oversight

Congressionally Requested Audit of Section 514 Outreach and Training Assistance Grants Awarded to Coalition on Homelessness and Housing in Ohio; Columbus, Ohio Grant Numbers FFOT00031OH and FFOT98023OH

Published by the Department of Housing and Urban Development, Office of Inspector General on 2002-09-24.

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

                                            U.S. Department of Housing and Urban Development
                                            Office of Inspector General for Audit, Region V
                                            Ralph H. Metcalfe Federal Building
                                            77 West Jackson Boulevard, Suite 2646
                                            Chicago, Illinois 60604-3507

                                            Phone (312) 353-7832 Fax (312) 353-8866
                                            Internet http//www.hud.gov/oig/oigindex.html




                                                                            AUDIT MEMORANDUM
                                                                                    2002-CH-1802

September 24, 2002

MEMORANDUM FOR: Charles H. Williams, Director of Multifamily Housing Assistance
                  Restructuring, HY



FROM:         Heath Wolfe, Regional Inspector General for Audit, Region V

SUBJECT:      Congressionally Requested Audit of Section 514 Outreach and Training
              Assistance Grants Awarded to Coalition on Homelessness and Housing in Ohio;
              Columbus, Ohio; Grant Numbers FFOT00031OH and FFOT98023OH

                                     INTRODUCTION

We completed an audit of Coalition on Homelessness and Housing in Ohio’s Section 514
Outreach and Training Assistance Grants awarded under the Multifamily Assisted Housing
Reform and Affordability Act of 1997. The objectives of the audit were to determine whether
the Coalition had: management controls in place to ensure that Section 514 Grant funds were
used for eligible activities; and expended the Grant funds for any lobbying activities.

                              METHODOLOGY AND SCOPE

We reviewed Coalition on Homelessness and Housing in Ohio’s policies and procedures as they
pertained to our audit objectives for the period October 1, 1998 through April 1, 2002. We
accomplished the objectives by reviewing and evaluating the Coalition’s: management controls
over the Outreach and Training Assistance Grants; reliability of computer-processed data;
organizational structure; Board of Directors and the Outreach and Training Assistance Grant
Advisory Committee’s meeting minutes; property and stakeholder files; independent audit
reports for the Grant years reviewed; and the method used for allocating costs. In addition, we
reviewed bank statements, cancelled checks, and cash receipts and disbursements journals.
Using computer-assisted auditing techniques, we tested a sample of 151 from the 598 property
and stakeholder files serviced by the Coalition. We also tested all 380 transactions totaling
$131,531 of the Coalition’s telephone, conference, travel, and consultant expenditures. We
                                                                      Audit Memorandum


reviewed the Coalition’s audited financial reports for 1998, 1999, and 2000.

We reviewed Coalition on Homelessness and Housing in Ohio’s records, and HUD’s
records and files for the Coalition. We interviewed the Coalition’s staff and key staff
from HUD’s Office of Multifamily Housing Assistance Restructuring. We performed our
on-site audit work between April and June 2002. We conducted the audit in accordance
with Generally Accepted Government Auditing Standards.

                                    BACKGROUND

The Multifamily Assisted Housing Reform and Affordability Act of 1997 authorized
HUD’s Secretary to establish procedures to provide an opportunity for tenants of projects
and other affected parties to participate effectively and on a timely basis in the
restructuring process established by the Act. Section 514(f)(3)(A) of Multifamily
Assisted Housing Reform and Affordability Act of 1997 states in part that the Secretary
may make obligations to tenant groups, nonprofit organizations, and public entities for
building the capacity of tenant organizations for technical assistance in furthering any of
the purposes of the Act and for tenant services.

The Multifamily Assisted Housing Reform and Affordability Act of 1997 established
HUD’s Office of Multifamily Housing Assistance Restructuring to administer the Mark-
to-Market Program. The Office of Multifamily Housing Assistance Restructuring works
with property owners, participating administrative entities, tenants, lenders, and others
with a stake in the future of affordable housing.

HUD issued Notices of Funding Availability in Fiscal Years 1998 and 2000 to provide
opportunities for nonprofit organizations to participate in the Section 514 Grants
program. HUD provided two types of Grants—the Intermediary Technical Assistance
Grant and the Outreach and Training Assistance Grant. The Notice of Funding
Availability for the Intermediary Technical Assistance Grant program states that the
program provides funds through intermediaries to sub-recipients consisting of: (1)
resident groups or tenant affiliated community-based nonprofit organizations in properties
that are eligible under the Mark-to-Market Program to help tenants participate
meaningfully in the Mark-to-Market process, and have input into and set priorities for
project repairs; or (2) public entities to carry out Mark-to-Market related activities for
eligible projects throughout its jurisdiction. The Notices of Funding Availability for the
Outreach and Training Assistance Grant program states that the program is to provide
technical assistance to tenants of eligible Mark-to-Market properties so that tenants can:
(1) participate meaningfully in the Mark-to-Market program; and (2) affect decisions
about the future of their housing.

Coalition on Homelessness and Housing in Ohio was formed in 1994 as the result of a
merger between the Ohio Housing Coalition, which was founded in the 1970’s, and the
Ohio Coalition for the Homeless founded in 1984. The Coalition is an alliance of
organizations and individuals committed to ending homelessness and promoting decent,


                                          Page 2                               2002-CH-1802
                                                                       Audit Memorandum


safe, fair, and affordable housing for all with a focus on assisting low-income people and
those with special needs. The Coalition is a non-profit advocacy organization. William
Faith is the Coalition’s Executive Director. The Coalition is located at 35 East Gay
Street, Suite 210, Columbus, Ohio.

