oversight

Newport Resident Council, Inc. Newport, Rhode Island

Published by the Department of Housing and Urban Development, Office of Inspector General on 2002-04-30.

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

     AUDIT REPORT




NEWPORT RESIDENT COUNCIL, INC.

   NEWPORT, RHODE ISLAND

          2002-BO-1003

         APRIL 30, 2002



   OFFICE OF AUDIT, NEW ENGLAND
      BOSTON, MASSACHUSETTS
                                                                  Issue Date
                                                                          April 30, 2002
                                                                 Audit Case Number
                                                                          2002-BO-1003




TO: Donna Ayala, Director, Office of Public Housing, 1APH



FROM:     Barry L. Savill, District Inspector General, Office of Audit, 1AGA


SUBJECT:       Newport Resident Council, Inc.
               Newport, Rhode Island

As requested by your office, we performed an audit of the Newport Resident Council,
Inc.,(NRC). The overall objective of our audit was to determine if the NRC was administering
its federal funds in an efficient, effective and economical manner and in compliance with the
terms of its federal contracts and regulations. The NRC received $195,275 from the Housing
Authority of the City of Newport, Rhode Island through the Comprehensive Grant Program and
Tenant Services Program between August 1, 1999 and January 31, 2001. The NRC also received
$70,000 from the City of Newport, Rhode Island through the Rhode Island Small Cities
Community Development Block Grant for the Employment Readiness Program.

Our audit disclosed the NRC did not establish accountability over these funds. Specifically, the
NRC failed to maintain adequate accounting records and monitoring procedures resulting in
$42,887 in questionable costs. These deficiencies occurred because the NRC Board of Directors
did not effectively manage and account for its federal funds.

Within 60 days, please provide us a status report for each recommendation listing: (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
because of this audit.

If you have any questions, please contact our office at (617) 994-8380.
Management Memorandum




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2002-BO-1003              Page ii
Executive Summary
As requested by your office, we performed an audit of the Newport Resident Council, Inc.
(NRC). The overall objective of our audit was to determine if the NRC was administering all
federal funds it received in an efficient, effective and economical manner and in compliance with
the terms of its federal contracts and regulations. The NRC received funds from the Housing
Authority of the City of Newport, Rhode Island (Authority) through the Comprehensive Grant
Program and Tenant Services Program. The NRC also received funds from the City of Newport,
Rhode Island (City) through the Rhode Island Small Cities Community Development Block
Grant for the Employment Readiness Program.



                                     Our audit disclosed the NRC did not establish
 Audit Results                       accountability over all federal funds it received from the
                                     Authority and City, including Comprehensive Grant
                                     Program (CGP), Tenant Services Program and Employment
                                     Readiness Program funds, which as of January 31, 2001
                                     totaled $265,275. Specifically, the NRC failed to maintain
                                     adequate accounting and monitoring records over
                                     Comprehensive Grant Program, Tenant Services Program
                                     and Employment Readiness Program funds provided by the
                                     Authority and City. We also noted $42,887 in questionable
                                     costs. The deficiencies occurred because the NRC Board of
                                     Directors did not effectively manage and account for its
                                     federal funds.

                                     Since the NRC received CGP and Tenant Services Program
                                     funds from the Authority, we recommend that you require
                                     the Authority to ensure that the NRC reimburses the
                                     Authority for all ineligible expenditures made from federal
                                     funds and that appropriate administrative action is taken
                                     against NRC individuals who improperly used federal
                                     funds.

                                     We also recommend that you require the Authority to
                                     ensure that the NRC evaluates the reasonableness and
                                     eligibility of all expenditures charged to the Comprehensive
                                     Grant Program and Tenant Services Program. Lastly, we
                                     recommend that you require the Authority to ensure that the
                                     NRC establishes fiscal accountability and effective
                                     management controls in regards to the use of federal funds.




