U.S. Department of Housing and Urban Development
District Office of the Inspector General
Office of Audit
Richard B. Russell Federal Building
75 Spring Street, SW, Room 330
Atlanta, GA 30303-3388
(404) 331-3369
September 27, 2001 2001-AT-1808
MEMORANDUM FOR: Charles E. Gardner
Director, Atlanta Homeownership Center, 4AHH
FROM: Nancy H. Cooper
District Inspector General for Audit-Southeast/Caribbean, 4AGA
SUBJECT: Autographed Book Give-Away for Inner-City Youths, Inc.
Orlando, FL
Nonprofit Participation in FHA Single Family Insurance Program
As part of a nationwide audit of the Federal Housing Administration’s (FHA) Single Family
Insurance Program, we audited Autographed Book Give-Away for Inner-City Youths, Inc.’s
(ABG) purchase of Real Estate Owned (REO) properties. Our objectives were to determine
whether ABG was legitimate and independent (not under the influence, control, or direction of
other parties) and passed on the benefits of discounts received on the purchase of HUD homes to
low- and moderate-income homebuyers.
ABG did not properly control and manage its affordable housing program. ABG allowed
venture partners to influence and control most of the properties purchased from HUD. The
arrangement created a conflict of interest and defeated HUD’s objective of increasing
opportunities for affordable homeownership to low and moderate-income persons. ABG sold
homes to ineligible purchasers, sold homes at excessive prices, allowed properties to be sold at
predatory loan rates, failed to maintain adequate accounting records, and needed to improve the
quality of its renovation work. In addition to its failure to meet HUD’s program objectives, we
question ABG’s charitable intent. The Executive Director used the non-profit to pay personal
expenses of $97,351. Use of a nonprofit for personal benefit violates HUD’s eligibility criteria
for participation in its programs.
We recommend HUD require ABG to reimburse HUD $23,225 for the discounts it received on
the three properties it sold to unqualified buyers, and pay down the mortgages for the 30 percent
discounted properties sold in excess of 110 percent of net development cost. We also
recommend ABG assist homebuyers with exorbitant mortgage rates (over 17 percent) to obtain
refinancing at reasonable prevailing rates, and correct or pay for rehabilitation deficiencies
identified by our audit.
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We sent a draft of this audit memorandum to ABG on September 13, 2001. ABG provided oral
comments on September 19, 2001, and written comments on September 20, 2001. Overall,
ABG’s Executive Director believed ABG maintained control of the acquired properties, but in
some instances did not fully manage all aspects of work performed on the properties.
Within 60 days of this memorandum, please provide us a status report for each recommendation
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.
If you have any questions, please contact James D. McKay, Assistant District Inspector General
for Audit, at 404-331-3369.
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Background
Autographed Book Give-Away for Inner-City Youths, Inc. is a nonprofit organization under
Section 501 (c)(3) of the Internal Revenue Code and was incorporated under Florida State law on
May 19, 1998. Its office is located in Orlando, Florida. According to its Articles of
Incorporation and By-Laws, ABG was organized exclusively for charitable, religious,
educational, and scientific purposes. Its activities are directed towards providing personalized
autographed books to inner-city youths and to demonstrate to underprivileged youths that they
can become published authors and not just professional athletes for the benefit of the community
and state. ABG’s Executive Director said it has donated several thousand autographed books to
inner-city youth at local high schools and other institutions.
A four-member Board of Directors governed ABG. The Board of Directors was responsible for:
managing the business, property, and affairs of the organization, transacting all business, and
determining the policies, fiscal matters, employment of staff, and other personnel issues. The
Executive Director, under contract, was responsible for maintaining all licenses, permits and
other requirements necessary to perform his duties under the contract, as determined by HUD
and applicable agency regulations and related laws, and for keeping the non-profit agency
advised of those requirements. ABG did not have any other employees. The Executive Director
also served as voluntary Chairman of the Board.
ABG’s non-profit status allowed it to participate in the purchase of HUD owned properties.
HUD’s discount sales program allows nonprofit organizations to purchase HUD owned
properties at a discount of 30 percent in revitalization areas and up to 15 percent in non-
revitalization areas. HUD intended that the discounted sales would allow nonprofit agencies to
rehabilitate the properties if necessary and then resell them to low and moderate-income
homebuyers at a reduced, affordable price.
