oversight

Greater Dallas Council on Alcohol and Drug Abuse Supportive Housing Grant TX21B970908, Dallas, Texas

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-02-13.

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

                                                               U.S. Department of Housing and Urban Development
                                                               Southwest District Office of Inspector General
                                                               819 Taylor Street, Suite 13A09
                                                               Fritz G. Lanham Federal Building
                                                               Fort Worth, Texas 76102
                                                               (817)978-9309 FAX (817)978-9316
                                                               http://www.hud.gov/oig/oigindex.html




February 13, 2001                                               2001-FW-1802


MEMORANDUM FOR:                     Katie Worsham
                                    Director
                                    Office of Community Planning and Development, 6AD

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

SUBJECT: Greater Dallas Council on Alcohol and Drug Abuse
         Supportive Housing Grant TX21B970908
         Dallas, Texas


As part of a nationwide audit of HUD’s Continuum of Care Program, we reviewed the
Supportive Housing grant awarded to the Greater Dallas Council on Alcohol and Drug Abuse
(Council). Our objectives were to determine whether the Council:

      •    Implemented the grant in accordance with federal regulations and its grant agreements;
      •    Expended funds for eligible activities under federal regulations and applicable cost
           principles;
      •    Maintained accurate and adequate evidence of measurable results;
      •    Administered a sustainable program; and
      •    Expended funds timely.

To accomplish our objectives, we interviewed HUD and Council officials; reviewed the grant
application, grant agreement, technical submission, and Annual Progress Report. We also
analyzed financial and participant records. We selected a judgmental sample of financial
transactions and participants for our audit. The sample of financial transactions included all
salary and benefit costs associated with the grant.1 We selected 16 of the 78 individuals assessed
by the Council from October 1998 through April 2000.2

Our review concluded the Council’s activities were consistent with its application. However, the
Council included $28,892 in ineligible and/or unsupported costs in grant drawdowns. These
costs included costs not directly associated with the provision of supportive services and a
1
    The sample of financial transactions represented 95% of the total expenditures included in the general ledger
    from June 1998 through February 2000.
2
    The sample of participants was selected by choosing every fifth participant from a list provided by the Council.
                                                                                                   2


portion of a director’s salary. Due to the Council’s goals and lack of coordination of other
members of the Homeless Consortium in Dallas (Consortium), the Council did not report on its
goals. Furthermore, it has not expended its funds in a timely manner.

Since the inception of the grant, the Council has had a complete turnover of staff, and the new
staff were not familiar with the program requirements. Furthermore, many of the Council’s goals
address the long-term status of its participants. The Council’s program did not include housing
assistance, and therefore, could not report on these goals without the coordination and
cooperation of Consortium members.

We recommend HUD require the Council repay its grant or support the $28,892 in ineligible and
unsupported salary costs charged to the grant. HUD and the Council should determine whether
the Council should continue providing substance abuse treatment referrals. Also, HUD should
ensure the coordination among Consortium members to meet the objectives of the Continuum of
Care concept.

Within 60 days please give us, for each recommendation made in this memorandum report a
status report on: (1) corrective action taken; (2) proposed correction 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 call me or William Nixon, Assistant District Inspector General
for Audit, at (817) 978-9309.


Attachment
                                                                                                            3


Background.

Title IV of the Stewart B. McKinney Homeless Assistance Act authorized the Supportive
Housing Program. The Program is designed to promote the development of supportive housing
and services to assist homeless persons in the transition from homelessness and to enable them to
live as independently as possible. Eligible activities include:

     •   Transitional housing;
     •   Permanent housing for homeless persons with disabilities;
     •   Safe Havens;
     •   Supportive services for homeless persons not provided in conjunction with supportive
         housing (Supportive Services Only); and
     •   Innovative Supportive Housing.

In 1997, HUD awarded the Council a 3-year $400,181 Supportive Services Only (SSO) grant.3
HUD designed the SSO grants to address the special needs of homeless persons who are not
provided housing by the SSO project sponsor. The grant authorized funds for substance abuse
treatment for homeless individuals who are, or who qualify to be, participants in a transitional or
permanent supportive housing program. The Council had no prior experience administering
HUD grants.

