oversight

Adopt-A-Family of the Palm Beaches, Inc.Supportive Housing Grant, West Palm Beach, Florida

Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-11-03.

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

                     ADOPT-A-FAMILY
                OF THE PALM BEACHES, INC.
               SUPPORTIVE HOUSING GRANT
               WEST PALM BEACH, FLORIDA


                         01-AT-251-1002
                        NOVEMBER 3, 2000


                          OFFICE OF AUDIT
                    SOUTHEAST/CARIBBEAN DISTRICT




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                                                         Issue Date
                                                              November 3, 2000
                                                         Audit Case Number
                                                              01-AT-251-1002




TO:           Jack Johnson, Director, Office of Community Planning and Development, 4DD




FROM:         Nancy H. Cooper
              District Inspector General for Audit-Southeast/Caribbean, 4AGA


SUBJECT:      Adopt-A-Family of the Palm Beaches, Inc.
              Supportive Housing Grant
              West Palm Beach, Florida

As part of a nationwide review of HUD’s Continuum of Care, we audited the 1996 Supportive
Housing Grant (No. FL14B960102) awarded to Adopt-A-Family of the Palm Beaches, Inc. (AAF).

AAF’s activities were consistent with its application and AAF timely spent grant funds for eligible
activities. However, AAF needed to improve administration of the program, and our report contains
three findings requiring action by your office.

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

Should you have any questions, please contact James D. McKay, Assistant District Inspector
General for Audit, at (404) 331-3369 or Auditor Tony Bailey at (904) 232-1226. We will provide
AAF a copy of this report.




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Executive Summary
As part of a nationwide audit of HUD’s Continuum of Care Program, we audited the 1996 Supportive
Housing Grant awarded to Adopt-A-Family of the Palm Beaches, Inc (AAF). The audit objectives
were to determine whether AAF:

  •    Implemented activities consistent with its application;
  •    Spent funds for eligible activities under Federal regulations and applicable cost principles;
  •    Maintained evidence of measurable results;
  •    Adequately leveraged funding; and
  •    Spent funds timely.

We determined AAF implemented activities consistent with its applications, adequately leveraged
funding, and timely spent grant funds for eligible activities. However, AAF needed to improve its
administration of the program. Specifically, the audit disclosed AAF did not:

   •   Follow Federal procurement requirements when awarding a professional counseling services
       contract. Instead, AAF contracted solely with a coalition partner. As a result, AAF and
       HUD had no assurance that the best service and price were obtained. Furthermore, AAF did
       not obtain adequate supporting documentation for counseling services expenditures. As a
       result, grant expenditures totaling $88,741 were unsupported.

   •   Provide the agreed level of service for transitional housing. AAF chose to vacate and renovate
       available units during the grant period. During December 1999, only 15 of the agreed 32 units
       were available to house homeless families. AAF’s withdrawal of the units resulted in a
       significant reduction in the level of service that violated HUD requirements.

   •   Provide accurate or complete information in its annual performance reports. AAF did not
       monitor one goal and underreported other goals. As a result, HUD lacked information to
       determine whether the grant activities were achieving intended results.

We recommend that you instruct AAF to improve its controls over the program and that you monitor
any ongoing or future grants.


Exit conference                       We presented our findings to AAF and HUD officials during the
                                      audit, and held an exit conference on September 20, 2000. AAF
                                      provided written comments to our findings on October 3, 2000.
                                      We considered the comments and suggestions in preparing our
                                      final report. We included excerpts of AAF’s comments in each
                                      finding and the complete comments as Appendix B.