Below is a brief chronology of events pertaining to ABG’s participation in HUD’s FHA Single
Family Insurance Program:
• March 4, 1999, HUD approved ABG as a nonprofit organization to participate in the
purchase of REO properties at a discount. ABG was limited to purchasing one property
at a time through the Direct Sale Program.
• ABG purchased its first discounted HUD Home on August 24, 1999.
• March 24, 2000, ABG submitted its recertification application to HUD in accordance
with Mortgagee Letter 00-08.
• June 1, 2000, HUD met with ABG’s Executive Director to discuss the results of a HUD
review, which identified a number of concerns. Subsequently, HUD issued a warning
letter outlining corrective actions required and future monitoring requirements.
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• June 26, 2000, HUD recertified ABG to participate in the HUD program, but limited
ABG to 5 properties.
• February 12, 2001, HUD placed ABG under technical compliance review due to
questionable activities in its purchase of HUD Homes under the Direct Sale Program.
• May 9, 2001, HUD issued a proposed removal letter to ABG after its technical
compliance review and review of other information.
• July 11, 2001, HUD issued a 1-year removal action against ABG, effective May 9, 2001.
Two violations that led to the removal were that ABG did not adequately pass on
discounts to homeowners and entered into joint venture agreements with investors.
During the period of August 24, 1999, through October 31, 2000, ABG purchased a total of 49
properties for $2,894,510 and received discounts of $375,335. ABG’s primary source of income
was proceeds from the sale of HUD discounted homes.
Audit Objectives, Scope, and Methodology
Our audit objectives were to determine whether ABG was legitimate and independent (not under
the influence, control, or direction of other parties) and passed on the benefits of discounts
received on the purchase of HUD homes to low and moderate-income homebuyers.
To accomplish our objectives, we conducted interviews with HUD officials, ABG’s
management, profit-motivated entities involved in the purchase, rehab, and resale of the
properties, and homebuyers. We also conducted public record searches and on-site reviews of
the properties. Further, we reviewed HUD files on ABG, REO case files, property files
maintained by ABG, records obtained from the profit-motivated entities, loan origination files,
closing files, and ABG’s financial data.
We selected eight properties for review from HUD’s Single Family Asset Management System
report. We selected the only three 30 percent discounted properties, one 15 percent, and four 10
percent discounted properties purchased by ABG. In addition to including all 30 percent
discounted properties, we focused on those properties ABG resold to homebuyers with large
gifts, high interest rate loans, and/or involved joint ventures.
The audit included properties purchased by ABG from August 24, 1999, through October 19,
2000. We performed fieldwork from January 2001 through August 2001.
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ABG Failed to Meet Affordable Housing Objectives
ABG did not properly control and manage its affordable housing program. ABG allowed
venture partners to influence and control most of the properties purchased from HUD. The
arrangement created a conflict of interest and defeated HUD’s objective of increasing
opportunities for affordable homeownership to low and moderate-income persons. ABG sold
homes to ineligible purchasers, sold homes at excessive prices, allowed properties to be sold at
predatory loan rates, failed to maintain adequate accounting records, and needed to improve the
quality of its renovation work. In addition to its failure to meet HUD’s program objectives, we
question ABG’s charitable intent. The Executive Director used the non-profit to pay personal
expenses of $97,351. Use of a nonprofit for personal benefit violates HUD’s eligibility criteria
for participation in its programs.
ABG did not properly control and manage its affordable housing program
ABG did not properly manage or oversee the operations of its affordable housing plan to ensure
that HUD program objectives were being pursued and met. ABG improperly allowed venture
partners seeking to derive a profit from the program to influence, control, and manage its
affordable housing program. ABG officials told us they used the joint venture arrangement as an
opportunity to expand its affordable housing program.
Mortgagee Letter 96-52 requires a nonprofit to act on its own behalf and not be under the
influence, control, or direction of any outside party seeking to derive a profit or gain from the
proposed project, such as a landowner, real estate broker, contractor, builder, lender, or
consultant. A nonprofit must have the administrative capability and financial capacity to develop
and carry out its proposed affordable housing plan (Housing Notice 94-74, Attachment 1,
Requirements 4 and 5; and Mortgagee Letter 96-52). Furthermore, HUD prohibits any person
who is an employee, agent, consultant, officer, or an elected or appointed official or who is in a
position to participate in a decision-making process or gain inside information from obtaining a
personal or financial interest or benefit from the lease or purchase of the property, either for
himself or herself or for those with whom he or she has family or business ties, during his or her
tenure or for 1-year thereafter. (Title 24 of the Code of Federal Regulations (CFR) §291.435
(b)).
