procedures. All compensatory time not accrued or used in accordance with ACHA’s
       procedures should be removed from the payroll records.

2C.    Develop procedures to ensure that compensatory time is used within 60 days of being
       earned, as required by the ACHA’s personnel policy. Also, procedures are to be
       developed to ensure that waivers of this requirement are not made on a perpetual basis.
       Waivers should only extend the 60 days a reasonable length of time, such as an
       additional 60 days.




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ISSUE NEEDING FURTHER CONSIDERATION

During the review we noted another personnel practice that requires corrective action in order to
bring ACHA into full compliance with Civil Service requirements and to promote economy and
efficiency in its operations.

The ACHA’s Personnel Policy Is Not In Accordance With State Civil Service Statutes
Regarding Accumulating Annual Leave.

The ACHA Personnel Policy regarding accumulating annual leave does not properly impose the
two year limitation as dictated by State of New Jersey Civil Service Statutes. Accordingly, the
ACHA’s policy is not in accordance with the Annual Contributions Contract (ACC), Part A
Section 14(a). As a result, both the Executive Director and the Head Project Maintenance
Superintendent have accumulated vacation balances above and beyond statutory requirements.
We are of the opinion that ACHA will be faced with unnecessary and unreasonable retirement
costs when the Executive Director and the Head Project Maintenance Superintendent retire from
ACHA.

New Jersey Statutes Annotated (N.J.S.A.) 11A: 6-3 entitled, “Vacation Leave; Full -Time
Political Subdivision Employees”, provides that vacation leave shall accumulate and be granted
during the next succeeding year only. We believe that this means vacation leave time can only be
accrued for up to two years. However, our review disclosed that ACHA’s policy does not adhere
to the next succeeding year only provision provided under State law. Although Section 501 of
ACHA Personnel Policy provides that employees may not accumulate more than two years
worth of vacation time, it further provides that employees shall not be penalized by losing
vacation time because of necessary work schedules. The policy also provides that no one in a
supervisory capacity shall require any employee under his/her jurisdiction to work where it will
result in a loss of accrued vacation time. However, this policy has not been adhered to since
employees have been allowed to accrue more time than the two year limits set by New Jersey
State statutes.

Our review revealed that pursuant to State Civil Service requirements, 60 days would be the
maximum amount that can be accumulated by the Executive Director within a two year period
(30 days a year). However, the Executive Director’s vacation leave balance as of 12/19/98 totaled
approximately 160 days, which is 100 days over the two year limitation; this equates to
$46,712.04 payable to the Executive Director upon retirement. We also noticed that 42 days is
the maximum two-year allowable accumulated vacation balance for the ACHA’s Head Project
Maintenance Superintendent (21 days a year). However, as of 12/19/98, the Head Project
Maintenance Superintendent’s accumulated vacation leave totaled 47 days, which is 5 days over
the two year limitation; this equates to $1,825.62, payable upon retirement. We believe that the
ACHA’s vacation policy should clearly state that payments for vacation leave is limited to the
State’s maximums upon retirement, and that any leave carried over beyond these maximums will
not be paid. Time accrued over the two year maximum must be used by the end of each year or
the employee should lose it. Only the two year maximum should be allowed to be carried
forward. If not, the ACHA will be faced with unnecessary and unreasonable retirement costs
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when the Executive Director and the Head Project Maintenance Superintendent retire.
Accordingly, we believe that the ACHA should amend their personnel policy regarding vacation
leave so that it is in compliance with New Jersey Civil Service Statutes. Furthermore, we believe
that the ACHA should conduct a study to determine how many other employees are over the two
year limitation and implement a system whereby mandatory vacation time is taken and scheduled
more effectively.




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                                                                  APPENDIX A
                                                                  (Page 1 of 16)
_____________________________________________________________________
AUDITEE COMMENTS

                        HOUSING AUTHORITY &
                    URBAN REDEVELOPMENT AGENCY
                     THE CITY OF ATLANTIC CITY NEW JERSEY

    P O Box 1258   227 Vermont North        Atlantic City -NJ 08404   609-344-1107



                                             January 17, 2000


Alexander C. Malloy, District
Inspector General for Audit
New York/New Jersey
U.S. Department of Housing'
and Urban Development
Office of Inspector General
26 Federal Plaza, Room 3430
New York, New York 10278

Dear Mr. Malloy:

      On November 16, 1999, I received a copy of your letter
enclosing the Draft Audit Findings issued by your office
concerning two specific complaints which were referred to your
office for review. Subsequently, on December 22, 1999, an Exit
Conference was held with representatives of your office, a
representative of HUD Newark and representatives of Housing
Authority and Urban Redevelopment Agency of the City of
Atlantic City (hereinafter "ACHA"), including myself and our
General Counsel, Allen S. Zeller, with whom I consulted.