There are about 1,300 properties with approximately 83,000 units providing affordable
housing for some of the State of Ohio's lowest income households. The 20-year Section 8
Program contracts on these properties began to expire or will expire over the next few
years. Most of these properties are owned by for-profit businesses and have few
incentives to renew their Section 8 contracts. These owners may opt-out of the Section 8
Program and rent their units at market rates or choose to sell the properties. The
Coalition is educating diverse populations including tenants, community groups, financial
institutions, State and local government officials, and property owners about this issue.
The Outreach and Training Assistance Grant program provides for outreach and training
in the area of those properties with expiring Section 8 Program contracts in which rents
are above the fair market rent, and therefore eligible for the Mark-to-Market Program.

Coalition on Homelessness and Housing in Ohio: (1) identifies and advocates immediate
and long-term solutions to homelessness and effective housing policy and production at
the State, local, and national levels; (2) informs and raises the awareness of policy makers
and public makers about homelessness and the State of Ohio's housing needs; (3) fosters
communication, builds local alliances, and develops collaborative partnerships among
homeless service providers, housing providers, advocates, low-income and homeless
people, funding agencies, and governmental agencies; (4) assures the availability of
funding; (5) provides training and technical assistance to local organizations in the field;
and (6) works with other organizations for systematic change to end poverty.

The Outreach and Training Assistance Grant Agreement for Fiscal Years 1998 and 1999,
between Coalition on Homelessness and Housing in Ohio and HUD, for $400,000 was
signed on October 6, 1998. On January 9, 2001, the Outreach and Training Assistance
Grant Agreement for Fiscal Years 2000 and 2001 in the amount of $450,000 was signed.
On March 18, 2002, HUD’s Office of Multifamily Housing Assistance Restructuring
notified the Coalition that the authorized amount for the Fiscal Years 2000 and 2001
Grant was reduced from $450,000 to $261,680. As of April 1, 2002, the Coalition
expended all of the Fiscal Years 1998 and 1999 Grant and $35,252 of the Fiscal Years
2000 and 2001 Grant. The Coalition’s 1998, 1999, and 2000 financial audits, which were
prepared according to Office of Management and Budget Circular A-133, reported no
deficiencies that related to our audit objectives.

                                RESULTS OF REVIEW

We found no material reportable conditions based upon our audit objectives. The
Coalition properly managed the two Outreach and Training Assistance Grants and
assured that Grant funds were used for eligible purposes. The Coalition had adequate
controls in place to preclude paying lobbying expenses with Grant monies. The Coalition


                                        Page 3                                2002-CH-1802
                                                                  Audit Memorandum


used American Fundware software system to track each employee’s time spent on each
activity, including lobbying. The system was set up so that each Grant had its own
account number detailing how the funds were spent.

We discussed our audit results with the key staff from HUD’s Office of Multifamily
Housing Assistance Restructuring on September 20, 2002. A copy of this memorandum
was provided to the Coalition’s Executive Director. We appreciate the courtesies and
assistance extended by the Coalition’s personnel during our audit.

Should you or your staff have any questions, please have them contact Thomas Towers,
Assistant Regional Inspector General for Audit, at (313) 226-6280 extension 8062 or me
at (312) 353-7832.




                                     Page 4                              2002-CH-1802
                                                                          Appendix A

Distribution Outside Of HUD
The Honorable Barbara A. Mikulski, Chairperson, Subcommittee on Veterans Affairs,
       HUD, and Independent Agencies, 709 Hart Senate Office Building, United States
       Senate, Washington, DC 20510
The Honorable Christopher S. Bond, Ranking Member, Subcommittee on Veterans
       Affairs, HUD, and Independent Agencies, 274 Russell Senate Office Building,
       United States Senate, Washington, DC 20510
The Honorable Joseph Lieberman, Chairman, Committee on Government Affairs, 706
       Hart Senate Office Building., United States Senate, Washington, DC 20510
The Honorable Fred Thompson, Ranking Member, Committee on Governmental Affairs,
       340 Dirksen Senate Office Building, United States Senate, Washington, DC
       20510
The Honorable Dan Burton, Chairman, Committee on Government Reform, 2185
       Rayburn Building, House of Representatives, Washington, DC 20515
The Honorable Henry A. Waxman, Ranking Member, Committee on Government
       Reform, 2204 Rayburn Building., House of Representatives, Washington, DC
       20515
Andy Cochran, Committee on Financial Services, 2129 Rayburn House Office Building,
       United States House of Representatives, Washington DC 20515
Clinton C. Jones, Senior Counsel, Committee on Financial Services, B303 Rayburn
       Building, United States House of Representatives, Washington DC 20515
Sharon Pinkerton, Senior Advisor, Subcommittee on Criminal Justice, Drug Policy &
       Human Resources, B373 Rayburn House Office Building, United States Housing
       of Representatives, Washington, DC 20515
Stanley Czerwinski, Director, Housing and Telecommunications Issues, United States
       General Accounting Office, 441 G Street, NW, Room 2T23, Washington, DC
       20548
Steve Redburn, Chief of Housing Branch, Office of Management and Budget, 725 17th
       Street, NW, Room 9226, New Executive Office Building, Washington, DC 20503
Linda Halliday (52P), Department of Veterans Affairs, Office of Inspector General, 810
       Vermont Avenue, NW, Washington, DC 20420
William Withrow (52KC), Department of Veterans Affairs, Office of Inspector General
       Audit Operations Division, 1100 Main, Room 1330, Kansas City, Missouri
       64105-2112
Kay Gibbs, Committee on Financial Services, 2129 Rayburn House Office Building,
       United States House of Representatives, Washington DC 20515
George Reeb, Assistant Inspector General for Health Care Financing Audits
William Faith, Executive Director of Coalition on Homelessness and Housing in Ohio




                                        Page 5                            2002-CH-1802