The Council is a member of the Homeless Consortium in Dallas (Consortium). Under the
Continuum of Care concept, Consortium members would refer individuals with substance abuse
problems to the Council. The Council would assess and aid the individuals with obtaining
treatment. Under the grant, the Council would monitor the individual’s progress through
treatment. The Council’s grant provided funds to pay for the treatment. After treatment, other
Consortium members would provide housing to the individual.4

The Council is a nonprofit organization that has been in operation for 54 years. The Council
receives funding from federal block grants, the United Way, and fund raising activities and fees
for service. The Council is located at 4525 Lemmon, Suite 300 in Dallas Texas.

The Council paid $28,892 in ineligible and unsupported salary and benefit costs.

The Council paid $28,892 to two employees for ineligible and unsupported salary costs. The
Council inappropriately paid the Clinical Director $7,536 during 1998 and 1999. The Council’s
Technical Submission specifically defined a director’s salary as an operating cost, which the
Council was prohibited from charging to the grant.5 The Council contended that the Clinical
Director provided guidance to the Utilization Review Manager. Under the SSO requirements,
the Council could only charge the grant for amounts paid to providers of supportive services and


3
    The grant term is June 1, 1998, through May 31, 2001.
4
    This is applicable for residential treatment. For outpatient treatment, other Consortium members were
    responsible for providing housing while the individual was in treatment.
5
    HUD’s Application Instructions.
                                                                                                                        4


other costs directly associated with providing such services.6 Providing administrative guidance
to a manager does not meet the requirements for a cost directly associated with providing
supportive services. HUD should require the Council to reimburse its grant $7,536 for the salary
paid to the Clinical Director.7

The Council’s grant agreement authorized funds for the payment for substance abuse treatment
and the salary of a Utilization Review Manager. The Utilization Review Manager’s
responsibilities included working with local substance abuse treatments centers to establish a
working relationship and monitoring client’s progression through substance abuse treatment.

From June 1998 through October 20, 1998, the Council’s program had no participants. From
October 20, 1998, through December 31, 1998, the Council only performed assessments on three
individuals. Of the three individuals, two entered treatment. Again, the Council was only
permitted to charge the grant with costs directly associated with the provision of supportive
services. Since the Council had no participants from June 1998 through October 20, 1998, and
only two participants for the remainder of the year, it seems improbable the manager spent all of
his time on activities directly related to supportive services. The Council paid the manager
$18,274 in salary for 1998. Benefits associated with the 1998 salaries totaled $3,082.8 HUD
should require the Council to either support the manager’s 1998 salary or repay the grant the
$18,274 charged.

The Council did not receive the cooperation of the Consortium to achieve its goals.

The Council did not receive the cooperation of Consortium members needed to achieve and
report on its goals. While the majority of the Council’s activities involved substance abuse
treatment, the Council’s goals related to the housing status of participants. However, since the
Council received no feedback from Consortium members, it could not report on these goals.

As an illustration in its 1999 Annual Performance Report, it cited the following goals under the
heading of increased skills or income:9

•    70% of the program participants who successfully complete treatment will report an increase
     in coping skills and
•    65% of the program participants who successfully complete treatment will find employment
     within 12 months of completing treatment.

For these goals, the Council remarked that it could not track these goals “due to unknown
whereabouts of clients after completion of treatment.”
6
    24 CFR 583.120(b).
7
    Furthermore, the grant did not authorize the salary of the clinical director.
8
    Benefits associated with the 1998 salaries determined to be unsupported and/or ineligible totaled $3,082. This
    amount includes benefits for both the director and the manager. The general ledger provided by the Council did
    not provide sufficient detail to break out the amount for each individual separately. The entire amount has been
    classified as unsupported.
9
    The Council classified its goals under three headings: (1) residential stability; (2) increased skills or income; and
    (3) greater self-determination.
                                                                                                      5



In its application, the Council should have set goals that were within its control. The goals for
the Council should have addressed expected achievements of its Program and participants that it
could have monitored without the cooperation of other Consortium members. The inability of
the Council to report on its goals however, disclosed a communication breakdown within the
Consortium. The Council depended upon other members of the Consortium not only for its
referrals but also for any follow-up with participants after treatment. The Council received no
feedback on the housing status of its participants. It could not even say whether Consortium
members provided the participants housing upon leaving treatment. The Continuum of Care
concept was designed to help communities develop the capacity to organize and plan
comprehensive and long-term solutions to addressing the problem of homelessness. Referring
individuals for substance abuse treatment with no subsequent follow-up or knowing whether the
participant received housing appears contrary to the Continuum of Care concept.

