oversight

Casa de Vallejo - Multifamily Senior Housing Project, Casa de Vallejo, CA

Published by the Department of Housing and Urban Development, Office of Inspector General on 2002-09-04.

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

       AUDIT REPORT




         CASA DE VALLEJO

MULTIFAMILY SENIOR HOUSING PROJECT

       VALLEJO, CALIFORNIA

            2002 -SF- 1001

          September 04, 2002


       OFFICE OF AUDIT, REGION IX
       SAN FRANCISCO, CALIFORNIA
                                                                  Issue Date
                                                                          September 04, 2002
                                                                 Audit Case Number
                                                                          2002-SF-1001




TO:            Janet Browder, Director
               San Francisco Multifamily Hub, 9AHM

               // SIGNED//
FROM:          Mimi Y. Lee
               Regional Inspector General For Audit, 9AGA

SUBJECT:       Casa de Vallejo
               Multifamily Senior Housing Project
               Vallejo, California

At the request of your office, we conducted an audit of Casa de Vallejo’s operations. We
determined the management agent generally complied with the rules and regulations governing
property maintenance and its Section 8 program. However, we identified serious problems with its
use of project funds and assets and its failure to properly complete the Monthly Report for
Establishing Net Income. Also, the project has some deferred maintenance as noted in finding 1.
Our report contains two findings addressing these issues with recommendations requiring action by
your office.

In accordance with HUD Handbook 2000.06 REV-3, within 60 days please provide us, for each
recommendation without management decisions, 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. Additional status reports are required at 90 days and 120 days after report issuance for
any recommendations without a management decision. Also, please furnish us copies of any
correspondence or directives issued because of the audit.

Should you or your staff have any questions, please contact me at (415) 436-8101.
Management Memorandum




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2002 SF 1001              Page ii
Executive Summary
We reviewed selected areas of Casa de Vallejo’s books and records, generally covering the
period January 1, 1998 through December 31, 2000. Our primary objectives were to assess
the management agent’s performance relating to: (1) use of project funds in accordance
with the Code of Federal Regulations (CFR), Housing and Urban Development (HUD)
Handbook requirements, the Regulatory Agreement, and the Housing Assistance Payments
(HAP) contract; (2) maintenance of the property in a satisfactory physical condition in
accordance with HUD’s Uniform Physical Condition Standards; (3) performance of
revenue procedures; and (4) implementation of other general management practices.

The audit disclosed serious problems in the use of project funds and failure to properly
complete the Monthly Report for Establishing Net Income that need immediate attention.



                                  The management agent did not always use project funds for
 The Management Agent             the operation and maintenance of the project in accordance
 Used Project Funds For           with Federal regulations, the Regulatory Agreement, and
 Inappropriate Purposes           the HAP contract.        Specifically, we noted repeated
                                  instances where (1) rental income was used to subsidize the
                                  food and maid service programs, (2) project funds were
                                  used to pay non-project expenses (some of which were later
                                  reimbursed to the project), and (3) some of Casa de
                                  Vallejo's expenses were not supported by adequate
                                  documentation.

                                  As a result, Casa de Vallejo’s limited resources were wasted
                                  to pay for items that did not benefit the project. Rental
                                  income was used to subsidize the project’s food and maid
                                  service programs in the amount of $48,829. In addition to
                                  the $86,930 spent on ineligible items, costs of $8,263 remain
                                  unsupported, and the security deposit account was deficient
                                  by $23,884 as of July 31, 2001.

                                  As a result of unauthorized distributions made in 1996,
 The Monthly Report For           HUD and the managing general partner of Casa de Vallejo
 Establishing Net Income          Associates entered into a Memorandum of Agreement
 Was Not Properly                 (MOA) in February 1998. HUD now requires Casa de
 Completed                        Vallejo to provide a Monthly Report for Establishing Net
                                  Income each month so HUD can monitor the project and be
                                  assured the management agent is not making further
                                  unauthorized distributions. However, the management
                                  agent did not properly complete the required report.
                                  Specifically, we noted the following types of errors: (1) all
                                  income and disbursements were not reflected on the report,


                                      Page iii                                     2002 SF 1001
Executive Summary


                             (2) some checks listed on the report as void cleared the bank,
                             (3) the calculation of rent lost on vacant units was not
                             properly calculated, and (4) the tenant security deposits
                             funded in a separate account was not accurately reported.
                             Thus, HUD cannot rely on the monthly accounting reports
                             to monitor compliance with Federal regulations, HUD
                             Handbook requirements, and the terms of the MOA or to
                             evaluate project performance.

                             We provided Casa de Vallejo’s management with a draft
 Casa de Vallejo Generally   audit report and obtained its written comments. We also
 Agreed With The Audit       discussed the audit results with its property manager on
 Findings                    June 10, 2002 and provided a copy of the requested cost
                             breakdown. Casa de Vallejo’s response is included, in its
                             entirety, as Appendix B to this report.

                             In general, Casa de Vallejo’s management agreed with the
                             report’s findings. However, its response did not specifically
                             address the recommendations.