      Pursuant to our discussions, please accept this as the
response of ACHA to the Draft Audit Findings. I would request
that these written comments be accepted as a basis to revise
and change the Draft Audit Findings and to be included in
their entirety in the Final Audit Findings issued by your
office with regard to this matter. I believe that these
verbatim comments will give balance to the Findings since ACHA
believes strongly that the Draft Findings are flawed and
without merit. As well, since the Draft specifically stated
that the Complaint No. 1 was found to be without merit, it
should be excluded from the Draft. It has no place whatsoever
in the final report.

      As your office has been advised, ACHA and I remain
deeply concerned with regard to the process utilized in the
issuance of the Draft Audit Findings of November 15, 1999.
The Draft Audit Findings make recommendations and conclusions
critical of ACHA, yet the Draft fails to specify or provide
any details of the particular regulations, policies or laws
allegedly violated by ACHA. In fact, the author misquotes and




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                                                                  APPENDIX A
                                                                  (Page 2 of 16)

                                           2

misrepresents the sparse controlling authority cited in the
Draft.

      The Draft makes reference merely to the general
provisions of "OMB Circular A-87," a document comprising of
more than 60 pages; 24 CFR Part 85, a document in excess of 26
pages; a non-defined HUD bulletin allegedly issued in November
1990 and New Jersey Civil Service Statutes which comprise in
excess of 200 pages in Title 11A of New Jersey
Statutes Annotated. The only explicit statute referenced in the
Draft is N.J.S.A. 11A:6-3 which solely relates to
accumulation of vacation leave and which has nothing
whatsoever to do with the two complaints under consideration
in this matter.

      With all due respect, this lack of specificity makes it
virtually impossible for ACHA to fully and adequately defend
itself against the findings and recommendations stated in the
Draft. It, quite frankly, constitutes a denial of due process
of law.

      As you are aware, in advance of the Exit Conference, our
Board Counsel requested in writing that ACHA be provided with
the specific statutes, regulations or other authorities relied
upon in the Draft Audit Findings to support the conclusions
and recommendations contained in that Draft. He cited eight
references which identified the page and paragraph of the
Draft to which ACHA sought specific notification of the
statutes, laws or regulations which were being relied upon.

      At the Exit Conference the representatives of your
office cited Section 11(d) of OMB A-87, 24 CFR Section 85.22,
N.J.S.A. 11A:6-19, N.J.S.A. 11A:6-3 as well as a HUD Bulletin
and a HUD Inspector General Integrity Program Bulletin of
November 1990. We were assured that we would be provided with
copies of the two referenced HUD documents no later than
December 28, 1999. On January 12, 2000, counsel received the
HUD OIG Bulletin, however, the other document still has not
been supplied.

      As a result, ACHA was not provided with a fair
opportunity to influence the presentation of the issues or to
have the multitude of errors contained in the Draft Audit
Findings corrected prior to the issuance of the Final Audit
Report. Clearly, by HUD's own regulations, ACHA is   entitled
to such an opportunity.

      In addition to the foregoing procedural deficiencies,
the Draft Audit Report contains numerous inaccurate and
erroneous conclusions and recommendations. This reply will
address these issues as well.




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                                                                    APPENDIX A
                                                                    (Page 3 of 16)
                                             3

      The Draft Audit Findings cite two specific complaints
which were investigated by the Inspector General's office:

      Complaint No. l: "The ACHA Executive Director
improperly participated in a sick leave buy-out plan for ACHA
employees without appropriate disclosure to the Board of
Commissioners."

      Complaint No. 2:   "The ACHA Executive Director and the
Head Project Maintenance Superintendent improperly accrued
compensatory time."

                            COMPLAINT NO. 1
         With regard to Complaint No. 1, the Draft Audit Findings
state:

              "Our review revealed that this complaint
              has no merit because the ACHA Board of
              Commissioners (Board) were made aware of
              the proposed one time sick leave buyout
              as well as the individuals who
              participated in the buyout (including
              the Executive Director) on several
              occasions." Emphasis added.

      Based upon this determination by the Inspector General's
office, properly there should be no further discussion
presented concerning this Complaint.   Nevertheless, the author
of the Draft improperly concluded that:

              "...we believe that the buy-out of accrued
              sick leave was an unnecessary,
              unreasonable and ineffective management
              decision" and that "...ACHA officials
              instituted a sick leave buyout plan
              which is not comparable to local public
              practices as required by OMB Circular A-
              87."