The fact that the Consortium did not utilize a tracking system exacerbated the difficulty
encountered by the Council in monitoring its participants. The Consortium did not have a system
in place to monitor or track the success and/or failure of the participants in the Continuum of
Care Programs. However, one of the key elements in HUD’s approach to breaking the cycle of
homelessness is a coordinated community-based process of identifying needs and building a
system to address those needs.

Also at the time of the audit, staff did not know what criteria the Council used in determining the
goals of the Program. In fact, the staff did not know that it needed to submit an Annual Progress
Report.

The Council should work with HUD to determine the feasibility of continuing to offer substance
abuse referrals for homeless individuals. If there is no reliable means of tracking participants in
order to ensure that they enter housing once treatment is complete, nor any cooperation of the
members of the Homeless Consortium in Dallas, measuring the success and/or failure of this
Program is impossible.

The Council has not expended its grant funds timely.

As of October 10, 2000, the Council was behind projected spending for this grant by $166,531.10
However, the Council stated it ceased drawing down funds based on a monitoring review
performed by HUD.11 The monitoring review disclosed that the Council included ineligible costs
in grant drawdowns. The Council stopped making drawdowns until it knew for sure what was
eligible.

Further, the Council has not received as many referrals from Consortium members as initially
anticipated. In its application the Council indicated that it would serve 175 participants over the
grant term. This included residential treatment for 50 clients and outpatient treatment for 125


10
     This amount includes $28,892 in ineligible/unsupported costs.
11
     The Council had not made a drawdown since February 2000.
                                                                                                  6


clients.12 However, from October 1998 through April 2000, the Council has only referred 70
individuals for treatment. Of these 70 individuals, only 27 completed a treatment program.

Once again, this is a reflection on the coordination of efforts between Consortium members. The
Council has taken proactive steps in order to increase the referrals made to them by other
agencies. They have begun attending the Consortium meetings in Dallas and have taken steps to
“advertise” its program. It is unknown what type of impact these steps will have on future
referrals to the Council.

If HUD determines that the Council should continue to offer referral services to homeless
individuals, the Council should continue to work with the Consortium members to increase the
number of referrals made to the Council. Regardless of this decision, the Council should draw
down funds for services provided to participants since February 2000.

Recommendations

We recommend that HUD:

1A. Require the Council to reimburse its grant for the $7,536 spent on ineligible salary costs.

1B. Require the Council to either support the $18,274 of salary costs paid to the Utilization
    Review Manager or reimburse its grant.

1C. Require the Council to either support or reimburse its grants the $3,082 of salary benefits
    paid on the ineligible and unsupported salary.

1D. Work with the Council in order to determine the feasibility of the Council continuing to
    provide substance abuse referrals for the Dallas Consortium.

1E. Reimburse the Council for eligible substance abuse treatment provided to participants not
    drawn down from the supportive housing grant to date.

1F. Deobligate any funds not expended as of May 31, 2001.




12
     The Council has requested the grant be amended to cover more residential treatment.
                                                                                            7


