oversight

Macon-Bibb County Economic Opportunity Council, Inc. Supportive Housing Program (SHP) Macon, Georgia

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-11-09.

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

                                                    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




November 9, 2001                                      Audit Memorandum 2002-AT-1802


MEMORANDUM FOR:              John Perry, Director, Office of Community Planning and
                                Development, 4AD




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


SUBJECT:      Macon-Bibb County Economic Opportunity Council, Inc.
              Supportive Housing Program (SHP)
              Macon, Georgia

At the request of your office, the Office of Inspector General (OIG) conducted a survey of the
1996 and 1998 Supportive Housing Grants awarded to the Macon Housing Authority and the
Macon-Bibb Economic Opportunity Council (EOC) as the subrecipient and project sponsor. The
objective of the survey was to assess the validity of a complaint alleging that Macon-Bibb EOC
officials mismanaged HUD funds including the possible theft of HUD funds, and altered
reporting documents to show compliance with HUD regulations.

                              METHODOLOGY AND SCOPE

To accomplish the objective, we interviewed officials and staff from HUD’s Georgia State
Office of Community Planning and Development (CPD), Macon Housing Authority (MHA), and
Macon-Bibb EOC. We also reviewed HUD, MHA, and EOC files and documents. In addition,
we conducted site visits to the four transitional houses supported with HUD SHP funds.

We also evaluated EOC’s procedural controls over receipts and disbursements and we reviewed
a non-random sample of disbursements for eligibility and documentary support. Our sample
selection methodology was to select a variety of disbursements with emphasis on large or
unusual transactions.

MHA drew down $262,509 of its 1996 SHP grant and disbursed $255,817 of the funds to EOC.
We tested sample transactions from the 1996 grant totaling $47,644 and we analyzed salary costs
totaling $117,842. MHA had drawn down $61,890 of its 1998 grant and disbursed $61,639 to
EOC. We tested sample transactions for the 1998 grant totaling $10,171.




                                                                                             Exit
The survey generally covered program activities and grant expenditures during the period
October 1, 1998 through September 30, 2000. We extended the review to other periods when
deemed necessary to achieve the survey objective. The survey was conducted in accordance
with generally accepted government auditing standards.

                                        BACKGROUND

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

       •   Transitional housing;
       •   Permanent housing for homeless persons with disabilities;
       •   Supportive services for homeless persons not provided in conjunction with supportive
           housing; and
       •   Other types of innovative housing for homeless persons.

Macon-Bibb County EOC was established in 1965 as part of the Macon-Bibb County Planning
and Zoning Department. In 1985 EOC was incorporated as a private, nonprofit agency. EOC’s
mission is to provide the resources needed to help low income persons become self-sufficient.
EOC’s administrative office is located at 653 Second Street, Second Floor, Macon, Georgia.
EOC operates its transitional housing and supportive services program from its Homeless
Services Coordination Station (HSCS). HSCS is located at 742 Second Street, Macon, Georgia.

EOC does not receive direct grants from HUD, but serves as the project sponsor for two grants to
the Macon Housing Authority. HUD awarded the Macon Housing Authority a 1996 Supportive
Housing Program grant for $351,062 and a 1998 Supportive Housing Program grant for
$270,155. Both grants were made to provide assistance to the homeless population in the City of
Macon and in Bibb County.

                                          SUMMARY

The survey found no evidence to support the allegations that HUD funds were mismanaged and
annual reports concerning the use of HUD funds and SHP program results were improperly
altered. However, we found that the EOC had claimed, and was reimbursed, $5,148 for
ineligible costs and $185 for unsupported costs under its 1996 and 1998 SHP grants. Details of
these issues are in Attachment 1. A schedule of the ineligible and unsupported costs is provided
in Attachment 2.

We discussed these issues with EOC officials in an exit conference on October 25, 2001. EOC
officials stated they had interpreted the costs to be an eligible use of the grant funds and wished
to discuss this with HUD program officials. The EOC and HUD did not provide written replies
to the draft audit.



                                                2

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

If you have any questions, please contact Terry Cover, Assistant District Inspector General, at
(404) 331-3369.


Attachments:

1 – Finding and Recommendations
2 – Schedule of Ineligible and Unsupported Costs
3 – Distribution




                                               3

                                                                                     Exit
                                                                                   Attachment 1

Finding 1 – The EOC Claimed and Was Reimbursed For Ineligible and Unsupported Costs

The EOC claimed, and was reimbursed, $5,148 for ineligible costs and $185 for unsupported
costs. EOC received ineligible reimbursements of $5,148 from its 1996 transitional housing and
supportive services grant for the cost of Greyhound bus tickets. This occurred because EOC
interpreted the costs to be an eligible use of the grant funds. The 1996 grant provides funds for
the operation of four transitional housing units and one staff person to provide supportive
services. The grant did not provide funds to relocate homeless persons to other cities.

Section D of the SHP Desk Guide, Supportive Services, provides: “Almost any services aimed
at moving homeless participants to independence are eligible for SHP support.” Examples of
eligible services are cited such as childcare, health care, employment assistance and counseling.
Transportation to and from these services is also eligible. Discussion with HUD officials
confirmed that transportation not associated with such services was not an eligible cost.

An EOC official stated the bus tickets were used to transport homeless clients back home and to
work. He stated EOC staff called the client’s relatives and/or employer to verify that the person
has a place to live and work. The EOC official stated no other follow up is done.