                             In her written response, the property manager disagreed with
                             one particular ineligible cost, but also stated the many
                             changes Casa de Vallejo plans to implement so the reported
                             violations will not be repeated in the future. The property
                             manager also requested a further breakdown of specific costs
                             to complete an appropriate response and create a
                             reimbursement schedule.

                             We considered Casa de Vallejo’s comments and made
                             revisions to the report when appropriate. Our conclusions
                             did not change significantly. Each finding summarizes Casa
                             de Vallejo’s comments and our evaluation.

                             The findings include recommendations to avoid the
 Recommendations             continuance of the above problems and to mitigate their
                             effects. The more significant recommendations call for the
                             management agent to discontinue its practice of using rental
                             income to subsidize its food and maid service programs, and
                             reimburse the project for ineligible costs of $110,814 and
                             unsupported costs of $8,263. Also, HUD needs to increase
                             its monitoring of Casa de Vallejo’s monthly income and
                             disbursements reports.




2002 SF 1001                     Page iv
Table of Contents
Management Memorandum                                                i



Executive Summary                                                  iii



Abbreviations                                                       vi



Introduction                                                        1



Findings

1. The Management Agent Used Project Funds For Inappropriate
   Purposes                                                         5

2. The Monthly Report For Establishing Net Income Was Not Properly
   Completed                                                     21


Management Controls                                               27


Follow Up On Prior Audits                                         29



Appendices
  A Schedule of Questioned Costs                                  31




                             Page v                       2002 SF 1001
Table of Contents


   B Auditee Comments                 33

   C Distribution Outside of HUD      41




2002 SF 1001                Page vi
Table of Contents




Abbreviations

CFR                 Code of Federal Regulations

FASSMF              Financial Assessment Subsystem – Multifamily Housing

HAP                 Housing Assistance Payments contract

HUD                 U.S. Department of Housing and Urban Development

MOA                 Memorandum of Agreement

OIG                 Office of Inspector General




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Table of Contents




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                     Page viii       2002 SF 1001
Introduction
The major HUD programs affecting Casa de Vallejo are the Section 8 rental assistance
program and HUD’s mortgage insurance program. Under these programs, HUD subsidizes
the cost of housing low-income elderly tenants at Casa de Vallejo, and provides mortgage
insurance for the project’s owners.



                                 The present owners, Casa de Vallejo Associates, purchased
 The Project Was                 Casa de Vallejo on July 7, 1978. The primary purpose for
 Purchased By Its Present        the purchase was to provide housing, care, and feeding of
 Owners In 1978                  some of the growing elderly population of the area. Casa
                                 de Vallejo Associates is a partnership. Ownership of the
                                 property is profit-motivated.

                                 The property is managed by H&B Developers. Although
 There Is An Identity Of         there are two distinct partnerships, Casa de Vallejo
 Interest Between The            Associates and H&B Developers, they largely consist of the
 Owner And Management            same people. H&B Developers is the primary partner of
 Agent                           Casa de Vallejo Associates. The property manager has an
                                 interest in the property as she shares a 12% interest in Casa
                                 de Vallejo Associates and she owns an interest of
                                 approximately 0.59% in H&B Developers. Also, her father
                                 is the managing general partner of Casa de Vallejo
                                 Associates and H&B Developers.

                                 The family of the managing general partner owns 29.25% of
                                 Casa de Vallejo Associates. The managing general partner
                                 of Casa de Vallejo Associates and his daughter, Casa de
                                 Vallejo’s property manager, operate and control the project.
                                 They have been operating the project as a family business
                                 and using projects funds as if the project was purely a family
                                 business. Thus, there is an identity of interest between the
                                 owner and manager. In this situation, the property is
                                 actually owner managed.

                                 The project is located in Vallejo, California and has 136
                                 units consisting of 71 studio apartments, 19 alcove
                                 apartments, and 46 one-bedroom apartments. Each unit
                                 includes a kitchenette (sink, refrigerator, cooktop, hood,
                                 and cabinets).




                                      Page 1                                      2002 SF 1001
Introduction




                    The audit was initiated based on a request from HUD
 Audit Objectives   management due to specific concerns Casa de Vallejo had
                    not timely responded to its latest HUD Management
                    Review and its latest Real Estate Assessment Center
                    Financial Statement Review. Due to these concerns, and the
                    results of our survey work, our primary audit objectives were
                    to determine whether:

                    ·   Casa de Vallejo was using its rental income in a manner
                        consistent with the CFRs, HUD Handbook requirements,
                        the Regulatory Agreement, and the HAP contract.

                    ·   Casa de Vallejo maintained the property in a satisfactory
                        physical condition in accordance with HUD’s Uniform
                        Physical Condition Standards.

                    ·   Casa de Vallejo used sound business practices in relation
                        to its revenue procedures.

                    Our audit generally covered the period January 1998 through
 Audit Scope and
                    April 2001. Where appropriate, we extended the review to
 Methodology
                    include other periods. We performed audit work from April
                    2001 through February 2002. We conducted the audit in
                    accordance with generally accepted government auditing
                    standards.