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Table of Contents


Management Memorandum                                                         i


Executive Summary                                                           iii


Introduction                                                                 1


Findings

1    Inadequate Contracting and Unsupported Costs                            3


2    Level of Service Not Provided as Agreed                                 7


3    Annual Performance Reports Not Accurate or Complete                     9



Management Controls                                                         11


Follow-Up On Prior Audits                                                   13



Appendices
      A Schedule of Unsupported Costs                                       15

      B AAF Comments                                                        17

      C Distribution                                                        23




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Abbreviations

AAF              Adopt-A-Family of the Palm Beaches, Inc.
CFR              Code of Federal Regulations
FSO              Florida State Office
HUD              U.S. Department of Housing and Urban Development
OMB              Office of Management and Budget
SAFE II          Stable, Able, Family, Environment (project extension)
SHP              Supportive Housing Program




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Introduction
Background

Title IV of the Stewart B. McKinney Homeless Assistance Act authorized the Supportive
Housing Program (SHP). The program is designed to promote the development of supportive
housing and services. The program encourages the use of innovative approaches to assist
homeless persons and provides supportive housing to enable them to live as independently as
possible. Eligible activities include:

       •   Transitional housing;
       •   Permanent housing for homeless persons with disabilities;
       •   New or increased supportive services for homeless people not living in supportive
           housing; and
       •   Other types of innovative housing for homeless persons.

Adopt-A-Family of the Palm Beaches, Inc., 2330 South Congress Avenue, Suite 1C, West Palm
Beach, Florida 33406, was founded in 1983 and is a not-for-profit 501(c)(3) corporation. As the
agency evolved, its target population became families with children who are homeless, at risk of
becoming homeless, or have a family member with a medical illness. In 1992, HUD awarded
AAF a 5-year Supportive Housing Program (SHP) grant to provide transitional housing and
supportive services to 29 homeless families with children.

In 1996, AAF applied for funding to expand Project SAFE to serve additional families by
providing transitional housing with support services where homeless families with children can
gain self-sufficiency and permanent housing. The expansion program is called SAFE II. HUD
funded SAFE II with a 1996 Supportive Housing grant for $1,102,319. Grant funds were
provided for acquisition ($400,000), operations ($197,156), supportive services ($455,529), and
administration ($49,634). The grant agreement was signed by HUD on April 4, 1997, and had a
3-year term.



Audit Objectives                    We audited the 1996 Supportive Housing Grant.           The
                                    objectives were to determine whether AAF:

                                        •   Implemented activities consistent with its
                                            application;
                                        •   Spent funds for eligible activities under Federal
                                            regulations and applicable cost principles;
                                        •   Maintained evidence of measurable results;




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Introduction


                       •     Adequately leveraged funding; and
                       •     Spent funds timely.


Audit Scope and     To accomplish our audit objectives, we interviewed HUD
                    and AAF officials; visited the project site; reviewed the
Methodology         grant application, grant agreement, and progress report; and
                    analyzed financial records and participant information.

                    Total grant charges were $1,086,477. We judgmentally
                    selected and tested transactions totaling $320,634 (30
                    percent). Also, AAF awarded two contracts that we tested
                    for compliance with procurement standards. Further, AAF
                    provided 104 participant families with transitional housing.
                    We judgmentally selected 12 participants (12 percent), for
                    testing measurable results. We also judgmentally selected
                    10 families (10 percent), for testing extended services. We
                    conducted a site visit to the acquired property to determine
                    whether the units were habitable. The project contained 40
                    units in 5 buildings. Thirty-two 2-bedroom units were
                    purchased with HUD funds, while the remaining 8 units
                    were purchased with other funds. We judgmentally
                    selected and inspected two units.

                    Our audit covered the period April 4, 1997, through
                    December 31, 1999. However, we extended the audit
                    period as necessary. We performed the audit work between
                    January and June 2000. We conducted the audit in
                    accordance with generally accepted government auditing
                    standards for performance audits.




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                                                                                   Finding 1


Inadequate Contracting and Unsupported Costs
AAF did not follow Federal procurement requirements when awarding a professional counseling
services contract. Instead, AAF contracted solely with a coalition partner. As a result, AAF and
HUD have no assurance that the best service and price were obtained. Furthermore, AAF did not
obtain adequate supporting documentation for counseling services expenditures. As a result, grant
expenditures totaling $88,741 were unsupported.