      Once again, at the Exit Conference the only specific
reference to OMB Circular A-87 related to Section 11(d),
entitled "Fringe Benefits." A proper reading of this section,
however, clearly discloses that it expressly permits ACHA to
adopt a sick leave buy-out plan as well as any other "fringe
benefits" as long as these benefits are "reasonable and are
required by law, governmental unit-employee agreement, or an
established policy of the governmental unit." Emphasis added.

In the instant case, as acknowledged by the Draft Audit
Findings, ACHA formally and properly revised its personnel
policy to permit the sick leave buy-out plan under




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                APPENDIX A
                                                      (Page 4 of 16)
                                       4


consideration herein.   In fact, as recognized in the Draft
Audit Findings, changes in the ACHA personnel policy
pertaining to accumulated sick leave were under consideration
as far back as November 1991, well before the Resolution
implementing the one-time sick leave   buy-out program was
passed by the Board in August 1997.

      This personnel policy change initially came under active
consideration when certain inequities were perceived in the
way the former policy impacted on long-time ACHA employees who
retired without being paid fair consideration for the value of
their accumulated sick time. It was apparent that this former
"use it or lose it" policy resulted in some employees taking
numerous days off and charging them against accumulated sick
leave, thereby creating operational problems for ACHA. It was
intended that the change in the policy would advance the
legitimate objectives of eliminating these issues attributable
to unscheduled employee absenteeism while, at the same time,
treating employees who accumulated unused sick time in a fair
and equitable manner.

      Thus, under the revised personnel policy, on a one-time
basis, those employees with accumulated sick leave of over 200
hours would receive a cash payment at the rate of one day's
pay for each day of accumulated sick leave. In adopting this
policy, ACHA sought to encourage employees to accumulate at
least 200 hours of sick leave to guard against major illnesses
and long-term absences. At the same time, ACHA sought to
provide some reward for those conscientious employees who
accumulated their sick leave as opposed to those who used all
of their sick leave time as fast as it was earned. A stated
purpose of this policy change resulted in an incentive for the
proper use of sick leave and also enabled ACHA to better
schedule absences and prevent an abuse of the use of sick
leave which significantly and adversely impacted on the daily
ongoing operation of ACHA. Unequivocally, the sick leave buy-
out plan was a reasonable, necessary and an effective
management decision which, in the long run, saved ACHA a
significant amount of money and also insured that its
operations would continue without adverse impact of absences.

      ACHA submitted full financial particulars of the
proposed sick leave buy-out plan to the Regional HUD Office in
Newark, New Jersey, advising HUD of the change in their
personnel policy concerning the sick leave buy-out proposal
and provided HUD with all of the information as to its effect
on the operating budget.   In part, because of HUD's
requirement that any changes in wages and compensation must be
submitted to HUD for review and approval, ACHA requested that
HUD grant its approval to this plan. By letter dated December
1, 1997, Carmen Valenti, Director of the Office of Public
Housing, advised ACHA that his office was not required to




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                                                            APPENDIX A
                                                            (Page 5 of 16 )
                                           5


review and approve the operating budget or changes in salary
and compensation. He recommended, however, that ACHA obtain
an opinion of its counsel to insure that the sick leave buy-
out plan complied with applicable state law. (Attached hereto
are copies of both letters marked as Exhibits 1 and 2.)
Accordingly, ACHA inquired of both its general counsel and
special labor counsel as to whether the sick leave buy-out
plan was permitted under New Jersey law. Both counsel
responded that there were no statutes or court opinions that
prohibit the payment of such sick leave. In fact, special
labor counsel specifically referred to the statute relied upon
in the Draft Audit Findings, N.J.S.A. 11A:6-19, and rendered
an opinion that "This statute does not apply to the present
situation." (Attached hereto Exhibits 3 and 4 are copies of
both opinion letters.) Thus, without question, ACHA acted
properly and prudently in adopting the sick leave buy-out plan
and had every reason to believe that it was acceptable to HUD.

      The Draft Audit Finding stating that the sick leave buy-
out plan was not comparable to "local public practices" is
totally without foundation or merit. In fact, this sick leave
buy-out plan is consistent with similar employee benefit plans
maintained by the City of Atlantic City and elsewhere.
Indeed, as set forth below, both the City of Atlantic City and
private employees in Atlantic City maintain employee benefit
plans which are far more generous then that of ACHA.

      In both the Draft Audit Findings and at the Exit
Conference the staff of the Inspector General's Office totally
discounted and improperly ignored the documentation submitted
by ACHA which supported its position that the sick leave buy-
out plan was comparable to and consistent with local public
practices existing in the labor market in which ACHA competes.
This includes the City of Atlantic City and 11 hotels and
casinos located in Atlantic City. In fact, the City's
compensation and benefit package contain numerous fringe
benefits which are not provided by ACHA. These benefits
include up to 10% of each year's pay as longevity pay, it
permits employees who are retiring to remain on the payroll
without appearing for work for up to 18 months while they use
up their accumulated sick leave, it provides for payment for
attending college courses as well as the payment for
accumulated sick leave.