                    The primary methodologies for the audit included:

                    ü Consideration of Casa de Vallejo’s management control
                      structure and the assessment of risk.

                    ü Tests of selected financial activities and transactions.

                    ü Interviews of various Casa de Vallejo employees and
                      HUD officials acquainted with Casa de Vallejo.

                    ü Reviews of documentation relevant to HUD’s
                      Multifamily Housing and Section 8 housing programs.

                    ü Review of Casa de Vallejo’s Section 8 program
                      practices.



2002 SF 1001            Page 2
                                             Introduction


ü Reviews of documentation relevant to HUD’s mortgage
  insurance program.

ü Review of Casa de Vallejo’s maintenance practices.

ü Review of Casa de Vallejo’s Monthly Report For
  Establishing Net Income




    Page 3                                    2002 SF 1001
Introduction




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2002 SF 1001    Page 4
                                                                                        Finding 1


          The Management Agent Used Project
           Funds For Inappropriate Purposes
The Casa de Vallejo’s management agent did not always use project funds for the
operation and maintenance of the project in accordance with Federal regulations, the
Regulatory Agreement, and the HAP contract. Specifically, we noted repeated instances
where (1) rental income was used to subsidize the food and maid service programs, (2)
project funds were used to pay non-project expenses (some of which were later reimbursed
to the project), and (3) some of Casa de Vallejo's expenses were not supported by adequate
documentation.

As a result, Casa de Vallejo’s limited resources were wasted to pay for items that did not
benefit the project. Rental income was used to subsidize the project’s food and maid service
programs in the amount of $48,829. In addition to the $86,930 spent on ineligible items, costs
of $8,263 remain unsupported, and the security deposit account was deficient by $23,884 as of
July 31, 2001.



                                    The management agent stated at various times throughout the
 Rental Income Was Used             year its operating (food and maid service) account is
 To Subsidize The                   occasionally short of funds. When this happens, funds are
 Project’s Food and Maid            transferred to the operating account from the regular (rental)
 Service Programs                   account.     During the period January 1998 through
                                    September 2001, the rental program subsidized the food
                                    and maid service programs in the amount of $48,829 as
                                    follows: (1) $8,300 for 1998; (2) $22,529 for 1999; (3)
                                    $12,000 for 2000; and (3) $6,000 for the first nine months
                                    of 2001.

                                    Federal regulations at 24 CFR 278.20 provide that mandatory
                                    food services are not to be subsidized from rental income.
                                    HUD program staff interpret this CFR cite to include
                                    mandatory maid service and food services as areas rental
                                    income should not be subsidizing.

                                    This condition exists because the management agent
                                    disregarded Federal regulations. The management agent
                                    admitted to knowing the law requires the funds in the
                                    operating, regular, and security deposit accounts to be kept
                                    segregated. The reasons given for this disregard is the food
                                    and maid service programs are not generating enough net


                                        Page 5                                       2002 SF 1001
Finding 1


                           income to be fully self-sufficient. Also, since 1995, the
                           project has not applied for, nor has it received, an increase in
                           food and maid service fees. The reasons it had not applied
                           for an increase was because it was trying to sell the property,
                           and as a result, did not think it would need to deal with an
                           increase. Further, it had a strained relationship with the prior
                           HUD project manager. It is obvious the project is not
                           generating enough income to operate its food and maid
                           service programs on a self-sufficient basis.

                           During the course of our audit, we determined project funds
 Project Funds Were Used
                           were used to pay for ineligible costs of $86,930. These
 To Pay Non-Project
                           ineligible costs included: (1) $60,587 for loans, (2) $11,346
 Expenses
                           for personal expenses, (3) $6,643 for donations and
                           contributions, (4) $5,280 in assets distributed when the
                           project was in a non-surplus cash position, (5) $1,582 in
                           excessive management fees, and (6) $1,492 for projects
                           unrelated to Casa de Vallejo.

                           Our review noted $8,263 of unsupported costs as follows:
                           (1) $4,245 in payments to various project vendors, (2)
                           $2,753 in payments to American Express, and (3) $1,265 in
                           payments to project employees.

                           Our review also disclosed Casa de Vallejo’s tenants’ security
                           deposit account is not always appropriately funded. We
                           determined Casa de Vallejo used $20,000 it borrowed from
                           Clayton Ranch Investors at the end of year 2000 to fund this
                           account. As of July 31, 2001, this account was again
                           deficient by $23,884.

                           The foregoing questioned costs are identified in Appendix
                           A.

                           These conditions existed as a result of the management
 Funds Must Be Used For
                           agent’s disregard for Federal regulations and HUD rules.
 The Benefit Of The
                           Federal regulations at 24 CFR 881.601(e)(1) provide that
 Project
                           project funds must be used for the benefit of the project.