                                         Page iii                                   2002-BO-1003
Executive Summary


                    We discussed the findings in this report with the Authority
 Findings and       and the NRC staff and Board members during the course of
 Recommendations    the audit. On February 26, 2002, we provided the
 Discussed          Authority and NRC a copy of the draft audit report for
                    comment. We received the NRC’s written response on
                    March 15, 2002 and the Authority’s response on March 25,
                    2002. We included their pertinent comments in the Finding
                    section of this report. The NRC’s full response is included
                    in Appendix C and the Authority’s full response is included
                    in Appendix D.




2002-BO-1003            Page iv
Table of Contents


Management Memorandum                                                  i



Executive Summary                                                    iii



Introduction                                                          1



Findings
   1.   Accountability for Federal Funds Not Established             7



Management Controls                                                 13



Appendices
   A Schedule of Questioned Costs                                   15


   B Questionable Credit Card Charges                               17


   C Questionable Check Disbursements                               19

   D Auditee Comments Newport Resident Council, Inc.                21

   E Auditee Comments – Newport Housing Authority                   24


   F Distribution                                                   27




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Table of Contents




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2002-BO-1003          Page vi
Introduction
The Newport Resident Council, Inc. (NRC) is an organization of and for residents of the public
housing developments within the Housing Authority of the City of Newport, Rhode Island
(Authority). As of May 17, 2001, the Authority had six developments with 1,096 units and 3,451
residents. The NRC’s mission is to provide programs and services to maximize residents’
dignity, respect, standard of living and quality of life.

The Board of Directors is the governing body of the NRC. Any resident of a development
managed by the Authority may join the NRC. The residents elect the fourteen members of the
Board of Directors, which include the President of the Board and Development Representatives.
The minimum number of Board members allowed is seven. The Board is responsible for
overseeing the operation of the NRC and appointing an Executive Director who runs the day-to-
day operations of the NRC. As of the time of our review, the NRC had no Executive Director
and had effectively ceased operations.

During the period of our review, NRC received funding from the Housing Authority, the City of
Newport, RI and several non-federal sources.



                         Funding for Newport Resident Council

                                                              Newport Housing Authority Tenant
                                                              Services Program 1%




     Newport Housing                                                   City of Newport
        Authority                                                      Employment
   Comprehensive Grant                                                 Readiness Program
      Program 67%                                                      25%




                                                           Non-Federal sources 7%




                                        Page 1                                   2002-BO-1003
Introduction




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2002-BO-1003               Page 2
                                                                                        Introduction


NRC Contracts with the Authority

The Authority used its Comprehensive Grant Program (CGP) to fund a contract with the NRC.
Under this contract NRC would provide services to low-income residents for the period of
August 1,1999 to July 31, 2000. Tasks under this contract included:

   Ø   outreach and organizing;
   Ø   computer training;
   Ø   job development training; and
   Ø   workshops and seminars on skills training and development.

NRC and the Authority entered into a one-year contract for August 1, 1999 and July 31, 2000 for
$130,000 with an additional $12,133 for the purchase of laptop computers and $3,942 for other
tenant-related services. When this contract expired, on July 31, 2000, the Authority did not enter
into another contract because the Authority was not satisfied with the NRC’s performance.
Although the contract had expired, the Authority agreed to continue funding NRC if the NRC
could: (1) document their expenses and (2) demonstrate their achievement of the specified goals
and objectives stated in the initial contract. Using funding from the Comprehensive Grant
Program and the Tenant Services Program, the Authority provided another $49,200 to the NRC
between August 1, 2000 and January 31, 2001.

NRC also contracts with the City

The City of Newport used its Small Cities Community Development Block Grant to fund a $70,000
contract with the NRC for job training under the Employment Readiness Program. The
Employment Readiness Program exists to fill the gap left by traditional training programs that are
not prepared to address many of the social, economic and educational problems impacting
disadvantaged individuals and their families. NRC was contractually required to assist forty to fifty
residents of the Authority and an additional ten to twenty low-income individuals from subsidized
housing developments in the area. During the contract’s term of August 1, 1999 to July 31, 2000,
NRC would teach various skills to residents such as:

   Ø   shaking hands in the business world,
   Ø   being responsible and dependable,
   Ø   dressing in appropriate business attire,
   Ø   conducting interviews,
   Ø   writing a resume,
   Ø   utilizing a telephone professionally
   Ø   using a computer

Non federal funding.