Of the 49 properties ABG purchased during the audit period, 32 (or 65 percent) involved for-
profit rehabilitation contractors. Three of the eight properties we reviewed involved profit-
motivated entities. ABG did not have written agreements for two of the three properties, but
generally operated under similar terms and conditions as those with written agreements. We
examined an agreement for another property not in our sample. The agreement included
language that indicated that the for-profit partner had extensive control and influence. For
example, the agreement stated:
• The partner shall be entitled to retain the entire net profit from the sale of the property
over and above the agreed purchase price,
• The non-profit shall be entitled to a flat paid donation,
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• The non-profit is executing loan documents to purchase the property as an
accommodation to the partner, and
• The partner shall be solely responsible for rehabilitating the property, marketing the
property for sale and negotiating all contracts for the sale of the property.
The third property involved a trust agreement with ABG designated as trustee and the owners of
a for-profit entity as beneficiaries. The trust agreement stipulated that a particular real estate
consultant must be used and that ABG should not disclose the identity of the beneficiaries or the
terms of the agreement. The trust agreement also included other language that indicated control
by the for-profit partners (beneficiaries):
• Trustee (ABG) shall enter into an appropriate sales contract with prospective
owner/occupant, subject to beneficiaries final approval of any such agreement and
ultimate control,
• Beneficiaries shall be entitled to retain the entire net profit from the ultimate sale to
owner/occupant,
• Trustee’s sole entitlement to compensation is a fee payable at the closing of the purchase
from HUD, and
• Beneficiaries shall retain control of any final decisions regarding the sale or other
disposition of the property, and should beneficiaries desire to replace or to discharge
trustee, trustee shall convey legal title to beneficiaries.
The agreements contained no requirement that the discounts be passed on to low and moderate-
income homebuyers. Essentially, ABG had a limited role in the program and used its nonprofit
status as a means to obtain the property from HUD at a discount.
ABG did not incur any risk in the purchase, rehabilitation, or resale of the joint venture
properties, because ABG invested no monies in them. ABG allowed the for-profit entities to use
its nonprofit name for a fee to acquire properties from HUD at a discount, then renovate and
resell them. In the 3 sample properties, ABG received administrative fees of $9,000. ABG
executed all the paperwork needed to make it appear that it acquired the properties from HUD
and resold them on its own behalf in accordance with its affordable housing plan. However,
ABG actually purchased the properties for and on behalf of the for-profit entities. By its
involvement with profit-motivated entities, ABG relinquished control over most of its housing
transactions, undermined its own affordable housing plan, and sold properties to ineligible
homebuyers.
Affordable Housing Plan Undermined
According to ABG’s own affordable housing plan, among other things, it intended to: (1)
increase home ownership within depressed inner-city areas for low to moderate-income persons,
(2) allow eligible participants to benefit from the reduced price at which ABG purchased the
homes from HUD, which would be passed on directly to the participants, and (3) locate eligible
participants to benefit from its program via various local community contacts.
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Two of the three properties that involved for-profit partners were not located in depressed inner-
city areas. (We were unable to inspect the third property or contact the owners.) Furthermore,
all three properties were sold to ineligible homebuyers. Finally, the two owners of the properties
that we visited stated that they had minimal contact with ABG staff, except at closing.
ABG Resold HUD Homes to Ineligible Purchasers
Mortgagee Letter 96-52 states the affordable housing program must serve the housing needs of
low and moderate-income individuals and families. Title 24 CFR 203.41(a)(1) defines low or
moderate-income housing as housing that is designed to be affordable to individuals or families
whose household income does not exceed 115 percent of the median income for the area.
ABG sold the three properties that involved for-profit partners to ineligible buyers. ABG
purchased properties at 1020 Wentworth Court and 2845 11th Avenue N. and received discounts
of $9,066 and $3,000, respectively. ABG resold the properties to individuals whose incomes
exceeded 115 percent of the median area income as adjusted for family size. ABG purchased
another property at 1815 Mahogany Drive and received an $11,159 discount. ABG sold that
property to two foreign students whose father, a wealthy foreign construction company owner,
paid cash for the property.