                           The Agreement to Enter Into Housing Assistance Payments
                           Contract, signed by HUD and Casa de Vallejo Associates’
                           managing general partner, states in part: “Project funds must
                           be used for the benefit of the project, to make mortgage
                           payments, to pay operating expenses, to make required


2002 SF 1001                    Page 6
                                                  Finding 1


deposits to the replacement reserve in accordance with
paragraph (c) of this section…”

The Regulatory Agreement signed by HUD and Casa de
Vallejo Associates’ managing general partner, says: “Owners
shall not without the prior written approval of the
Secretary…

b. Assign, transfer, dispose of, or encumber any personal
   property of the project, including rents, or pay out any
   funds except from surplus cash, except for reasonable
   operating expenses and necessary repairs. (Emphasis
   added).

d. Remodel, add to, reconstruct, or demolish any part of the
   mortgaged property or subtract from any real or personal
   property of the project.

e. Make or receive and retain, any distribution of assets or
   any income of any kind of the project except from
   surplus cash and except on the following conditions:

   1. All distributions shall be made only as of and after
      the end of a semiannual or annual fiscal period, and
      only as permitted by the law of the applicable
      jurisdiction…”

The February 1998 MOA between HUD and the managing
general partner states any further borrowing of project
funds and any further distributions outside of surplus cash
are violations of the Regulatory Agreement and the matter
will be referred for legal remedy.

Federal regulations at 24 CFR 881.608(b) state: “The
owner must place the security deposits in a segregated,
interest-bearing account. The balance of this account must
at all times be equal to the total amount collected from the
families then in occupancy, plus any accrued interest.”

The borrowing of project funds for a personal loan,
payment of personal expenses, and expenses for properties
not related to the project identified below are examples of
further borrowing of project funds. The repayment of an
unsecured loan, payment of donations, disposition of


    Page 7                                      2002 SF 1001
Finding 1


                         project assets, and excessive management fees identified
                         below are examples of further distributions when the
                         project was in a non-surplus cash position.

                         Casa de Vallejo’s Independent Public Accountant, in its
 The Management Agent    report on Casa de Vallejo’s 1996 financial statements, states
 Repaid An Unsecured     withdrawals of cash for non-project expenses cannot be
 Loan When The Project   made without prior HUD approval. In response, on
 Was In A Non-Surplus    March 31, 1997, the management agent acknowledged it
 Cash Position           should not make payments of interest on unsecured notes.
                         The Chief of HUD’s Asset Management Branch followed up
                         by informing the management agent on May 1, 1997 it
                         couldn’t make payments of interest on unsecured loans when
                         the project was in a non-surplus cash position.

                         During November 2000, the owner borrowed $40,000 from
                         Clayton Ranch Investors. Half of this amount was
                         deposited into the tenants’ security deposit account. This
                         brought the balance in this account in line with the amount
                         that should have been in the account. The rest of the
                         borrowed money was accounted for in Casa de Vallejo’s
                         general ledger suspense account. In February 2001, the
                         management agent used project funds to repay the $40,000
                         unsecured loan. Casa de Vallejo was in a non-surplus cash
                         position at the end of its 2000 fiscal year. Therefore, this
                         payment was in violation of the surplus cash requirements
                         stated above.

                         This distribution of project funds without a prior surplus
                         cash determination is a violation of the Regulatory
                         Agreement and the provisions of the MOA.

                         Using project funds, Casa de Vallejo’s management agent
 Project Funds Were
                         loaned more than $20,000 to an attorney. On September 30,
 Loaned To An Attorney
                         1999, a journal entry was made to record $20,587 taken from
                         the regular bank account and transferred and allocated
                         between the miscellaneous financial expenses, legal expenses
                         (account 6340), and accounts receivable accounts. The
                         management agent stated $5,000 was for a legal retainer and
                         $15,000 was a loan to the attorney. The management agent
                         further stated $587 was for some sort of interest it could not
                         explain.




2002 SF 1001                 Page 8
                                                                                Finding 1


                           The Industry User Guide for the Financial Assessment
                           Subsystem – Multifamily Housing (FASSMF) provides
                           instructions for accessing and using the FASSMF. This
                           publication states in Appendix A, general ledger account
                           6340 is to be used for legal fees related to the project such as
                           fees incurred for eviction procedures. It further states legal
                           fees related to the mortgagor entity are to be recorded in
                           account 7120. However, HUD Handbook 4370.2 REV-1,
                           Chapter 4-4, states expenses may be charged to the 7000
                           series accounts only with prior written approval from HUD.

                           The legal services to be provided were related to the sale or
                           refinancing of the property. Therefore, these expenses are
                           mortgagor expenses and are the responsibility of the owners
                           of the project. These expenses should have been recorded on
                           Casa de Vallejo’s books as mortgagor expenses, subject to
                           prior approval by HUD. Casa de Vallejo did not account for
                           these expenses as mortgagor expenses.

                           The loan to the attorney and the interest are non-project
                           expenses as well.     On our final day of fieldwork,
                           November 11, 2001, the management agent stated the project
                           had been reimbursed $10,000 and we verified that amount.

                           This borrowing of funds from the project accounts is a
                           violation of the Regulatory Agreement and the provisions of
                           the MOA.