DISTRIBUTION

Secretary's Representative, 6AS
Comptroller, 6AF
Director, Accounting, 6AAF
Director, Office of CPD, 6AD
Secretary Martinez, S (Room 10000)
Saul N. Ramirez, Jr., Deputy Secretary, SD (Room 10100)
Kevin Simpson, Deputy General Counsel, CB (Room 10214)
Jon Cowan, Chief of Staff, S (Room 10000)
B. J. Thornberry, Special Asst. to the Deputy Secretary for Project Management, SD (Rm 10100)
Joseph Smith, Acting Assistant Secretary for Administration, A (Room 10110)
Hal C. DeCell III, A/S for Congressional and Intergovernmental Relations, J (Room 10120)
Ginny Terzano, Sr. Advisor to the Secretary, Office of Public Affairs, S (Room 10132)
Roger Chiang, Director of Scheduling and Advance, AL (Room 10158)
Howard Glaser, Counselor to the Secretary, S (Room 10218)
Rhoda Glickman, Deputy Chief of Staff, S (Room 10226)
Todd Howe, Deputy Chief of Staff for Operations, S (Room 10226)
Jacquie Lawing, Deputy Chief of Staff for Programs & Policy, S (Room 10226)
Patricia Enright, Deputy A/S for Public Affairs, W (Room 10222)
Joseph Hacala, Special Asst for Inter-Faith Community Outreach, S (Room 10222)
Marcella Belt, Executive Officer for Admin Operations and Management, S (Room 10220)
Karen Hinton, Sr. Advisor to the Secretary for Pine Ridge Project (Room 10216)
Gail W. Laster, General Counsel, C (Room 10214)
Armando Falcon, Office of Federal Housing Enterprise Oversight (Room 9100)
William Apgar, Assistant Secretary for Housing/FHA, H (Room 9100)
Susan Wachter, Office of Policy Development and Research (Room 8100)
Cardell Cooper, Assistant Secretary for CPD, D (Room 7100)
George S. Anderson, Office of Ginnie Mae, T (Room 6100)
Eva Plaza, Assistant Secretary for FHEO, E (Room 5100)
V. Stephen Carberry, Chief Procurement Officer, N (Room 5184)
Harold Lucas, Assistant Secretary for Public & Indian Housing, P (Room 4100)
Gloria R. Parker, Chief Information Officer, Q (Room 8206, L’Enfant Plaza)
Frank L. Davis, Director, Office of Dept Operations and Coordination, I (Room 2124)
Office of the Chief Financial Officer, F (Room 2202)
Edward Kraus, Director, Enforcement Center, V, 200 Portals Bldg., Wash. D.C. 20024
Donald J. LaVoy, Acting Director, REAC, X, 800 Portals Bldg., Wash. D.C. 20024
Ira Peppercorn, Director, Office of MF Asst Restructuring, Y, 4000 Portals Bldg., D.C. 20024
Mary Madden, Assistant Deputy Secretary for Field Policy & Mgmt, SDF (Room 7108) (2)
Deputy Chief Financial Officer for Operations, FF (Room 2202)
David Gibbons, Director, Office of Budget, FO (Room 3270)
FTW ALO, AF (2)
CPD ALO, DOT (Room 7220) (2)
                                                                                        8


                                DISTRIBUTION (Cont’d)

Dept. ALO, FM (Room 2206) (2)
Acquisitions Librarian, Library, AS (Room 8141)
Director, Hsg. & Comm. Devel. Issues, US GAO, 441 G St. NW, Room 2474
     Washington, DC 20548 Attn: Stan Czerwinski
Henry A. Waxman, Ranking Member, Committee on Govt Reform,
     House of Rep., Washington, D.C. 20515
The Honorable Fred Thompson, Chairman, Committee on Govt Affairs,
     U.S. Senate, Washington, D.C. 20510
The Honorable Joseph Lieberman, Ranking Member, Committee on Govt Affairs,
     U.S. Senate, Washington, D.C. 20510
Cindy Fogleman, Subcomm. on Gen. Oversight & Invest., Room 212,
     O'Neill House Ofc. Bldg., Washington, D.C. 20515
The Honorable Dan Burton, Chairman, Committee on Govt Reform,
     House of Representatives, Washington, D.C. 20515
Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, Drug Policy & Human
     Resources, B373 Rayburn House Ofc. Bldg., Washington, D.C. 20515
Steve Redburn, Chief, Housing Branch, Office of Management and Budget
     725 17th Street, NW, Room 9226, New Exec. Ofc. Bldg., Washington, D.C. 20503
Inspector General, G
Greater Dallas Council on Alcohol and Drug Abuse