We also identified five (5) additional transactions outside our sample that occurred during 1999
and 2000, in which homebuyers paid cash for the properties. While we did not review those
properties, the mere fact that the buyers paid cash for the properties indicates they probably were
not low to moderate-income.
ABG's revised affordable housing program does briefly mention the 115 percent of median
income guideline under the section relating to lease/purchase program (which was not approved
by HOC). However, there is no evidence that ABG verified or checked buyer incomes. The
contract ABG used for prospective buyers did not mention any income level requirements. We
found no controls or procedures in place to ensure that only those individuals and families that
meet the 115 percent of median income test were allowed to participate in ABG's affordable
housing program.
HUD discounts not passed on
Mortgagee Letter 97-5 states that for properties purchased with a discount in excess of 15
percent, the resale price cannot exceed 110 percent of net development cost. If the sales price
exceeds 110 percent of net development cost, the excess profit must be used to pay down the
existing mortgage. Currently, HUD has no specific written restrictions on the resale price of
properties purchased at a discount of 15 percent or less.
ABG improperly sold the 30 percent discounted properties for more than 110 percent of net
development cost. ABG received $43,541 excess profits from these properties.
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HUD Excessive
Discount 110 Percent of Net Resale Resale
Property Address Percentage Development Cost Price Price
7621 Perugia Avenue 30 $66,786 $79,000 $12,214
1625 W. 28th Street 30 52,787 69,000 16,213
7727 Ravenna 30 49,886 65,000 15,114
Total $169,459 $213,000 $43,541
As a further test, we also compared ABG’s resale prices of the 8 sample properties to HUD’s as-
repaired value from the REO appraisals. Our comparisons showed the resale prices were
significantly above HUD’s as-repaired values. The resale prices ranged from 107 percent to 197
percent of HUD’s as-repaired value.
HUD Resale Price as
Discount HUD’s As- Resale a Percentage of
Property Address Percentage Repaired Value Price HUD’s Value
4724 White Willow Lane 10 $60,000 $80,000 133
5910 Westbury 10 87,000 95,000 109
1625 W. 28th Street 30 53,000 69,000 130
7727 Ravenna Avenue 30 51,845 65,000 125
7621 Perugia Avenue 30 66,000 79,000 120
1815 Mahogany 10 90,000 97,000 107
1020 Wentworth Court 15 75,000 98,900 132
2845 11th Avenue 10 40,000 78,900 197
Predatory Loans
ABG was not effective in helping prospective homebuyers obtain financing at reasonable interest
rates. Further, ABG knowingly allowed several low and moderate-income persons to get
involved in mortgage financing that resulted in financial difficulties and hardship. Therefore,
ABG did not fulfill the goal of the HUD home program or its own affordable housing program
by providing affordable housing opportunities to low and moderate-income persons.
ABG allowed 3 properties to be sold to low and moderate-income individuals/families at interest
rates that exceeded 17 percent, when the prevailing mortgage interest rate was below 8 percent.
There were at least three additional sales with mortgage loan interest rates of 10.75 percent or
more. There were also two sales where the loans had adjustable rate mortgages with lifetime
caps on interest rates between 13.33 percent and 14.83 percent. Equicredit financed all three of
the loans with rates exceeding 17 percent and Westside Funding working with ABG had
arranged the financing. These closings were held during September and November 1999.
ABG did not adequately protect the interest of the homebuyers who were participating in its
affordable housing program. The Executive Director of ABG had knowledge of these exorbitant
interest rates prior to or at the closings for these properties but failed to do anything about the
high interest rate mortgage loans.
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HUD identified and questioned the three 17 percent interest rate loans. ABG sent each borrower
a letter offering to assist them in obtaining re-financing on the property, but made no additional
efforts. We interviewed the Executive Director and asked him about the 17 percent interest rate
loans. He agreed that the interest rates were exorbitant and expressed his intentions to explore
ways to assist these three individuals obtain some kind of relief.
We determined that the prevailing 30-year mortgage interest rate was below 8 percent during the
time (September and November 1999) of the three closings. The high interest loans had a
substantial negative impact. It meant that the home cost the borrower twice as much as it should.