                           The management agent used project funds to pay for several
Project Funds Were Used    personal expenses. During our review, we noted $11,346 in
To Pay Personal Expenses   personal expenses were paid using project funds. As a result
For The Management         of our audit, $2,438 has been reimbursed to the project.
Agent And The Property
Manager                    Casa de Vallejo policy states employees are responsible for
                           the costs of dependent health and dental care. Employees
                           with dependents have been responsible for paying for their
                           dependents’ health and dental care. Contrary to Casa de
                           Vallejo policy, the management agent used project funds
                           from 1998 through 2000 to pay $7,915 for medical and
                           dental insurance premiums for the property manager’s son.
                           The project accounts should be reimbursed $7,915 for these
                           personal expenses.




                                Page 9                                        2002 SF 1001
Finding 1


                            Our review also noted project funds of $3,431 were used to
                            purchase various personal items for the benefit of the
                            management agent and the property manager. These
                            personal items included items such as refrigerator service and
                            a new refrigerator for the property manager, cigarettes,
                            clothing, books, gifts, and miscellaneous items for the
                            property manager and the management agent. During and
                            subsequent to our fieldwork, we verified reimbursement of
                            $2,438 to the project’s accounts for some of these personal
                            expenses. Thus, $2,438 of the $3,431 has been reimbursed
                            to the project for these personal items.

                            None of the $11,346 in personal expenses paid using project
                            funds benefited the project. Thus, these expenditures are a
                            violation of 24 CFR 881.601(e)(1) and the HAP contract.
                            They also violate the Regulatory Agreement since the
                            personal expenses are not reasonable operating expenses,
                            which the project should incur. The projects accounts should
                            be reimbursed for the remaining $993.

                            The management agent made several charitable donations
 Charitable Donations And   and political contributions with project funds. We identified
 Political Contributions    political contributions of $4,006 in 1998 and $5,026 in 1999
 Were Made With Project     for which the management agent reimbursed the project on
 Funds                      November 18, 1999, and $3,039 in 2000 for which the
                            management agent reimbursed the project on March 15,
                            2001. We also identified charitable donations of $2,156 for
                            1998 and $1,500 for 1999 for which the management agent
                            reimbursed the project on November 18, 1999. All of these
                            disbursements and reimbursements occurred prior to our
                            audit.

                            In his May 10, 2001 letter to the managing general partner of
                            Casa de Vallejo Associates, the HUD Asset Management
                            Team Leader explained donations and contributions are not
                            allowable project expenses. These expenses should come
                            from the management agent’s funds. Further, the team
                            leader required evidence the management agent reimbursed
                            the project for any donations made.

                            However, we identified $6,643 of donations the management
                            agent made with project funds that have not yet been
                            reimbursed to the project. These donations are summarized
                            in the following table.


2002 SF 1001                    Page 10
                                                                           Finding 1



                       Organization           Purpose                Amount
                       Various Agencies       Donations                       $1,465
                       Vallejo Chamber of     Membership                       1,073
                       Commerce               Investment
                       Christian Church       Bakery Training                   1,000
                       Homes                  Program
                       Christian Help         Turkeys at                        1,000
                       Center                 Thanksgiving
                       Martin Luther King     Donation                            500
                       Jr. Committee
                       Vallejo Chamber of     Fund-raising Golf                   500
                       Commerce               Tournament
                       Vallejo                Sponsorship                         500
                       Neighborhood           donation for a
                       Housing Services       fashion show fund-
                                              raiser
                       Sutter Solano          Fashion                             355
                       Medical Center         show/luncheon
                       Little League Team     Sponsorship                        250
                       Total                                                  $6,643

                       We agree with HUD’s determination the use of project funds
                       to pay for charitable donations and political contributions are
                       unallowable project expenses. Thus, HUD should require
                       the management agent to return $6,643 to the project’s
                       accounts.

                       This is a violation of the Regulatory Agreement, which states
                       without the prior written approval of HUD, project funds
                       may be used only for reasonable operating expenses and
                       necessary repairs. Donations are not an example of either
                       reasonable operating expenses or necessary repairs.

                       The management agent disposed of two project vehicles
The Management Agent
                       without HUD approval. One vehicle was sold to H&B
Disposed Of Project
                       Developers at a reasonable price. However, the other
Assets
                       vehicle, a van, was given away to the property manager. The
                       van was fully depreciated, but it still had value.

                       Nineteen months prior to giving the van to the property
                       manager, project funds in the amount of $1,308 were paid for
                       cosmetic repairs to the van. The repair was needed because
                       the property manager hit a post in the project garage. The


                           Page 11                                       2002 SF 1001
Finding 1


                           management agent did not make an insurance claim so that
                           insurance rates would not be raised. Then, two months prior
                           to giving the van to the property manager, project funds were
                           used to pay for $3,089 in major engine repairs to the van.
                           We determined the Kelly Blue Book value of the vehicle as
                           of October 12, 2001 (the date we reviewed this transaction)
                           was $5,280. Accordingly, the project accounts should be
                           reimbursed for $5,280.

                           HUD regulates the management fee paid with project funds
 The Management Agent      on residential, commercial, and garage rental income. In
 Was Paid Excessive Fees   1998 and 1999, this fee was 6 percent of rental income.
                           Regardless of this limitation, the management agent was
                           overpaid $1,013 in 1998. However, this was offset by a $310
                           underpayment in 1999.