NRC received almost $20,000 from non-HUD sources including national non-profit organizations,
state-wide non-profit organizations and local fund raising efforts.


                                            Page 3                                     2002-BO-1003
Introduction


Audit discovers problems

NRC hired an independent public accountant to conduct an audit of its operations. Dated June 30,
2000, the audit report identified operational problems such as:

   Ø personal charges made to NRC credit cards,
   Ø loans to employees and board members, and the
   Ø absence of NRC credit card and travel policies.

In January 2001, a second independent audit was scheduled by the Authority in response to
allegations of credit card abuse by NRC personnel published in local newspapers. The NRC
refused to provide records to the Authority subsequent to July 31, 2000. The NRC believed that the
Authority had no justification for reviewing its records after July 31, 2000 because the contract
between the Authority and the NRC had expired. As a result, the Authority has refused to provide
additional funds to the NRC until an audit is completed.

In February 2001, the Massachusetts Office of Public Housing requested that our office audit the
NRC’s books and records.



                                     The overall objective of our audit was to determine if the
 Audit Objectives                    NRC was administering all federal funds it received in an
                                     efficient, effective and economical manner and in
                                     compliance with the terms of its federal contracts and
                                     regulations.

                                     To accomplish our audit objective, we:
 Audit Scope and
 Methodology                         Ø Obtained and reviewed the NRC’s contracts with the
                                       Housing Authority of the City of Newport, Rhode Island
                                       and the City of Newport, Rhode Island, and federal
                                       regulations.

                                     Ø Obtained and reviewed the independent audit report
                                       dated June 30, 2000;

                                     Ø Reviewed the NRC’s financial records of cash receipts
                                       and disbursements;

                                     Ø Selected and reviewed a sample of 119 out of 502 check
                                         disbursements made between August 1999 through
                                         January 2001 to determine whether items were
                                         reasonable and necessary under the contract and were
                                         adequately supported. We determined that a non-

2002-BO-1003                              Page 4
                                                    Introduction

    representational sample was appropriate for testing the
    allegations.

Ø Reviewed petty cash account transactions between August
  1999 and January 2001 to determine the nature and
  reasonableness of expenditures;

Ø Determined whether NRC staff and members of the Board of
  Directors have repaid all loans from NRC funds identified
  during our audit period;

Ø Reviewed the NRC's credit card policies and procedures to
  determine if policies and procedures are reasonable, adequate
  and comply with federal regulations governing the funding;

Ø Reviewed all credit card charges between August 1999 and
  January 2001 to determine if the charges were reasonable and
  necessary for the operation of the NRC and in compliance
  with the contracts and federal regulations;

Ø Evaluated the reasonableness and eligibility of all out-of-state
  travel costs charged to HUD programs between August 1999
  and January 2001;

Ø Inventoried the laptop computer equipment purchased with
  HUD funds;

Ø Held discussions with NRC staff, the President of the Board
  of Directors, the NRC’s independent auditors, the NRC’s
  attorney, and the HUD Massachusetts State Office of Public
  Housing staff.

We conducted our audit at the NRC’s office located in Newport,
Rhode Island. Our audit covered the period between August 1,
1999 and January 31, 2001. Where appropriate, the review was
extended to include other periods. Audit work was performed
from February 2001 through March 2001.

Our audit was conducted in accordance with generally accepted
government auditing standards.




     Page 5                                         2002-BO-1003
Introduction




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2002-BO-1003               Page 6
                                                                                          Finding 1


                      Accountability for Federal
                       Funds Not Established
The Newport Resident Council, Inc. (NRC) did not establish accountability for HUD funds. The
NRC failed to maintain adequate accounting records and failed to perform their contractual
obligation. As a result, the NRC is unable to assure either the Authority or the City that charges to
its programs are reasonable, eligible and effectively utilize limited federal funds. These
deficiencies occurred as a result of the NRC’s Board of Directors’ inability to effectively manage
and account for its federal funds. Between August 1999 and January 2001, NRC incurred
questionable costs of $42,887.