For example, the family that purchased the property at 7727 Ravenna Avenue had monthly
mortgage payments under the 17.7 percent mortgage loan of $770.96. Had the mortgage loan
been at the prevailing rate of 8 percent their monthly payment would have been $381.56, a
decrease of $389.40 or about half the required payment. Prior to purchasing this home, the
family had been paying monthly rent for an apartment in the amount of $550. As of May 2001
the family was scheduled for a foreclosure hearing in the Orange County Courts on the property
because they were delinquent in their payments. A job loss of one spouse contributed to their
financial problems. However, a monthly mortgage payment twice what it could have been also
contributed to their financial hardship. In effect, the purchase of a home from ABG actually hurt
this family rather than helped them. Even if they had been able to make the high monthly
payments, over the life of the mortgage they would have paid an additional $140,193.17 in
interest ($225,554.77 at 17.7 percent) as compared to $85,361.60 at 8 percent.
ABG Failed to Maintain Adequate Accounting Records
A nonprofit must evidence administrative capability and financial capacity to develop and carry
out the proposed affordable housing plan (Housing Notice 94-74, Attachment 1, Requirements 4
and 5; Mortgagee Letter 96-52). Also, Mortgagee Letter 00-08 states that nonprofits need to
maintain an acceptable accounting system to report on property purchases, rehabilitation, rental,
and resale. Furthermore, tax-exempt organizations must file an annual information return with
the Internal Revenue Service (IRS). This return would be either IRS Form 990 or IRS Form
990-EZ, depending on the amount of annual receipts and total assets of the tax-exempt
organization. A formal accounting system must be maintained in order for an organization to
complete the required sections of either IRS Form 990 or IRS Form 990EZ.
ABG did not maintain any formal accounting records or system of accounting and has not filed
the required IRS Forms. Specifically,
• ABG did not maintain a general ledger or formal accounting records to record its
transactions. ABG used two checking accounts to record property purchases,
rehabilitation, and resale activities, as well as personal and household expenses. Only the
cancelled checks, deposit slips, and check stubs were maintained. There had been no
attempt to classify the information into various expense or income categories.
• ABG did not have adequate records to support rehabilitation expenses, whether repaired
by partners or ABG. For properties involving joint partners, the partners listed supplies,
materials, and labor payments on a register report. The register reports did not describe
what types of repairs were performed. For properties ABG repaired, ABG wrote checks
that covered multiple properties, and the Executive Director could not provide support for
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amounts spent for individual properties. The Executive Director stated his practice was
to make partial payments for repairs to several properties on a single check. He wrote the
street names in the memo area of the check. However, he did not indicate what amount
applied to each address.
Possible Personal Benefit Derived
Title 24 CFR 203.41 defines an eligible non-profit as one in which no part of its net earnings
inure to the benefit of any member, founder, contributor or individual. Mortgagee Letter 96-52
prohibited members of the nonprofit's board, employees, and any one with an identity of interest
to the nonprofit from benefiting specifically from the nonprofit's affordable housing program.
The IRS instructions for completing Form 990, Schedule A, Part III requires nonprofit
organizations to disclose and explain financial transactions with organizations and individuals in
a position to influence their operations. The IRS designed Form 990 to help ensure that
organizations remain true to their charitable purposes and that private individuals do not enrich
themselves at the expense of those purposes.
ABG’s Executive Director used the nonprofit’s accounts to record property purchases,
rehabilitation, and resale activities, as well as personal and household expenses. He used ABG’s
two checking accounts to pay his mortgage, car payments, home utility bills and other personal
expenditures, including checks written directly to him with no explanations. We calculated the
total compensation for the period February 1999 (date ABG opened its first checking account)
through December 2000. We treated all personal expenses as salary paid to or on behalf of the
Executive Director. We then deducted the Executive Director’s salary (based on the $100,000
annual rate stipulated by the employment contract) from the total to arrive at $97,351 that was
paid for personal expenses.
Furthermore, ABG’s Executive Director did not prepare W-2s or Form 1099s to report the
compensation, and had not filed a tax return with the IRS for himself or for the nonprofit since
its formation in May 1998. The Executive Director stated that he planned to have his accountant
review ABG’s checking accounts and classify the personal expenses as salary payments and to
use those amounts for the 1099’s.