                           In 2000, the management fee allowed was increased to 6.505
                           percent on residential rental income but was limited to
                           $41.50 per unit per month or $5,644 per month.
                           Management fees on commercial and garage rental income
                           remained at 6 percent. However, instead of charging 6.505
                           percent of rental income, the management agent began
                           charging a flat fee each month of $5,644 regardless of rental
                           income. As a result, the management agent was overpaid
                           $219 on residential rental income and $93 on commercial
                           and garage rental income in 2000. The management agent
                           was also overpaid $460 over the period January 2001
                           through July 2001.

                           The April 2000 management fee payment included an
                           unidentified overpayment of $107. Therefore, over the
                           period of our review, the management agent was paid $1,582
                           in excess management agent fees, which should be
                           reimbursed to the project accounts.

                           During our review, we noted two instances in which the
 Project Funds Were Used   management agent used a total of $3,646 in project funds to
 To Pay Expenses Of        pay expenses incurred by projects not related to Casa de
 Projects Not Related To   Vallejo.
 Casa de Vallejo
                           The management agent spent $1,492 for flooring for the
                           house of a friend. The management agent stated the purpose
                           of this payment was so the owner could bring the house up to
                           code in order that a Casa de Vallejo employee, about to


2002 SF 1001                   Page 12
                                                                            Finding 1


                         become homeless, could live there under the Section 8
                         program. The $1,492 was reimbursed to the project as a
                         result of our review.

                         We also noted the management agent used project funds to
                         pay for $2,154 in construction bills for a friend who was new
                         to the area and could not get credit from local supply
                         companies. However, the $2,154 was reimbursed to the
                         project prior to our audit.

                         The use of project funds to pay for expenses unrelated to
                         Casa de Vallejo are also violations of 24 CFR 881.601(e)(1),
                         the Regulatory Agreement, and the HAP contract.

                         Casa de Vallejo was unable to provide adequate supporting
Some Of Casa de
                         documentation for $8,263 in transactions for goods and
Vallejo’s Expenditures
                         services. Specifically, we determined $4,245 in payments to
Were Not Supported By
                         project vendors, $2,753 in payments to American Express,
Adequate Documentation
                         and $1,265 in payments to employees, were not supported by
                         adequate documentation such as receipts. Accordingly, we
                         question these costs for the reasons indicated below.

                         Project Vendors. We determined $4,245 in payments to
                         various project vendors were not adequately supported. The
                         only documentation provided in support of these
                         transactions was the Casa de Vallejo check written to pay
                         these amounts. In one instance, the property manager
                         attached a note to the check indicating the payment was for
                         rental of parking spaces. However, there were no third-
                         party invoices or other documentation showing what
                         services were provided and whether the services were
                         necessary and reasonable for the operation of the project.

                         ·   C.R. Fireline, $1,599;
                         ·   Lipsey’s Muffler and Tire Repair, $1,076;
                         ·   Rental of employee parking spaces, $600; and
                         ·   NEBS, $970.

                         American Express. Payments to American Express in the
                         amount of $2,753 were only supported by American Express
                         bills. The following individual charges were not supported
                         by receipts from the company detailing the items purchased.
                         Therefore, individual items purchased were not identified



                             Page 13                                     2002 SF 1001
Finding 1


                           and we were unable to determine whether they were
                           necessary and reasonable for the operation of the project.

                           ·   Purchases at Kinko’s, Office Depot, PT TLC Computer,
                               and Sleeter/Quickbooks in the amount of $888;
                           ·   Office Depot in the amount of $685;
                           ·   Office Depot and Costco in the amount of $987; and
                           ·   Circuit City in the amount of $193.

                           Employees. The management agent made payments to
                           employees in the amount of $1,265 without supporting
                           documentation.

                           ·   A $465 payment was made to Petty Cash to reimburse
                               the account for payments of $320 to the project’s
                               assistant manager and $145 to another person. There was
                               no documentation to support these payments.
                           ·   The vending supplies account was booked for $800 in
                               payments made to the project’s assistant manager
                               without any supporting documentation.

                           Casa de Vallejo borrowed $20,000 to bring the year-end
 The Tenants’ Security
                           tenants’ security deposit asset account to a greater level
 Deposit Account Was Not
                           than its liability account as of December 31, 2000. This
 Always Fully Funded
                           way, its FY 2000 financial statements would show an
                           appropriate amount funded in a separate security deposit
                           account. Similarly, the general ledger as of July 31, 2001
                           showed the amount funded in a separate account was
                           deficient by $23,884.

                           When we discussed this issue, the property manager stated
                           that throughout the year, the rental, food, and maid service
                           accounts are occasionally short on cash. When this occurs,
                           they borrow from the security deposit accounts through a
                           bank transfer to cover the shortage. Then, they deposit the
                           money back into the account as soon as they can.