                                      The NRC’s contract with the Authority requires NRC to
 Adequate Financial                   comply with all applicable federal and state financial audit
 Management System                    requirements pertaining to non-profit organizations. The
 Required                             NRC’s contract with the City also requires that the NRC
                                      comply with federal regulations including OMB Circular
                                      A-110 Grants and Agreements with Institutions of Higher
                                      Education, Hospitals, and Other Non-Profit Organizations.

                                      In Subpart C paragraph 21 (b) 2, 3, and 7, OMB Circular A-
                                      110 states that recipients’ financial management systems
                                      shall provide for:

                                      (2) Records that identify adequately the source and
                                          application of funds for federally sponsored activities.
                                          These records shall contain information pertaining to
                                          Federal awards, authorizations, obligations, unobligated
                                          balances, assets, outlays, income, and interest . . .

                                      (3) Effective control over and accountability for all funds,
                                          property, and other assets. Recipients shall adequately
                                          safeguard all such assets and assure that they are used
                                          for authorized purposes . . .

                                      (7) Accounting records including cost accounting records
                                          that are supported by source documentation.

                                      NRC’s accounting records were not accurate because
                                      expenses were not accurately posted to the accounting
                                      records. The NRC received $265,275 in HUD funds and
                                      almost $20,000 from various other non-HUD sources

                                           Page 7                                      2002-BO-1003
Finding 1


                             including national non-profit organizations, state-wide non-
                             profit organizations and local fund raising efforts. Although
                             the NRC received $285,275 between August 1, 1999 and
                             January 31, 2001, it expensed $292,945 or $7,670 more than
                             it received.


                                                                     Amount
                                                            Amount Expensed
                             Funding Source                 Funded on Books Difference
                             Comprehensive Grant Program    $191,333 $229,084 ($37,751)
                             Tenant Services                  $3,942     $4,911    ($969)
                             Employment Readiness Program    $70,000    $51,513   $18,487
                             non-federal sources             $20,000     $7,437   $12,563
                             Total                          $285,275   $292,945   ($7,670)


                             Between August 1999 and January 2001, NRC charged
                             $41,938 on their credit cards. During this same period, it
                             expensed $20,629, posted $13,882 to their Accounts
                             Payable and did not account for the remaining $7,427.

                             However, when we manually calculated the amount of
                             credit card charges not recorded as Accounts Payable
                             between November 2001 and January 2001, we found that
                             $7,591 was not recorded. NRC personnel were unable to
                             reconcile or explain the difference between the $7,427 and
                             $7,591.

                             Between August 1999 and January 2001, NRC paid
 Questionable Expenditures   $42,887 in questionable expenditures. Of this amount
 Paid                        $26,342 represented credit card charges (Appendix B) and
                             $16,545 represented check disbursements (Appendix C).

                             OMB Circular A-122, Cost Principles for Non-Profit
                             Organizations advises that allowable costs must be
                             reasonable for the performance of the award, allocable to
                             the award and adequately documented. To determine the
                             reasonableness of a given cost, consideration shall be given
                             to whether the cost is of a type generally recognized as
                             ordinary and necessary for the operation of the organization
                             or the performance of the award.




2002-BO-1003                      Page 8
                                                                              Finding 1


                            The $26,342 of questionable credit card charges included
Used Credit Cards for       personal expenses of the NRC’s former Executive Director
Personal Expenses           such as meals, hotel lodging, flowers, grocery, alcohol, and
                            jewelry. NRC also made purchases for events such as staff
                            birthdays, going-away parties, Secretary’s Day, Valentine’s
                            Day, and the wedding of a relative of a Board member.
                            There was no supporting documentation available to
                            evidence that any of the $26,342 in credit card charges were
                            necessary for the performance of NRC’s federally funded
                            programs.      Attachment A lists these questionable
                            expenditures.

                            The $16,545 of questionable disbursements by check
Questionable Check          included cash bonuses to the NRC’s former Executive
Disbursements               Director, NRC staff members, volunteers, and members of
                            the Board of Directors; and loans to NRC staff and Board
                            members. In addition, proper supporting documentation
                            was not available for services such as cleaning, instructor
                            fees, and bookkeeping, as well as, trips made by NRC staff,
                            and meal reimbursements. Attachment B shows a listing of
                            these questionable expenditures.