      For example, at its Council meeting on December 29,
1999, Atlantic City Council approved the payment of
accumulated sick time to six employees in the following
amounts: $18,766.18, $10,068.94, $89,899.98, $25,883.75,
$38,625.60, $46,235.89. In addition, a review of the City
Council agendas for 1999 disclosed that at least 34 employees
were paid for their accumulated sick time in amounts in excess
of $20,000.00.One employee received a total of $141,496.00




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                                                            APPENDIX A
                                                            (Page 6 of 16)
                                           6


for his accumulated sick time. The average payment amounted
to $73,903.00 and the total for all 34 employees amounted to
$2,512,702.00 in 1999 alone.

      Furthermore, as stated, the fringe benefit package for
the City of Atlantic City includes longevity pay for its
employees which is not provided by ACHA. If ACHA were to
provide longevity pay to its employees consistent with the
City, it would cost ACHA in excess of $195,000.00 per year.

      Thus, it is submitted that the findings, conclusions and
recommendations of the Draft Audit Findings that the sick
leave buyout plan is "unreasonable and unnecessary since it
does not adhere to local comparable public practices" is
patently flawed and invalid.

      Furthermore, the Draft Audit Findings misrepresents and
misquotes OMB Circular A-87, New Jersey law and the ACHA
personnel policy regarding sick leave.

      Specifically, the Draft Audit Findings improperly states
that OMB Circular A-87 requires that the "sick leave buy-out"
be "comparable to local public practice." In fact, this
constitutes a material misstatement and misrepresentation.

      OMB Circular A-87, Section 11(b) provides that
"...compensation will be considered reasonable to the extent
that it is comparable to that paid for similar work in the
labor market in which the employing government competes for
the kind of employees involved." Section 11(a) defines
compensation for personnel services as "all remuneration, paid
currently or accrued, for services rendered during the period
of performance under Federal awards, including but not
necessarily limited to wages, salaries and fringe benefits."

      The ACHA has adopted a compensation package which
included a one-time buy-out of accumulated sick leave.    This
benefit is comparable to that paid for similar work in the
City of Atlantic City as set forth above. The Draft Audit
Findings cites no examples whatsoever which would contradict
the documentation submitted by ACHA in this regard and merely
states the personal opinion of the author which, frankly, is
irrelevant.

      At the Exit Conference, the Inspector General's staff
cited 24 CFR Section 85.22 and New Jersey statute N.J.S.A.
11A:6-19 in support of its position that New Jersey law limits
compensation for sick leave upon retirement to $15,000.00.
Section 85.22 does nothing more than make reference to OMB
Circular A-87. Although the New Jersey statute is not
specifically referenced in the Draft, reliance upon this
statute is misplaced for numerous reasons:




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                                                             APPENDIX A
                                                             (Page 7 of 16)
                                      7

      First, this statute specifically applies solely to State
employees.   ACHA employees are, of course, not State
employees.

      Second, the statute refers to the payment of sick leave
upon retirement. The ACHA sick leave buy-out plan was not
related to retirement.

      Third, the opinion received from special labor counsel
to ACHA specifically stated that this statute does not apply
to the present situation involving the sick leave buy-out
plan.

      Fourth, the City of Atlantic City acknowledges that this
statute does not apply to its employees since it routinely
pays its employees for accumulated sick leave upon retirement
in excess of the $15,000.00 statute limitation.

      The Draft Audit Findings misrepresents and misquotes the
ACHA personnel policy.   The Draft states "The ACHA's personnel
policy defines sick leave as the absence of an employee
because of illness, exposure to contagious disease, and/or
care of a seriously ill family member...sick leave is not earned
leave, it is a benefit and condition of employment." As a
result, the Draft concludes that "As such, we believe that
employees who save their sick leave should only receive
compensation upon retirement in accordance with State law,
which limits compensation to $15,000.00 maximum." Again, this
statute is not applicable to ACHA or its plan.

      In fact, the ACHA personnel policy states that "Sick
leave is earned after the 15th day of each month."

      The ACHA sick leave policy provided for a one-time buy-
out for the reasons set forth previously. State law does not
prohibit the adoption of this policy nor does Federal law or
any applicable regulation. The opinion set forth in the Draft
Audit Findings that "We believe that employees who save their
sick leave should only receive compensation upon retirement in
accordance with State law which limits compensation to
$15,000.00 maximum" is purely irrelevant and gratuitous since
ACHA has complied with all relevant laws, regulations and
policies.