Federal procurement regulations state that:

   •   All procurement transactions shall be conducted in a manner to provide, to the maximum
       extent practical, open and free competition (24 CFR 84.43).

   •   All recipients shall establish written procurement procedures. These procedures shall
       provide for, among other things, a clear and accurate description of the technical
       requirements for the service to be procured, and a description of technical requirements in
       terms of functions to be performed or performance required, including the range of
       acceptable characteristics or minimum acceptable standards (24 CFR 84.44).

   •   A cost or price analysis shall be made and documented in the procurement files in
       connection with every procurement action (24 CFR 84.45).

   •   The recipient shall include provisions to define a sound and complete agreement in all
       contracts (24 CFR 84.48).


Inadequate procurement               AAF did not have an adequate procurement policy. The
action                               two-page policy contained a chart showing the number of
                                     bids by dollar amount, and housing and capital improvement
                                     issues to consider, such as Davis Bacon, bonding, and real
                                     estate acquisition. It did not contain a clear and accurate
                                     description of the methods and processes to be followed.

                                     Contrary to Federal regulations, AAF awarded a $92,726
                                     counseling services contract without benefit of free and open
                                     competition and a cost/price analysis.

                                     An AAF official explained they selected the contractor
                                     because it was a partner in the SHP grant application and
                                     covers the region where the program is located. The official
                                     assumed it was acceptable to contract solely with coalition
                                     partners involved with obtaining the grant, and did not



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Finding 1

                       believe they needed to follow Federal procurement
                       procedures.

                       Also, the contract did not define a sound and complete
                       agreement because it did not include adequate terms and
                       conditions. The contract included a broad description of
                       services and the yearly cost. There was no scope of services,
                       performance evaluation criteria, contract terms, provisions, or
                       specifications, as required by Federal regulations.

Unsupported contract   OMB Circular A-122, Cost Principles for Non-Profit
payments               Organizations, states that costs must be adequately
                       documented.

                       The contractor did not provide sufficient documentation to
                       support payments. The invoices included the period served
                       and the amount billed. However, there was no description of:
                       services provided, location where services were provided,
                       number of participants served, or a participant roster. As a
                       result, contract costs totaling $88,741 were unsupported.


AAF comments           AAF officials stated they did not believe a formal bidding
                       process was necessary because they used partners to carry
                       out the grant. They also said they requested clarification of
                       the issue from HUD, but had not received a response. AAF
                       officials said they met with three counseling agencies before
                       the grant application was submitted, and obtained prices for
                       providing the services. They explained that they negotiated
                       the price for the first year with a 3 percent increase for years
                       two and three. AAF officials said that in future contracts,
                       they would expand their procurement policies, better
                       document procurement decisions, and further define the
                       scope of services and evaluation criteria.

                       AAF officials said they obtained documentation supporting
                       the payments to the contractor. The documentation included
                       dates and topics for the groups, sign in sheets for group
                       attendance, counselors’ notes for each session, and pre and
                       post-tests for the clients.




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                                                                 Finding 1




OIG evaluation of   AAF did not maintain documentation of its attempts to
AAF comments        solicit counseling services from various providers prior to
                    submitting the grant application.

                    AAF did provide additional documentation for the $88,741
                    at the exit conference. AAF said they provided the
                    documentation to HUD monitors during their monitoring
                    visit.



Recommendations     We recommend that you:


                    1A.    Review the documentation provided at the exit
                           conference and determine whether the contract costs
                           totaling $88,741 are adequately supported.

                    1B.    Require AAF to revise its procurement policy to
                           comply with Federal requirements.

                    1C.    Monitor any ongoing or future grants to assure AAF
                           follows HUD requirements regarding competitive
                           bidding, documentation of procurement decisions,
                           and properly defined scope of services and evaluation
                           criteria.




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                                                                                   Finding 2


Level of Service Not Provided as Agreed
AAF did not provide the agreed level of service for transitional housing. AAF chose to vacate and
renovate available units during the grant period. During December 1999, only 15 of the agreed 32
units were available to house homeless families. AAF’s withdrawal of the units resulted in a
significant reduction in the level of service that violated HUD requirements.