ABG Needs to Improve Quality of Renovation Work
ABG did not complete some needed repairs and, in some instances, completed repairs using poor
quality workmanship. The items are presented on Appendix A. Work not done in various homes
included vinyl floor covering not replaced in certain areas, kitchen countertops not repaired, a
hole in garage ceiling was not repaired, new front door and screen door not installed, and one
home was not pressure washed and painted as needed. Poor quality work included electrical
service work that resulted in power outages when major appliances were used simultaneously
and garage wall water damage that re-occurred after the wall was repaired, but the water leak
was not repaired. Additionally, our sample included seven properties for which HUD’s
inspection reports showed a need to replace roofs on homes ABG bought from HUD. We
confirmed that ABG, or the for-profit entities that ABG allowed to control the properties, did not
replace five of the roofs. Two homeowners said they were told that they would have to pay for
the work if they wanted the roofs to be replaced.
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As a result, the nonprofit agency sold homes to low to moderate-income individuals who may
not have the funds to make the needed repairs. These conditions were significant because HUD
granted sufficient discounts for the nonprofit agency to repair all major problems with the
homes. These conditions were in addition to the adverse impact the nonprofit caused the
purchasers by selling the properties for amounts that exceeded HUD’s appraised values.
ABG Response
ABG’s Executive Director believed it had properly controlled its program, but acknowledged
that it did not fully manage all aspects of work performed on properties. He believed the joint
venture arrangement was an acceptable practice as the agreement was prepared by independent
counsel and was purported to comply with all HUD requirements.
The Executive Director said licensed appraisers determined resale prices, and ABG made gifts to
cover down payment requirements. He said the gifts were not provided by third parties, and
contended that ABG did not materially profit from the sales when gifts were considered. He
asked that any repayment of excess resale prices for the 30 percent discount properties be
reduced by any gifts or closing costs paid for the homebuyers.
The Executive Director said he had tried to assist the homebuyers with excessive rates. He said
none of the homebuyers had accepted his offers for assistance. He also said he had contacted
HUD for other solutions to the problem.
The Executive Director did not agree that private inurement had resulted from ABG’s activities.
He said he had advanced funds to ABG to keep it financially afloat until it became self-
sufficient. He said the $97,351 consisted of refundable deposits that he was entitled to. He also
said ABG now has implemented an acceptable accounting system and does not commingle
funds.
OIG Evaluation of ABG’s response
We believe the venture arrangement is improper because it allows partners seeking to derive a
profit from the program to influence, control, and manage the program. ABG improperly
relinquished most of its control over the rehabilitation and calculation of the resale price to the
venture partners. ABG did not have the receipts to support the rehabilitation costs. Furthermore,
ABG indicated the resale prices were determined by appraisals, not actual net development costs.
Accordingly, ABG relinquished its control and authority over the program. Ultimately,
homebuyers paid higher prices than necessary, which defeated the purpose of the program.
We reviewed additional information submitted by the Executive Director. He said his
accountant had reorganized the nonprofit’s and his personal finances. The documentation
indicated the Executive Director had made several large personal deposits to one checking
account in 1999. However, we did not audit all of the records and thus cannot determine
whether the nonprofit and personal activities are properly recorded and represented.
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Recommendations
We recommend the Director of the Atlanta Homeownership Center:
1A. Require ABG to reimburse HUD $23,225 for the discounts ABG received on the three
properties it sold to unqualified buyers – $9,066 for Wentworth Court, $3,000 for 11th
Avenue N., and $11,159 for Mahogany Dr.
1B. Require ABG to pay down the mortgages for the 30 percent discounted properties it sold
for prices that exceeded 110 percent of net development cost. ABG requested the prices
be reduced for gifts or closing costs paid on behalf of the homebuyers.
1C. Require ABG to assist homebuyers with exorbitant interest rate mortgages obtain
mortgage refinancing at more reasonable current prevailing rates.
1D. Require ABG to correct the rehabilitation deficiencies identified in Appendix A at no
cost to the purchaser or current occupant of the homes.
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APPENDIX A
SCHEDULE OF REHAB WORK DEFICIENCIES
Property Address Work Not Performed (A) Poor Quality Work (B)
7727 Ravenna Drive 1, 2, 3 -
1020 Wentworth Court 1 -
7621 Perugia Avenue 1, 4, 5, 6, 7, 8, -
1625 W. 28th Street 10, 11, 12 1
4724 White Willow Lane 13, 15, 16, 17 2, 3, 4
1815 Mahogany Drive 1 5
5910 Westbury Drivea 1, 2, 10, 14 -
A—Work Not Performed
1. The roof was not replaced. *
2. The burglar bars had not been removed. *
3. The stove and hood fan were not in the house when the purchasers bought the property. *
4. The floor covering in the utility room was not replaced. The kitchen floor was done, but would
not have needed the 40 yards of linoleum as shown on the nonprofit’s list of repairs.