                            Prior to August 2000, the NRC did not have a credit card
Credit Card Policy not in
                            policy. When the NRC promulgated a credit card policy in
Accordance with Federal
                            August 2000, it contradicted federal regulations by stating,
Regulations
                            in part:

                              Purchases of items for personal use, which are of a non-
                              business nature, is not allowed without direct
                              authorization of the Board of Directors or the Executive
                              Director.

                            OMB Circular A-122, Attachment B, paragraph 18
                            specifically states that: costs of goods or services for
                            personal use of the organization's employees are
                            unallowable regardless of whether the cost is reported as
                            taxable income to the employees. NRC’s policy should be
                            revised to prohibit this practice under all circumstances.

                            The NRC issued three credit cards: (1) NRC’s former
Accrual of Credit Card      Executive Director, (2) President of the Board of Directors,
Finance Charges             and (3) the Office Manager. Between August 1999 and
                            January 2001, $41,938 was charged to these cards. The
                            unpaid balance in January 2001 totaled $8,055. However,
                            the NRC bank account as of February 2001 showed only

                                Page 9                                     2002-BO-1003
Finding 1


                           $3,497 in funds available, which is approximately $4,500
                           less than the credit card balance. With no active funding
                           sources, the NRC will continue to needlessly incur interest
                           expenses on the credit cards.

                           Prior to August 2000, the NRC did not have a travel policy.
 Travel Policies Not       However, subsequent to August 2000 when NRC
 Enforced                  developed a policy they did not follow or enforce their
                           policy. Our review disclosed that NRC employees received
                           travel advances, but did not reconcile actual travel costs
                           with the advances. As a result, NRC staff used credit cards
                           to pay travel-related expenditures for which they had
                           previously received an advance. NRC did not maintain
                           adequate documentation to identify the traveler, identify the
                           purpose of the trip, or compute actual expenditures less any
                           travel advances. Supporting documentation typically
                           consisted of either a check requisition form or a memo
                           from the NRC’s former Executive Director regarding the
                           trip.

                           NRC’s Board of Directors was aware that the NRC’s
 Inadequate Oversight by   former Executive Director was using NRC resources for
 Board                     personal expenses. In October 2000, the Board of Directors
                           discussed the significant amount of personal charges on the
                           credit cards with the NRC’s former Executive Director and
                           requested that he sign a repayment agreement. According
                           to the President of the Board of Directors, the former
                           Executive Director acknowledged to the Board that he used
                           the credit cards for personal reasons and he refused to sign
                           the repayment agreement. Although the Board was aware
                           of the personal charges and the former Executive Director’s
                           refusal to sign a repayment agreement, the Board did not
                           remove the credit cards from the former Executive
                           Director’s possession until January 2001. Failure to close
                           the credit card accounts allowed the former Executive
                           Director to charge an additional $6,880 in questionable
                           costs after October 2000.




2002-BO-1003                   Page 10
                                                                           Finding 1


                       As a result of the lack of accountability, the NRC is unable to
 Improvements Needed   assure the Authority and HUD that its expenditures are
                       reasonable, eligible, and an effective use of limited Federal
                       funds. The NRC Board of Directors needs to ensure:

                       Ø accountability over all Federal funds,

                       Ø policies and procedures are appropriate, implemented,
                         and comply with Federal regulations.



Auditee Comments       Authority and NRC Comments

                       As the NRC is funded by HUD through the Authority, both
                       the Authority and the NRC were given the opportunity to
                       comment on the report. A complete text of the Authority’s
                       response is available in Appendix B and a complete text of
                       the NRC’s response is available in Appendix C.

                       Both the Authority and the NRC advise that they have
                       implemented a system to avoid re-occurrence of the
                       questionable expenditures. Both the NRC and the Authority
                       believe that individuals should be held accountable for their
                       actions. Both the Authority and the NRC contend that they
                       will be unable to determine the eligibility of expenditures
                       with the available records when professional auditors are
                       unable to determine eligibility. Both the Authority and NRC
                       contend that the NRC has no substantial source of funds
                       other than HUD funds therefore reimbursement from non-
                       federal funds is not practical.