Title 24 Code of Federal Regulations (CFR) 583.405(a)(1) states that a grant recipient may not make
significant changes to an approved program without prior HUD approval. Significant changes include
deletions in the types of activities approved for the program.

AAF’s technical submission stated it would use $400,000 of grant funds to purchase an apartment
complex. The property would be used to provide supportive housing for 32 families over the 3-year
grant period.


Occupancy levels                    We analyzed participant occupancy to determine whether AAF
                                    provided the agreed level of service. AAF’s rent rolls indicated
                                    participant occupancy steadily increased from May 1997 but did
                                    not reach 32 families until January 1999. Participant occupancy
                                    stayed at 32 families for 4 months, then steadily declined to 15
                                    families at December 1999. The participant occupancy rate
                                    during the grant’s third year (May 1999 through February 2000)
                                    was 67 percent.

Units withdrawn from                AAF officials stated the low occupancy rate was caused by the
program                             withdrawal of units from the program. An AAF official
                                    explained that they received another grant to renovate the units,
                                    and that they had a limited time to use the funding or lose it. As
                                    participants left the program, AAF closed the units to complete
                                    the renovations. AAF did not seek or obtain HUD approval to
                                    reduce the level of service.

                                    AAF’s failure to provide 32 units of transitional housing, by
                                    withdrawing them from the program, is a significant change that
                                    violates program regulations.


AAF comments                        AAF officials contend they did not make any significant change
                                    to their program. They contend they did not change the
                                    recipient, the project site, or make additions or deletions in the
                                    type of activities. The officials acknowledged they



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Finding 2

                    did not get written confirmation from HUD, but said HUD was
                    aware that units were off line. They explained that HUD staff
                    visited the site and saw the rehabilitation in progress, but that
                    HUD’s review letter dated December 6, 1999, did not contain
                    any findings. To avoid misunderstandings, they agreed to seek
                    written confirmations of any future program changes.


OIG evaluation of   We believe a major reduction in available units constitutes a
AAF comments        significant change that requires HUD approval. We agree
                    HUD’s review letter did not contain a finding concerning units
                    off line. However, we found no evidence that HUD was aware
                    of the extent to which units were taken offline.



Recommendations     We recommend that you:

                    2A.     Require AAF to house additional homeless families with
                            non-federal funds, to offset the reduced level of services.

                    2B.     Instruct AAF to obtain prior written HUD approval and
                            provide full disclosure of any significant changes to any
                            ongoing or future grants.

                    2C.     Monitor the level of services provided for any ongoing
                            or future grants.




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                                                                                  Finding 3


   Annual Performance Reports Not Accurate or
                   Complete
AAF did not provide accurate or complete information in its annual performance reports. AAF
did not monitor one goal and underreported other goals. As a result, HUD lacked information to
determine whether the grant activities were achieving intended results.

Title 24 CFR 84.51 requires recipients to submit performance reports that compare actual
accomplishments with the goals and objectives established for the period. The report should also
provide reasons why established goals were not met, if appropriate, and other pertinent
information. Title 24 CFR 583.300(g) states that each grant recipient must maintain any records
and make any reports that HUD may require within the time frame required.


Inaccurately reported               AAF listed six performance measures in its grant
goal                                application. One performance goal was that 50 percent of
                                    the adult substance abuser participants would remain clean
                                    and sober for 1-year after leaving the program.

                                    AAF reported in its annual progress report for the year
                                    ending April 1998 that 58 percent of substance users had
                                    remained clean and sober since entering the program. In its
                                    April 1999 annual progress report, AAF reported that 61
                                    percent of substance users had remained clean and sober.

                                    We determined that the reported information, however,
                                    represented substance abusers who remained clean and
                                    sober while still participating in the program. The program
                                    had a system in place to monitor participants with substance
                                    abuse problems while in the program, but not after they left
                                    the program.