We reviewed files on 27 clients who received bus tickets and noted 20 ineligible purchases. Bus
tickets were purchased for 14 persons who requested help to go and live in other cities. Three
other persons were stranded in Macon and requested help going to their existing homes in other
cities. Three additional files showed tickets were purchased for persons who had been on
personal trips when their cars broke down while passing through Macon. All three had jobs and
homes in other cities. Documentation that the people were homeless was inadequate in the
aforementioned 20 client files. One additional client file was missing. Additionally, 6 of the 20
client files did not show that the client’s relatives and employers were contacted to verify the
client had a place to live and/or work. EOC staff does not follow up on the clients after
providing a bus ticket to another city. Therefore, there is no assurance that the intent of the
program has been met. The intent of the program is to assist homeless persons in transition from
homelessness to permanent housing and self-sufficiency. The clients may not have reached their
destinations and if so they may have ended up homeless in other cities. The 1996 grant provides
funds for the operation of four transitional housing units and one staff person to provide
supportive services. It does not provide funds to relocate homeless persons to other cities.

In addition, EOC was reimbursed $185 for an unsupported cost from its 1998 case management
grant. EOC had no invoice to support a $185 payment for retail marketing services.

                                   RECOMMENDATIONS

We recommend that you require EOC to:

   1. Reimburse the SHP grant accounts for ineligible costs of $5,148. Instruct EOC to
      discontinue using grant funds to purchase bus tickets to relocate homeless persons to
      other cities.


                                               4

                                                                                     Exit
2. Provide support for the $185 retail marketing cost or reimburse the grant account for the
   unsupported cost.




                                           5

                                                                                 Exit
                                                                                  Attachment 2

                SCHEDULE OF INELIGIBLE AND UNSUPPORTED COSTS

                                        Ineligible Costs

  CHECK        CHECK        PAYEE1          AMOUNT                  BUS TICKETS FOR
 NUMBER         DATE
      109       4/15/98 Nationsbank           $119.60 Kelly and Allen
      291       5/22/98 Nationsbank             635.62 Rose, Smelzer, Wade, Simpson, Walters,
                                                       Levy, Jones, Johnson, and Yocum
        423     6/17/98   Nationsbank            71.10 Knox
        569     7/22/98   Nationsbank           185.35 Anderson, Smith, and Kitchens
         53     8/19/98   Nationsbank           104.52 Lee and Crabbe
        155     9/18/98   Nationsbank           382.32 Williams, Arrington, Stephen, Jennings,
                                                       Wood, Spencer, and Williams
        282    10/14/98 Nationsbank             380.25 Head, Gordon, and Wilson
        389    11/12/98 Nationsbank             147.65 Leverettt, Sapp, and Buchanan
        422    11/24/98 Bankcard Center         962.00 Allen, Jackson, Smith, Harpes, Reid, Pepper,
                                                       Thorp, Clay, and Riggis
        560      1/7/99   Bankcard Center       398.60 Billings, Greeman, Gelpi, and Matthew
        783     2/24/99   Bankcard Center       264.60 Tate, Green, and Szmanda
        939     3/26/99   Bankcard Center       149.00 Johnson
       1045     4/30/99   Bankcard Center       266.40 Davis, Forrey, and Williams
       1195     5/27/99   Bankcard Center       394.20 Green, Ortiz, Harbeson, Canton, and Hart
       1252      6/3/99   Bankcard Center       115.00 Sinonger
       1317     6/24/99   Bankcard Center       338.69 Edwards, Hightower, Trusskey, and Bramblett
       1514      8/5/99   Bankcard Center       351.87 Hubbard, Jones, Atkinson, Coleman, Green,
                                                       Davis, and Woods
        1601    8/26/99   Bankcard Center       124.76 Ellis, Green, and Rivera
        1742    9/23/99   Bankcard Center       263.30 Jones, Pico, Griner, and Jordan
        1911   10/28/99   Bankcard Center       167.07 Smith and Howze
        2332    12/2/99   Bankcard Center        84.60 Tiernan
        3331     2/3/00   Bankcard Center        31.49 Stovey
        3522    3/16/00   Bankcard Center        39.50 EOC
        3631    3/30/00   Bankcard Center        42.08 Jackson
        3905    4/27/00   Bankcard Center        72.00 Irvin
        4154     6/1/00   Bankcard Center       246.60 Bowers, Irvin, Hudson, and Willis
        4364    7/27/00   Bankcard Center       295.49 Williams, Whitman, and Henry
        4519    8/31/00   Bankcard Center        78.22 Youngblood, Kite, and Lee
        4692    9/29/00   Bankcard Center       347.97 Ford, Cutcher, Williams, Cone, and Winston
Subtotal                                     $7,059.85
Less Credits                                 $1,911.99
/Deposits2
Total Bus                                    $5,147.86
Tickets




                                               6

                                                                                     Exit
                                                                                                 Attachment 2

                  SCHEDULE OF INELIGIBLE AND UNSUPPORTED COSTS

UNSUPPORTED COSTS

   CHECK          CHECK          PAYEE                     AMOUNT
  NUMBER           DATE
       2332        12/2/99 Bankcard Center                   $185.00 No invoice for payment of retail
                                                                     marketing services.
Total                                                        $185.00


   1. The bus tickets were purchased with credit cards. Therefore, the payees are the credit card companies.
   2. Adjustment made for portion of ticket price that was paid for by other nonprofit agencies.




                                                       7

                                                                                                    Exit
                                        DISTRIBUTION

Executive Director, Macon Housing Authority, Macon, Georgia
Executive Director, Macon-Bibb Economic Opportunity Council
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)
Secretary's Representative, 4AS
Director, Office of Community Planning and Development, 4AD
Audit Liaison Officer, 3AFI
Audit Liaison Officer, Office of Public and Indian Housing, PF (Room P8202)
Departmental Audit Liaison Officer, FM (Room 2206)
Acquisitions Librarian, Library, AS (Room 8141)
Counsel to the IG, GC (Room 8260)



                                                8

                                                                                       Exit
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




                                               9

                                                                                    Exit