                           Security deposits are not project assets until a tenant
                           vacates and the owner determines rent is due or there are
                           damages to the unit. At that time, the deposit is used to pay
                           for the rent due and any damages to the unit with any
                           excess deposits returned to the tenant. If there is no rent
                           due and no damages to the unit, the deposit is returned to
                           the tenant. When the project uses security deposits for


2002 SF 1001                   Page 14
                                                                                 Finding 1


                            inappropriate purposes, the project may not be able to
                            return the security deposits balance to tenants through the
                            Security Deposit account.

                            This borrowing of funds from the tenants’ security deposit
                            account is a violation of 24 CFR 881.608(b).

                            As a result of the preceding issues, Casa de Vallejo
The Project Violated
                            Associates is in violation of 24 CFR 278.20, 881.601(e)(1),
Various Rules and
                            881.608(b), paragraph 8 of the Regulatory Agreement,
Regulations
                            Section II, Part 2.6(b)(1) of the HAP contract, and the
                            provisions of the February 1998 MOA.

                            One effect of the improper expenditures was the funds used
The Improper Practices
                            to pay for these expenditures were no longer available for the
Wasted Critical Resources
                            operation and maintenance of the project. This led to low
                            cash balances and an ever-increasing net loss position.
                            These project actions also affect HUD by raising the risk of
                            loan default because the project may be headed to a
                            financially unstable position.

                            The management agent used project funds for uses other than
                            project related expenses; as a result, the project began to
                            suffer both financially and physically. Casa de Vallejo’s
                            cash balance has steadily declined from 1998 to 2000. Its
                            balance sheet showed a cash balance of $88,539 for 1998,
                            $2,258 for 1999, and zero for 2000.

                            Casa de Vallejo’s rental income is intended for use in
                            maintaining the property. Rental income should have been
                            used to replace the roof and paint the exterior of the building.
                            A tenant had to be removed from one particular unit to
                            another five times within a six to eight month period because
                            of a leak in the roof. The management agent has identified
                            the needed repair to HUD, but Casa de Vallejo does not have
                            the money to pay for the repair.

                            Also as a result of improper use of project rental income, the
                            management agent violated Federal regulations in borrowing
                            tenants’ security deposits. Thus, the tenants’ security deposit
                            account was not always fully funded.




                                Page 15                                        2002 SF 1001
Finding 1



Auditee Comments   Casa de Vallejo generally agreed with the finding and made
                   the following comments.

                      ·   Casa de Vallejo has requested an increase, from
                          HUD, in the amount it may charge its tenants for
                          food and maid service in order to create a self-
                          sufficient program.

                      ·   Casa de Vallejo requested further information on the
                          loans, personal expenses, and assets distributed so it
                          can create an appropriate reimbursement schedule.

                      ·   Donations and contributions are not project expenses
                          and the practice has been discontinued. However,
                          Casa de Vallejo believes its donations to the Vallejo
                          Chamber of Commerce are a combination of business
                          promotion and advertising for the facility.

                      ·   Funds borrowed from the tenants’ security deposit
                          account will be returned and will not be used in the
                          future for anything other than as identified in the
                          HUD Handbook and California law.

                      ·   In the future, Casa de Vallejo will abide by the terms
                          of the Regulatory Agreement and will seek HUD
                          guidance and approval as necessary.

                      ·   Repayment of unsecured loans will not occur in the
                          future without HUD approval. Part of the loan to the
                          attorney was repaid to the project and part of the
                          money is being held as a retainer fee for legal
                          expenses incurred by the sale of the project.

                      ·   In the future, project assets will be reviewed for value
                          prior to disposition.

                      ·   Casa de Vallejo is reviewing its process of
                          calculating the monthly management fee so
                          appropriate fees will be charged in the future.

                      ·   Project funds will no longer be used to pay expenses
                          of projects not related to Casa de Vallejo.



2002 SF 1001           Page 16
                                                                        Finding 1


                       ·   In order that all future expenditures are supported by
                           complete and accurate documentation prior to
                           distribution of funds, new bookkeeping staff is in
                           place and is being trained.

                       ·   Casa de Vallejo has recently received a Mark-to-
                           Market rent increase and believes this will help
                           improve the project’s financial situation. A business
                           reorganization of the facility and management at the
                           same time will create an environment in which the
                           violations of the various rules and regulations cannot
                           continue.


OIG Evaluation of   We reviewed Casa de Vallejo’s response and its supporting
                    exhibit and have made modifications to the report where
Auditee Comments
                    appropriate. However, these changes did not significantly
                    change our conclusions or recommendations.

                    In its response to the draft report, Casa de Vallejo identified
                    the changes it intends to make to ensure the reported
                    violations do not continue to occur in the future. However,
                    Casa de Vallejo management believes its contributions to the
                    Vallejo Chamber of Commerce are a combination of
                    business promotion and advertising for the facility.
                    Furthermore, with the invoice billing for the contribution, the
                    Chamber of Commerce describes some of its activities in
                    political terms (i.e. “The Chamber is continuing to tackle
                    some key issues in economic development, governmental
                    policy, education and added member benefits”). These
                    activities indicate at least some of the dues go for lobbying
                    costs.     The invoice, stating this is a “Membership
                    Investment” indicates this is club dues, not a bona fide
                    advertising expense. We believe if Casa de Vallejo needs to
                    advertise, it could find a better, less expensive medium than
                    the Vallejo Chamber of Commerce.