                                    An AAF official explained they did not realize they had
                                    written the performance goal to track the participant’s
                                    progress after leaving the program.          The official
                                    acknowledged they had not monitored this goal as written.

Information not reported            AAF did not report information for three of the six goals.
for three goals                     The 3 goals were: (1) 50 percent of the adult participants
                                    will complete job training within 24 months, (2) 80 percent
                                    of adult participants will complete a 6-week parenting
                                    program, and (3) 95 percent of pre-school children will be
                                    immunized within 6 months of entering the program.



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Finding 3

                    An AAF official stated they did not include the goal
                    information because they did not think the goals fit the
                    categories shown on the annual progress report, and
                    assumed the goal information was not required. We
                    reviewed participant information and determined AAF
                    underreported its accomplishments.

                    HUD relies on the annual performance report in determining
                    grantee accomplishments. Accordingly, AAF needs to
                    exercise care and assure its reports are accurate and
                    complete.


AAF comments        AAF officials contended that the Annual Performance
                    Report did not require reporting on the objectives specified
                    in the grant application. They believed that question 25 on
                    the Annual Performance Report addressed overall goals in
                    three broad categories concerning residential stability,
                    increased skills or income, and greater self-determination.
                    They said they addressed those goals in the Annual
                    Performance Report, and did not receive HUD notice that
                    the other goals should have been reported on.


OIG evaluation of   The absence of feedback from HUD does not exempt AAF
AAF comments        from proper reporting. The goals were identified in the
                    grant application and 24 CFR 84.51 requires recipients to
                    submit performance reports that compare actual
                    accomplishments with goals.


Recommendations     We recommend that you:

                    3A.     Instruct AAF to accurately report its performance for
                            any ongoing or future grants. Any revised goals
                            should be discussed with and approved by HUD.

                    3B.     Monitor AAF’s reporting of grant accomplishments
                            for any ongoing or future grants.




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Management Controls
In planning and performing our audit, we obtained an understanding of the management controls
that were relevant to our audit objectives. We considered AAF’s management control systems in
order to determine our auditing procedures and not to provide assurance of the controls.
Management is responsible for establishing effective management controls. Management controls
include the plan of organization, methods, and procedures adopted by management to ensure that
its goals are met. Management controls include the processes for planning, organizing, directing
and controlling program operations. They include systems for measuring, reporting, and
monitoring program performance.


Relevant management                 We determined the following management controls were
controls                            relevant to our audit objectives.

                                       •   Management philosophy and operating style;

                                       •   Eligibility and support of grant activities;

                                       •   Management monitoring methods;

                                       •   Reliability of financial systems and reporting;

                                       •   Accounting for and maintaining control over program
                                           disbursements; and

                                       •   Measurement of program results.

                                    We obtained an understanding of AAF’s procedures and
                                    HUD requirements, assessed control risk, and performed
                                    various substantive tests of the controls.

Significant weakness                A significant weakness exists if management controls do not
                                    give reasonable assurance that the entity’s goals and
                                    objectives are met; that resource use is consistent with laws,
                                    regulations, and policies; that resources are safeguarded
                                    against waste, loss, and misuse; and that reliable data are
                                    obtained, maintained, and fairly disclosed in reports.

                                    Based on our review, significant weaknesses existed in the
                                    management controls we tested as discussed in the findings.




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Follow-Up On Prior Audits
This was the first Office of Inspector General audit of the Adopt-A-Family of the Palm Beaches, Inc.
grant operations.

Arthur J. Sinnott, Certified Public Accountant, completed the audit of the financial statements for the
fiscal year ended June 30, 1999. The report contained no findings related to the objectives of our
audit.




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                                                                                              Appendix A


Schedule of Unsupported Costs

                                                              Amount
                        Recommendation                      Unsupported1

                               1A                              $88,741




1
    Unsupported amounts do not obviously violate law, contract, policy or regulation, but warrant being contested
    for various reasons such as lack of satisfactory documentation to support eligibility.