5. Electrical service and fans were not completed.
6. Miscellaneous plumbing and repairs were not done.
7. The column on the carport was not replaced. *
8. The exterior wall was not sealed. *
9. Closet door was not re-hanged.
10. The exterior was not pressure washed and painted. The exterior trim was not painted.
11. New front door and screen door were not installed.
12. New hardware for interior adjustments was not done.
13. The kitchen countertops were not repaired.
14. The screens were not repaired.
15. Hole in garage ceiling was not repaired.
16. The garage door was not repaired and garage door opener did not work.
17. The stove, refrigerator, and dishwasher did not work.
B—Poor Quality Work
1. New electrical service was completed but power outages occurred when the dryer and stove are
used at the same time.
2. The dining room flooring was peeling near the patio door. *
3. There was a water stain on the garage wall resulting from a water leak. *
4. The kitchen flooring was peeling near dishwasher.
5. The garbage disposal did not operate. *
a. We conducted inspection of exterior of home only, because the homeowners were not available for our
scheduled and unannounced visits.
* The item was not included in contractor’s invoice or the nonprofit’s list of repair work.
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APPENDIX B
AUDITEE COMMENTS
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APPENDIX C
DISTRIBUTION
Executive Director, Autographed Book Give-Away for Inner-City Youths, Orlando, Florida
Secretary, S
Deputy Secretary, SD (Room 10100)
Chief of Staff, S (Room 10000)
Assistant Secretary for Administration, S (Room 10110)
Acting Assistant Secretary for Congressional and Intergovernmental Relations, J (Room 10120)
Deputy Assistant Secretary, Office of Public Affairs, S, (Room 10132)
Deputy Assistant Secretary for Administrative Services, Office of the Executive Secretariat, AX
(Room 10139)
Deputy Assistant Secretary for Intergovernmental Relations,
Acting Deputy Chief of Staff, S (Room 10226)
Deputy Chief of Staff for Policy, S (Room 10226)
Deputy Chief of Staff for Programs, S (Room 10226)
Special Counsel to the Secretary, S (Room 10234)
Senior Advisor to the Secretary, S
Special Assistant for Inter-Faith Community Outreach, S (Room 10222)
Executive Officer for Administrative Operations and Management, S (Room 10220)
General Counsel, C (Room 10214)
Assistant Secretary for Housing/Federal Housing Commissioner, H (Room 9100)
Assistant Secretary for Policy Development and Research, R (Room 8100)
Assistant Secretary for Community Planning and Development, D (Room 7100)
Assistant Deputy Secretary for Field Policy and Management, SDF (Room 7108)
Office of Government National Mortgage Association, T (Room 6100)
Assistant Secretary for Fair Housing and Equal Opportunity, E (Room 5100)
Director, Office of Departmental Equal Employment Opportunity, U
Chief Procurement Officer, N (Room 5184)
Assistant Secretary for Public and Indian Housing, P (Room 4100)
Director, Office of Departmental Operations and Coordination, I (Room 2124)
Office of the Chief Financial Officer, F (Room 2202)
Chief Information Officer, Q (Room 3152)
Acting Director, HUD Enforcement Center, V, 1250 Maryland Avenue, SW, Suite 200
Acting 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
Inspector General, G (Room 8256)
20
Exit
Secretary's Representative, 4AS
State Coordinator, Florida State Office, 4DS
Director, Atlanta Homeownership Center, 4AHH
Audit Liaison Officer, 3AFI
Audit Liaison Officer, Office of Housing, HF (Room 9116)
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)
Stanley Czerwinski, Associate Director, Resources, Community, and Economic Development
Division, U.S. GAO, 441 G Street N.W., Room 2T23, Washington DC 20548
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
Armando Falcon, Director, Office of Federal Housing Enterprise Oversight, O, 1700 G Street, NW,
Room 4011, Washington, DC 20552
Andrew R. Cochran, Senior Counsel, Committee on Financial Services, 2129 Rayburn House
Office Building, Washington, DC 20510
21
Exit
Autographed Book Give-Away for Inner City Youths, Inc., Orlando, FL, Nonprofit Participation in FHA Single Family Insurance Program
Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-09-27.
Below is a raw (and likely hideous) rendition of the original report. (PDF)