      On January 31, 1997, HUD issued a Transmittal relating
to Guide Book 7401.7 involving Employee Benefit Plans.   This
Transmittal is the controlling document for public housing
authorities relating to the adoption and implementation of
employee benefit plan. This Transmittal abolished the former
HUD Personnel Policies Handbook which dealt with "the
provision, implementation and administration of general




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                                                            APPENDIX A
                                                            (Page 8 of 16)
                                           8


personnel practices such as comparability, salary setting,
leave and travel for public housing agencies." HUD set forth
the stated purpose of the Transmittal as follows:

       "The elimination of HUD requirements is in keeping
      with the Department's movement toward deregulating
      and decontrolling HAs. The removal of most
      employee benefit plan requirements will maximize
      flexibility in the hands of HAs. As decision
      makers, HAs will be responsible for ensuring that
      their employee benefit programs are both viable and
      affordable."

      Thus, with regard to the sick leave buy-out plan, ACHA
specifically designed a plan which was both viable and
affordable as required by HUD regulations. In an effort to
implement the sick leave buy-out plan, ACHA forwarded all of
the information to HUD and requested HUD's review and
approval. HUD's only response to ACHA was to remind ACHA that
it had to comply with applicable State law and recommended
that ACHA obtain an opinion of counsel regarding the
requirements of relevant State law. ACHA obtained two
opinions from two separate law firms before proceeding with
implementing the sick leave buy-out plan. Both firms opined
that State law permitted the sick leave buy-out.

      In conclusion, based upon the foregoing, it is submitted
that the findings, comments and recommendations set forth in
the Draft Audit Findings are without basis and cannot be
supported by any applicable laws, regulations or policies.
The only Finding that can properly be issued is that Complaint
No. 1 has not merit.

                        COMPLAINT NO. 2

      Complaint No. 2 states that the ACHA Executive Director
and the Head Project Maintenance Superintendent improperly
accrued compensatory time contrary to established ACHA
procedures which were not in compliance with HUD regulations.
In this regard, the Draft Audit Findings inaccurately and
incorrectly cite the ACHA personnel policy, the relevant HUD
regulations regarding comparability and the compensation
program study.

      Section 404 of ACHA's personnel policy manual states
that "Administrative, management, supervisory and clerical
personnel shall be entitled to overtime compensation." Thus,
both the Executive Director and the Head Project Maintenance
Superintendent are entitled to accrue compensatory time. The
policy further provides that "Compensatory time off may be
taken only at the convenience of the Authority and only when
the employee's absence will not hinder the functions and




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                                                              APPENDIX A
                                                              (Page 9 of 16)
                                           9


operations of the Authority." Finally, the policy provides
that "Compensatory time must be taken by employees within a 60
day period of it being earned. A waiver may be granted by the
Executive Director for compensatory time to be taken after the
60 day period."

      Thus, it is clear that Section 404 of ACHA's personnel
policy permits the Executive Director and the Head Project
Maintenance Superintendent to claim compensatory time. It is
uncontraverted that the Executive Director had the authority
to provide a waiver of the 60 day period and did so with
regard to both his own accrued comp time and that of the Head
Project Maintenance Superintendent. Additionally, the Draft
Report is incorrect since the Executive Director definitely
entered his compensatory time on weekly time sheets submitted
in the ordinary course of business. It is also uncontraverted
that the Executive Director provided the appropriate waivers
for the Head Project Maintenance Superintendent as well as
other employees including himself. The personnel policy does
not prohibit him from doing so, rather, it authorizes such a
waiver.

      Furthermore, the Draft cites a compensation program
study to the effect that "This study found that the City of
Atlantic City's position of Business Administrator is
comparable to the ACHA's position of Executive Director."
This is untrue. In fact, the study found that the position of
the Executive Director is equal to 130% of the City Business
Administrator's responsibility. Similarly, the Draft makes
the same error with regard to the Head Project Maintenance
Superintendent in its comparison to the City Beach Maintenance
Superintendent. In actuality, the two positions are not
similar and the study indicates that the ACHA Superintendent
is equal to 1200 of the Beach Superintendent.   The effort in
the Report to associate any of these positions is simply
fallacious and disingenuous.

      The Draft cites no specific regulation, law or policy
that was violated or abrogated by ACHA. Indeed, OMB Circular
A-87 provides a more comprehensive definition of compensation
for personnel services than that stated in the Draft.   ACHA
considered and weighed all of the compensation packages of the
respective competitors, both public and private. The
specifics of these comparisons are set forth in the response
to Complaint No. 1. Clearly, ACHA complied with the
requirements of all regulations and laws. As a result, any
adverse findings or recommendations made in the Draft are
without merit and represent purely a personal belief of the
author.