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                               Appendix B


AAF Comments




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AAF Comments



                                  Adopt-A-Family of the Palm Beaches, Inc.
                                        Supportive Housing Grant
                                              FL14B960102
                                         West Palm Beach, Florida

       Draft Report

       Finding One: Level of Service Not Provided as Agreed

       24CFR 583.405 was sited in the finding. In reviewing this Adopt-A-Family did not make
       any significant changes to our approved program. We did not change the recipient, the
       site, additions or deletions in the types of activities listed in Sec. 533.100. When Adopt-
       A-Family purchased the 32 units they were occupied and the tenants had to be relocated
       under HUD’s relocation regulations. In addition, Adopt-A-Family applied for and
       received $424,286 in HOME funds (half loan and half grant) to renovate the apartments
       at SAFE II. When Jack Johnson, Ann Chavis, Rafael Portuondo, La Vora Bussey and
       two other members of the Florida State Office, Southeast/Caribbean came for a site visit
       on September 21,1999 they viewed two of the renovated units. Terry Bozarth, executive
       director, explained that a HOME grant/loan had been secured to rehab the units and that
       each unit would receive new flooring, new air conditioning, new kitchens and new
       vanities, toilets and sinks in the bathrooms. Ms Bozarth further explained that in order to
       have room to move families around during the rehab units were not being filled when
       families left the program. The field office staff viewed two renovated units and saw the
       rehab in progress. In addition to the executive director, Wendy Tippett and Randy
       O’Neal Hardin of the Adopt-A-Family staff were present during this meeting. While
       Adopt-A-Family did not get written confirmation that the Florida State Office,
       Southeast/Caribbean knew the units were off line. 24CFR 583.405 does not state that
       permission must be in writing. But in the future to avoid any misunderstanding, Adopt-
       A-Family will get written confirmation from the Florida State Office,
       Southeast/Caribbean of any program changes. Attachment I

       Finding Two: Annual Performance Reports not Accurate or Complete

       In the year one Annual Performance Report (APR) Adopt-A-Family reported on three
       objectives. In the APR, Question 25 Overall Goals says list your objective(s) for each
       of the goals listed below, describe your progress in meeting the objective(s) and
       specify your objective for next year. The three goals are:
               a. Residential Stability
                b. Increased skills or Income
                c. Greater Self-determination

       Adopt-A-Family reported on the three objectives that related to the three APR goals,
       although all six objectives in the grant proposal were tracked. When the APR was
       submitted it was accepted so Adopt-A-Family was unaware that the other objectives
       should have been reported on. The Inspector General’s draft audit report reflected




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                                                                                          AAF Comments


     Adopt-A-Family exceeded its objectives on the three objectives that were
     unreported.

     The objective that 50% of substance abuser clients will remain clean and sober for
     one year after leaving the program was measured based on the clients who had left
     the program, but one year had not passed. At the end of the first year Adopt-A-
     Family realized the problem of measuring participants sobriety after leaving other
     than self-reporting. Therefore, that objective was changed in the APR for the year
     two. Adopt-A-Family did monitor all six objectives outlined in the grant. The APR
     asks what are your objectives for the following year in the areas of residential
     stability, increased skills or income and greater self-determination. Adopt-A-
     Family responded by naming new goals for year two and three. The APR does not
     state that you should be reporting on your objectives from your grant application in
     year two or three. Attachment II


     Finding Three: Inadequate Procurement Action

     1. All procurement transactions shall be conducted in a manner to provide the
     maximum extent practical, open and free competition (24 CFR 84.43)
     Adopt-A-Family did not believe that a formal bidding process was necessary since its
     partners experience was used to show capacity in the SHP grant application. Adopt-A-
     Family has asked for clarification on this issue in a letter dated April 26, 2000 to the
     Florida State Office, Southeast/Caribbean. The executive director of Adopt-A-Family
     has been told the matter has been referred to HUD Headquarters. To date Adopt-A-
     Ffamily has not received an answer concerning this issue. Attachment III