                       Additional Comment by the Authority

                       The Authority noted that it made the request to HUD for an
                       audit to assist with dealing with stone-walling of the former
                       Executive Director and it continues to request HUD’s
                       assistance to impose appropriate sanctions as recommended.

                       Additional Comment by the NRC

                       The NRC contends that the Board instructed the employees
                       to no longer use the credit cards when it learned of
                       questionable expenditures.  The NRC’s response also


                           Page 11                                      2002-BO-1003
Finding 1


                    contends that the Board had no reason to believe its
                    instructions would not be followed.


OIG Evaluation of   The new system to avoid re-occurrence of questionable
Auditee Comments    expenditures needs to be evaluated by HUD to ensure
                    recurrence is avoided.        Individuals should be held
                    accountable for their actions. Expenditures whose eligibility
                    cannot be proven should be reimbursed to the program.
                    NHA and NRC should pursue their plan to obtain
                    reimbursement from individuals. Repayment of remaining
                    funds should be discussed with HUD.

                    NRC contends that it did not know that its instructions would
                    not be followed. The existence of questionable expenditures
                    gives reason to believe that instructions would not be
                    followed.



Recommendations     We recommend that you require the Authority to:

                    1A.      Require the NRC to reimburse the Authority for all
                             ineligible costs.

                    1B.      Impose appropriate administrative sanctions against
                             individuals who improperly used federal funds.

                    1C.      Require the NRC to provide your staff
                             documentation of the amount, the eligibility and the
                             reasonableness of all expenditures

                    1D.      Require the Authority to ensure that NRC
                             establishes fiscal accountability and effective
                             management controls to assure that Federal funds
                             are used effectively and efficiently.

                    1E.      Require the NHA to monitor the performance of its
                             contractors to ensure that all expenditures are
                             reasonable for the performance of the contract and
                             accurately reflect expenditures necessary to the
                             contract.




2002-BO-1003              Page 12
Management Controls
In planning and performing our audit, we considered management controls of the Newport
Resident Council, Inc. (NRC) as specifically related to funding provided by the Housing
Authority of the City of Newport, Rhode Island (Authority) and by the City of Newport, Rhode
Island (City). We evaluated management controls to determine our auditing procedures to be
used, and not to provide assurance on management controls.

Management controls consist of a plan or organization and methods and procedures adopted by
management to ensure that resource use is consistent with laws, regulations, and policies; that
resources are safeguarded against waste, loss, and misuse; and that reliable data is obtained,
maintained, and fairly disclosed in reports.



                                    We determined the following management controls were
 Relevant Management
                                    relevant to our audit objectives:
 Controls
                                    Ø Financial controls over program funding

                                    Ø Management controls over program expenditures

                                    Ø Policies and procedures over travel and credit card
                                      usage

                                    A significant weakness exists if management controls do
 Assessment Results                 not give reasonable assurance that resource use is
                                    consistent with laws, regulations, and policies; that
                                    resources are safeguarded against waste, loss, and misuse;
                                    and that reliable data is obtained, maintained, and fairly
                                    disclosed in financial statements and reports.

                                    Our review identified significant weaknesses at the NRC
 Significant Weaknesses             including their lack of accountability over HUD funds
                                    received from the Authority and the City.         Specific
                                    weaknesses were identified in all of the management control
                                    areas discussed above. These weaknesses are described in
                                    the Finding section of this report.