      The Draft inaccurately takes facts and makes findings
out of context of the entire circumstances and endeavors to




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                                                    APPENDIX A
                                                           (Page 10 of 16)
                                         10


direct ACHA as to how to run the Authority. This effort is
improper and goes well beyond the mandate of the obligations
and responsibility of such an audit.

      For the foregoing reasons, the Draft Audit Findings must
be revised to reflect the true and accurate circumstances as
set forth in this letter.

      Once again, I would request that this entire response be
included in the Final Report.   If this response is in any way
to be edited, I would request that I be so advised in advance
and, further, that I be afforded the opportunity to approve
any such changes or edits to this response.

                                Very truly yours,




                                John J . McAvaddy, Jr., Executive
                                  Director

JJM:lmd
cc: Mr. John Glowacki
     Mr. Tony James
     Mr. Chris Costello
     Allen S. Zeller, Esquire




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                                                                                          APPENDIX A
                                                                                          (Page 11 of 16)
                                                                                bcc:        J. Glowacki
                                                                                            H. Egbert
                                                                                          chrono/file
                                  HOUSING AUTHORITY &
                                  URBAN REDEVELOPMENT
                                         AGENCY
                                   OF THE CITY OF ATLANTIC CITY NEW JERSEY
            P O. Box 1258 227 Vermont North Atlantic City. NJ 08404 609-344-1107 FAX 609-344-1015
                        November 5, 1997

Mr. Carmen Valenti, Director
Department of Housing & Urban Development
One Newark Center
Newark, New Jersey 07102-5260

Dear Mr. Valenti:

      With this letter you will find revision #1 to our Operating Bud-
get for fiscal year ending March 31, 1998, and a revised operating
subsidy calculation. The budget is enclosed for information purposes
only, but the revised subsidy calculation will require your approval.

      Our Board of     Commissioners have approved a one-time buyout of
unused accumulated     sick leave hours in excess of 200 hours, for all
employees. This is     in addition to their regular compensation package.
we have attached a     schedule of maximum amounts payable (calculated as
of July 22, 1997).     The estimated maximum chargeable to this budget is
$589,000.

      The total allocated cost of $589,000 will be offset by one-time
savings and adjustments as follows:

      1.   Increased operating subsidy eligibility                           $245,921
      2.   Prior year adjustment                                               83,120
      3.   Savings in insurance                                               100,000
      4.   Savings in contract costs                                          150,000
      5.   Decrease in reserve                                                  9,959
                                            Total                            $589,000

      We are aware that you are not required to approve our budget;
however, based on previous conversations between you and I about the
one-time buyout of excess sick leave, we believe that changes in wages
and compensation must be brought to your attention for review and ap-
proval and reflected in the budget. If further changes take place
between now and fiscal year end, they will be included in another re-
vision.

      Your approval is requested before December 20, 1997, if possible,
so that we could make payments to employees before calendar year end.
Thank you for your attention to our request.

                                             Sincerely,

                                             JOHN J. MCAVADDY, JR.
                                             Executive Director
JJM: _JFG/pb
attachments                      EXHIBIT “I"

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                                                                                APPENDIX A
                                                                                (Page 12 of 16 )


                                    U.S. Department of Housing and Urban Development
                                    Office of Public Housing
                                    One Newark Center

                                             Newark, New Jersey7102
    DEC   0 1 1997



Mr. John J. McAvaddy, Jr.
Executive Director
Atlantic City Housing Authority
P.O. Box 1258
227 Vermont North
Atlantic City, New Jersey 08404

Dear Mr. McAvaddy:

       We have received your letter dated November 5, 1997 requesting our review and approval
of your proposed one-time payout for accumulated sick leave to your employees.

       Since this office is not required to review and approve your Operating Budget or changes
in salaries and compensation, we have not reviewed your request Current policy requires
Housing Authorities who are not subject to these reviews to maintain appropriate documentation
substantiating their fiscal activities on site, to be made available at the time a management review
is conducted.

       We must caution you, however, that New Jersey Civil service statutes also address the
issue of sick leave and remind you to ensure your compliance with applicable state law. We
recommend that you obtain an opinion of counsel regarding the requirements under state law.

      The financial/operating subsidy issue raised in your letter will be handled separately by our
Finance & Budget division.