     The executive director of Adopt-A-Family, Terry Bozarth, did meet with the following
     agency directors regarding the mental health counseling services during May 1996 before
     the SHP grant application was submitted. Robert Bonzzone, executive director, of the
     Comprehensive Alcohol Rehabilitation Program stated that CARP would only do the
     substance abuse sessions. CARP’s cost for the first year was $45,000. Ms Bozarth
     also met with Joe Amato, executive director of the Western Mental Health Center. Mr.
     Amato quoted a price for the first year of $45,000, but stated the project was not going to
     be located in the Western Mental Health Center catchment (service delivery) area so
     Western Mental Health Center could not provide the mental health counseling services.
     I then spoke to Carl Morgan, South County Mental Health Center and he also quoted a
     price of $45,000. The project was to be located in the South County Mental Health
     Center catchment area and South County Mental Health Center was willing to provide
     the mental health counseling sessions. Adopt-A-Family was able to further negotiate a
     price of $30,000 for the first year with a 3% increase for year two and three with the
     South County Mental Health Center. Adopt-A-Family believes it procured an excellent
     price for the mental health counseling services.

     2. All recipients shall establish written procurement procedures. These procedures
     shall provide for, among other things a clear and accurate description of the




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AAF Comments



       technical requirements for the service to be procured, and a description of technical
       requirements in terms of functions to be performed or performance required,
       including the range of acceptable characteristics or minimum acceptable standards
       (24 CFR 84.44).
        Adopt-A-Family has procurement procedures in place but is willing to expand these
       procurement policies to satisfy the auditor.

       3. A cost analysis shall be made and documented in the procurement files in
       connection with every procurement action (24 CFR 84.45).
       The executive director of Adopt-A-Family, Terry Bozarth, did meet with the following
       agency directors regarding the mental health counseling services during May 1996 before
       the SHP grant application was submitted. Robert Bonzzone, executive director, of the
       Comprehensive Alcohol Rehabilitation Program stated that CARP would only do the
       substance abuse sessions. CARP’s cost for the first year was $45,000. Ms Bozarth also
       met with Joe Amato, executive director of the Western Mental Health Center. Mr.
       Amato quoted a price for the first year of $45,000, but stated the project was not going to
       be located in his catchment (service delivery) area so Western Mental Health Center
       could not provide mental health counseling services. I then spoke to Carl Morgan, South
       County Mental Health Center and he also quoted a price of $45,000. The project was to
       be located in the South County Mental Health Center catchment area and South County
       Mental Health Center was willing to provide the mental health counseling sessions.
       Adopt-A-Family was able to negotiate a price of $30,000 for the first year with a 3%
       increase for year two and three. In the future Adopt-A-Family will make note of these
       meetings and prices in the procurement file.

       4. The recipient shall include provisions to define a sound and complete agreement in
       all contracts (CFR 84.48)
       Adopt-A-Family had a signed contract with South County Mental Center stating the
       number of groups to be held each week, the topics to be covered with program outlines
       and the cost per year. In addition, pre and post-tests of participating clients were used as
       the evaluation criteria. Adopt-A-Family will further define scope of services and
       evaluation criteria in any future contracts.

       OMB Circular A-122, Cost Principles for Non-Profit Organizations, states that costs
       must be adequately documented.
       Adopt-A-Family does have written documentation of the counseling sessions held.
       In addition copies of the clients pre and post- tests are in the client files. When the
       Office of the Inspector General auditor (Fred) was here Adopt-A-Family expressed
       concern about the confidentiality of clients participating in mental health counseling
       groups. After the issue of client confidentiality was resolved Adopt-A-Family had
       the mental health documentation available but the Office of the Inspector General
       auditor (Fred) did not request it. When Mr. Tony Bailey, auditor for the Inspector
       General came for the exit visit on September 20, 2000, the records were made available
       to him. The following summary was also made available to him: Mr. Bailey suggested t
       hat the Florida State Office, Southeast/Caribbean also review the information when it




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         came to audit the next day. In addition to the documentation the following information
         was given to Mr. Bailey and the Florida State Office staff.