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Management Controls




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2002-BO-1003           Page 14
                                                                     Appendix A

Questioned Costs


Finding 1                                                           Amount

Questionable Disbursements via check, Details in Appendix B         $26,342

Questionable Disbursements via credit card, Details in Appendix C   $16,545


Total                                                               $42,887




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Appendix A




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2001-BO-1003    Page 16
                                                                             Appendix B

Questionable Credit Card Charges


Category                                                                   Amounts
Cash Advances                                                             $ 9,093
Local Meals                                                                 3,925
Local Hotels                                                                1,975
Hotel charges for out-of-state travel (includes movies, phone, parking)     1,689
Department Store Purchases                                                  1,542
Other Purchases                                                             1,158
Meals for out-of-state travel                                               1,078
Finance Charges/Late Payment Charges/Cash Advance Fees                        974
Cash Advances for out-of-state travel (including ATM fees)                    921
Jewelry Store Purchases                                                       842
Grocery Store Purchases                                                       701
Transportation costs for out-of-state travel                                  501
Video Store Purchases                                                         392
Pharmacy Purchases                                                            344
Liquor Store Purchases                                                        303
Merchandise/Department Store Purchases for out-of-state travel                243
Other Purchases for out-of-state travel                                       207
Music Store Purchases                                                         189
Flower Shop Purchases                                                          81
Toy Purchases                                                                  75
Alcoholic Beverages for out-of-state travel                                    45
Convenience Stores/Gas Station Purchases                                       34
Gas for out-of-state travel                                                    30

Totals                                                                    $26,342




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Appendix B




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2002-BO-1003    Page 18
                                                                          Appendix C

Questionable Check Disbursements




Description                                                                 Amount
1999 Bonus to Executive Director                                            $ 5,000
Loans to NRC staff and Board Members                                          2,500
Payments for Services (bookkeeping, cleaning, instructors, landscaping)       2,480
Trips made by NRC staff and food reimbursements                               2,070
2000 Christmas bonus to Board Members ($675)and volunteers ($400)             1,075
Payments for volunteer services                                                 760
1999 Christmas bonus to Board Members ($500) and volunteers ($250)              750
1999 Christmas bonus to NRC staff members                                       700
Flowers                                                                         609
2000 Christmas bonus to NRC staff members                                       450
Charitable contribution                                                         100
Pantyhose                                                                        26
NRC staff member parking ticket                                                  25

Total                                                                       $16,545




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Appendix C




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2002-BO-1003               Page 20
                                           Appendix D

Auditee Comments
          Newport Resident Council, Inc.




                    Page 21                2002-BO-1003
Appendix D




2002-BO-1003   Page 22
          Appendix D




Page 23   2002-BO-1003
                                       Appendix E

Auditee Comments
           Newport Housing Authority




                   Page 24             2002-BO-1003
          Appendix E




Page 25   2002-BO-1003
Appendix E




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2002-BO-1003              Page 26
                                                                               Appendix F

Distribution Outside of HUD
Chairman, Committee on Governmental Affairs, 340 Dirksen Senate Office Building, United
States, Senate, Washington, DC 20510

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

Chairman, Committee on Government Reform, 2185 Rayburn Building, House of
Representatives, Washington, DC 20515

Ranking Member, Committee on Government Reform, 2204 Rayburn Building, House of
Representatives, Washington, DC 20515

Subcommittee on Oversights and Investigations, Room 212 O’Neil House Office Building,
Washington, DC 20515

Director, Housing and Community Development Issue Area, United States General Accounting
Office, 441 G Street NW, Room 2474, Washington, DC 20548

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

Chief, Housing Branch, Office of Management & Budget, 725 17th Street, NW, Room 9226,
New Executive Office Building, Washington, DC 20503




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2002-BO-1003              Page 28
Filename:              ig211003.pdf
Directory:             D:\backup\REPORTS
Template:              C:\WINNT\Profiles\caroliv\Application
    Data\Microsoft\Templates\Normal.dot
Title:                 The following audit report content requirements are
    presented herein to better illustrate the required audit report format
Subject:
Author:                HUDware IIa Test User
Keywords:
Comments:
Creation Date:         4/30/02 4:49 PM
Change Number:         3
Last Saved On:         4/30/02 4:53 PM
Last Saved By:         Vincenta Carolina
Total Editing Time: 4 Minutes
Last Printed On:       4/30/02 5:01 PM
As of Last Complete Printing
    Number of Pages: 36
    Number of Words:           4,072 (approx.)
    Number of Characters: 23,214 (approx.)