       If you have any questions in this matter, please contact John Niesz of my staff at 201-622-
7900, ext. 3609 _
                                     Sincerely,

                                      Carmen Valenti
                                      Director
                                      Office of Public Housing



                                             EXHIBIT "2”



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                                                          APPENDIX A
                                                          (Page 13 of 16)



                        December 12, 1997


John F . Glowacki, Director
of Administrative Services
Atlantic City Housing Authority
P.O. Box 1258
Atlantic City, New Jersey 08404

         RE:   Employee Unused Sick Leave
               Our File No: 5338-1-97

Dear Mr. Glowacki:

       This letter is in response to your request for
advice regarding the Housing Authority's proposal to buy
back sick leave from employees in excess of 200 hours.

       Pursuant to N.J.S.A. 11A:6-20, an employee may make
application for supplemental compensation in the form of
accumulated sick days.    In addition, there appears to be
no prohibition against the employer buying back unused
sick leave at its discretion.

       The New Jersey Courts have taken the position that
supplemental compensation paid to public employees is not
a gift of public money in violation of N.J. Const., Art.
VIII, Section III, Par. 2, so long as it is included
within the conditions of employment. Maywood Ed. Assn.,
Inc., v. Maywood Bd. of Ed., 131 N.J. Super. 551 (Ch.
Div. 1979).

       Although there appears to be no prohibition against
the Housing Authority buying back unused sick leave from
employees, pursuant to N.J.S.A. 11A:6-5 and N.J.A.C.
4A:6-1.3(f), unused sick leave shall accumulate from year
to year without limit. Therefore, any buy back proposal
should be done with the employee's written consent.   This
consent will serve as the employee's waiver of the right
to have his/her sick leave accumulate without limit for
purposes of this one-time buyout.

       In addition, if there is a collective bargaining
agreement between the employees and the Housing

                                  EXHIBIT “3”




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                                                             APPENDIX A
                                                             (Page 14 of 16)


John F. Glowacki, Director
December 12, 1997
Page Two

Authority, please forward me a copy of same so that I may
review it with respect to this issue regarding unused
sick leave.

      If I can be of any further assistance, please feel
free to contact me.

                                   Very truly yours,

                                   ZELLER   AND   BRYANT




                             By:
                                   LESLIE M. GORE, Esquire

LMG:pk

CC:   John McAvaddy, Executive
           Director




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                                                                     APPENDIX A
                                                                     (Page 15 of 16)

                      MONTGOMERY, MCCRACKEN, WALKER S. RHOADS, LLP



                                                                                    LIBERTYVIEW
                                                                               457 HADCNFIELD ROAD
                                                                             CHERRY HILL, NJ 08002
                                                                            MICHAEL O MATTEO SENIOR
                                                                      NEW • JERSEY Responsible c Attorney
                                       2t5-772.1500                            609-488-7700
     DIRECT DIAL                                                           FAX 609 498-7720
                                     FAX 275-77z.7620
     2157727291




                                       December 15, 1997


John F Glowacki
Director Of Administration
Atlantic City Housing Authority
227 Vermont North, 17th Floor
P.0.Box 1258
Atlantic City, NJ 08404


        Accumulated Paid Sick Leave
    RE: Buyout for Current Employees

Dear John:

      You have asked our opinion concerning whether the Authority
can make a one-time buyout of paid sick leave to current
employees !as opposed to retiring employees). You have asked us
to research this question under New Jersey state law because you
^a-..-e already received an opinion from HUD that it does not
violate federal law. Therefore, our opinion is limited to the
legality of such an action under New Jersey state law.

                                   Brief Facts

      It is our understanding that the Authority is planning to
Implement a new sick leave policy that will limit accrual of sick
leave to 200 days. Several employees have accumulated more than
200 days and the authority wishes to pay them some amount of
compensation to "cash in" these days.

                                    Legal Discussion
       Nothing under state law requires that these employees be
 paid for the excess days.   Conversely, there do not appear to be
any court opinions or statutes that prohibit the payment of such
sick leave.  Under New jersey's state civil service code, there
is a provision that deals with the payment of accumulated sick
leave to retiring employees. Under this statute, employers are
permitted to pay employees up to $15,000 for accumulated sick
leave. N.J.S.A. § 11A:6-19. The civil service formula provides

                               EXHIBIT "4"
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                                                                    APPENDIX A
                                                                    (Page 16 of 16)


MONTGOMERY. McCRACKEN, WALKER & RHOADS... LLP




December 15, 1997
Page 2




      that employees be paid at one-half their daily rate of pay
      (during their final year of employment) for each accumulated sick
      day.   I am enclosing a copy of the statute for your convenience.

            This statute does not apply to the present situation. The
      Authority may use this statute for guidance and may limit the
      amount it pays any current employee similarly -- but it is not
      required to do so under state law.

            We trust the foregoing is helpful. If you have any
      questions or need any further information, please do not hesitate
      to contact me.


                                                Very truly yours,


                                                Charles A. Ercole


                  Kenneth M. Jarin, Esq.