                 The total amount paid to South County Mental Health Center for the three-year
                 contract was $88,741.

                 There were 140 sessions with 264 counseling hours. A total of 542 clients
                 attended the sessions.

·                The average attendance per counseling session was 4

·                The average cost per client hour was $84.03.

         Five staff members of the Florida State Office, Southeast/Caribbean of HUD came
         to audit on September 21 and 22, 2000. They reviewed the documentation for the mental
         health counseling groups that were held during the three years of the contract with South
         County Mental Health Center. The documentation included dates and topics for the
         groups, sign in sheets for group attendance, counselors’ notes for each session and pre
         and post-tests for the clients attending the groups. All this information was available
         during the Inspector General’s audit but was not requested.




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                                                                             Appendix C


Distribution
Executive Director, Adopt-A-Family of the Palm Beaches, Inc.
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 and Intergovernmental Relations, J (Room 10120)
Senior Advisor to the Secretary, Office of Public Affairs, S, (Room 10132)
Deputy Assistant Secretary of Administrative Services/Director of Executive Secretariat, AX
    (Room 10139)
Director of Scheduling and Advance, AL (Room 10158)
Counselor to the Secretary, S (Room 10234)
Deputy Chief of Staff, S (Room 10226)
Deputy Chief of Staff for Operations, S (Room 10226)
Deputy Chief of Staff for Programs and Policy, S (Room 10226)
Director, Office of Special Actions, AK (Room 10226)
Deputy Assistant Secretary for Public Affairs, W (Room 10222)
Special Assistant for Inter-Faith Community Outreach, S (Room 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)
Director, Office of Federal Housing Enterprise Oversight, O (9th Floor Mailroom)
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)
Assistant Deputy Secretary for Field Policy and Management, SDF (Room 7108)
Government National Mortgage Association, T (Room 6100)
Assistant Secretary for Fair Housing and Equal 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 Equal Employment Opportunity, U (Room 5128)
Director, Office of Departmental Operations and Coordination, I (Room 2124)
Chief Financial Officer, F (Room 2202)
Director, HUD Enforcement Center, X, 1250 Maryland Avenue, SW, Suite 200
Director, Real Estate Assessment Center, X, 1280 Maryland Avenue, SW, Suite 800
Director, Office of Multifamily Assistance Restructuring, Y, 1280 Maryland Avenue, SW, Suite
4000




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Distribution

Deputy Chief Financial Officer for Finance, FF (Room 2202) (2)
Director, Office of Budget, FO (Room 3270)
Secretary's Representative, 4AS
State Coordinator, Florida State Office, 4DS
Director, Office of Community Planning and Development, 4DD
Audit Liaison Officer, 3AFI
Audit Liaison Officer, Office of Public and Indian Housing, PF (Room P8202)
Departmental Audit Liaison Officer, FM (Room 2206)
Acquisitions Librarian, Library, AS (Room 8141)
Counsel to the IG, GC (Room 8260)
HUD OIG Webmanager-Electronic Format Via Notes Mail (Cliff Jones@hud.gov)
Public Affairs Officer, G (Room 8256)
Director, Housing and Community Development Issue Area, U.S. GAO, 441 G Street N.W.,
  Room 2474, Washington DC 20548 ATTN: Judy England-Joseph
The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs,
  United States Senate, Washington DC 20510-6250
The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs,
  United States Senate, Washington DC 20510-6250
The Honorable Dan Burton, Chairman, Committee on Government Reform,
  United States House of Representatives, Washington DC 20515-6143
The Honorable Henry A. Waxman, Ranking Member, Committee on Government Reform,
  United States House of Representatives, Washington, DC 20515-4305
Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212,
  O'Neil House Office Building, Washington, DC 20515-6143
Steve Redburn, Chief, Housing Branch, Office of Management and Budget, 725 17th Street, NW,
  Room 9226, New Executive Office Bldg., Washington, DC 20503
Sharon Pinkerton, Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, Drug
  Policy and Human Resources, B373 Rayburn House Office Bldg., Washington, DC 20515




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