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                                                                 APPENDIX B
                                                                  (Page 1 of 3)
DISTRIBUTION

Executive Director, Atlantic City Housing Authority, Atlantic City,
    New Jersey (2)
Chairman, Board of Commissioners, Atlantic City Housing Authority, Atlantic
    City, New Jersey
Chairman, Housing Committee, NAACP, Atlantic City, New Jersey
Deputy Secretary, SD, Room 10100
Chief of Staff, S, Room 10000
Special Assistant to the Deputy Secretary for Project Management, SD,
    Room 10100
(Acting) Assistant Secretary for Administration, S, Room 10110
Assistant Secretary for Congressional & Intergovernmental Relations,
    J, Room 10120
Senior Advisor to the Secretary, Office of Public Affairs, S, Room 10132
Director of Scheduling and Advance, AL, Room 10158
Counselor to the Secretary, S, Room 10234
Deputy Chief of Staff, S, Room 10266
Deputy Chief of Staff for Operations, S, 10226
Deputy Chief of Staff for Programs and Policy, S, Room 10226
Deputy Assistant Secretary for Public Affairs, W, Room 10222
Special Assistant for Inter-Faith Community Outreach, S, 10222
Executive Officer for Administrative Operations and Management, S, Room 10220
Senior Advisor to the Secretary for Pine Ridge Project, W, Room 10216
General Counsel, C, Room 10214
Office of Deputy General Counsel, CB, Room 10220
Director, Office of Federal Housing Enterprise Oversight, O, 9th Floor
Assistant Secretary for Housing/Federal Housing Commissioner, H, Room 9100
Office of Policy Development and Research, R, Room 8100
Inspector General, G, Room 8256
Assistant Secretary for Community Planning and Development, D, Room 7100
Government National Mortgage Association, T, Room 6100
Assistant Secretary for Fair and Equal Housing Opportunity, E, Room 5100
Chief Procurement Officer, N, Room 5184
Assistant Secretary for Public and Indian Housing, P, Room 4100
Chief Information Officer, Q, Room 3152
Director, Office of Departmental Operations and Coordination, I, Room 2124
Chief Financial Officer, F, Room 2202
Director, Enforcement Center, V, 200 Portals Building, 1250 Maryland Avenue,
    SW, Washington, DC 20024
Director, X, Real Estate Assessment Center, X, 1280 Maryland Avenue, SW,
    Suite 800, Washington, DC 20024



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                                                            APPENDIX B
                                                            (Page 2 of 3)
______________________________________________________________________

Director, Office of Multifamily Assistance Restructuring, Y, 4000 Portals Bldg.,
       1280 Maryland Avenue SW, Washington, DC 20024


(Acting ) Secretary’s Representative, New York/New Jersey, 2AS (2)
Senior Community-Builder Coordinator, 2FS (2)
Director, Office of Public and Indian Housing, 2FPH (2)
Assistant General Counsel, New York/New Jersey, 2AC
Assistant Deputy Secretary for Field Policy and Management, SDF, Room 7108
Deputy Chief Financial Officer for Finance, FF (Room 2202)
Director, Office of Budget, FO (Room 3270)
CFO, Mid-Atlantic Field Office, 3AFI (2)
Office of Public and Indian Housing, PC, (Attn: Audit Liaison , Room 5156)
Departmental Audit Liaison Officer, FM Room 2206 (2)
Acquisitions Librarian, Library, AS (Room 8141)

Deputy Staff Director
Counsel Subcommittee on Criminal Justice
Drug Policy & Human Resources
B373 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Fred Thompson
Chairman
Committee on Governmental Affairs
340 Dirksen Senate Office Building
United States Senate
Washington, DC 20510

The Honorable Joseph Lieberman
Ranking Member
Committee on Governmental Affairs
706 Hart Senate Office Building
United States Senate
Washington, DC 20510




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                                                            APPENDIX B
                                                            (Page 3 of 3)
________________________________________________________________________

The Honorable Dan Burton
Chairman
Committee on Governmental Reform
2185 Rayburn Building
House of Representatives
Washington, DC 20515


Henry A. Waxman
Ranking Member
Committee on Governmental Reform
2204 Rayburn Building
House of Representatives
Washington, DC 20515

Subcommittee on General Oversight & Investigations
O’Neill House Office Building - Room 212
Washington, DC 20515
(Attention: Cindy Fogleman)

Director, Housing & Community Development Issue Area
US GAO, 441 G Street, NW, Room 2474
Washington, DC 20548
(Attention: Judy England-Joseph)

Steve Redburn, Chief
Office of Management and Budget
725 17th Street, NW Room 9226
New Executive Office Building
Washington, DC 20503




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