                    Casa de Vallejo also states $5,000 of the $20,587 loaned to
                    the attorney is being held as a retainer toward legal fees
                    expected to be incurred by the sale of Casa de Vallejo.
                    However, expenses incurred by the sale of the property are
                    mortgagor expenses and should be paid by the property
                    owner, not with project funds.



                        Page 17                                       2002 SF 1001
Finding 1




Recommendations   We recommend the Director of the San Francisco
                  Multifamily Hub:

                  1A.      Direct Casa de Vallejo Associates to comply with
                           24 CFR 278.20, 881.601(e)(1), and 881.608(b),
                           paragraph 8 of the Regulatory Agreement, the HAP
                           contract, and the MOA.

                  1B.      Direct Casa de Vallejo to stop subsidizing its food
                           and maid service with its rental income and tenants’
                           security deposits. Also, consider approving an
                           increase in food and maid service fees the project is
                           allowed to charge tenants.

                  1C.      Direct the project owner to stop using project funds
                           for non-project expenses. Also, require the owner to
                           reimburse Casa de Vallejo $86,932 for ineligible
                           expenses paid with project funds less the $13,930
                           already reimbursed to the project (see Appendix A)
                           as a result of our audit.

                  1D.      Require the project owner to either reimburse Casa
                           de Vallejo $8,263 for unsupported expenses paid
                           with project funds or provide support showing funds
                           were used for eligible project expenses.

                  1E.      Refer Casa de Vallejo for legal remedy for
                           violations of the Regulatory Agreement and the
                           MOA if the owner does not immediately repay the
                           project or continues to borrow from project funds and
                           distribute assets when the project is in a non-surplus
                           cash position.

                  1F.      Direct Casa de Vallejo to maintain the required
                           balance in its tenants’ security deposit account at all
                           times. Although the tenants’ security deposit account
                           was deficient by $23,884 as of July 2001, this amount
                           may have changed since that time. Therefore, the
                           director should determine the amount by which the
                           account is currently deficient and require the project




2002 SF 1001            Page 18
                                          Finding 1


   to reimburse that amount to the tenants’ security
   deposit account.




Page 19                                 2002 SF 1001
Finding 1




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2002 SF 1001   Page 20
                                                                                        Finding 2




      The Monthly Report For Establishing Net
       Income Was Not Properly Completed
As a result of unauthorized distributions made in 1996, HUD and the managing general
partner of Casa de Vallejo Associates entered into a Memorandum of Agreement in
February 1998. HUD now requires Casa de Vallejo to provide a Monthly Report for
Establishing Net Income each month so HUD can monitor the project and be assured the
management agent is not making further unauthorized distributions. However, the
management agent did not properly complete the required report. Specifically, we noted the
following types of errors: (1) all income and disbursements were not reflected on the report,
(2) some checks listed on the report as void cleared the bank, (3) the calculation of rent lost on
vacant units was not properly calculated, and (4) the tenant security deposits funded in a
separate account was not accurately reported. Thus, HUD cannot rely on the monthly
accounting reports to monitor compliance with Federal regulations, HUD Handbook
requirements, and the terms of the MOA or to evaluate project performance.


                                     A Memorandum of Agreement between the Chief of
 All Income And                      HUD’s San Francisco Asset Management Branch and the
 Disbursements Were Not              managing general partner of Casa de Vallejo Associates
 Reflected On The Report             states the Monthly Report For Establishing Net Income
                                     (report) must be submitted to HUD by Casa de Vallejo
                                     beginning in January 1998. HUD Handbook 4370.1 REV-2
                                     provides forms and instructions for completing the monthly
                                     accounting reports. Those instructions state in part,
                                     “…advances provided to meet operating expenses…”
                                     should be included on line 2.d. of the report, and
                                     “…distributions paid or repayment of advances from
                                     project cash…” must be included on line 3d. Schedule B,
                                     Schedule of Disbursements is included with the form and
                                     states, “All disbursements from project cash must be
                                     shown.”

                                     Contrary to the criteria stated above, the management agent
                                     did not properly complete the required form HUD-93479
                                     Monthly Report for Establishing Net Income. We reviewed
                                     the monthly reports for January 2000 through April 2001
                                     and noted errors on each. The management agent did not
                                     always properly include all income and all disursements on
                                     the November 2000, February 2001, and March 2001
                                     reports.


                                         Page 21                                      2002 SF 1001
Finding 2


                         Specifically, report line 2.d, Amounts Received During the
                         Month – Other, should include any income other than rent
                         and subsidy. The November 2000 report included garage
                         rents and vending income on line 2.d. This line should
                         have also included the $40,000 Casa de Vallejo received as
                         an unsecured loan from Clayton Ranch Investors. The
                         March 2001 report, likewise, should have included on this
                         line the $3,000 Casa de Vallejo received from the
                         management agent for the purchase of the project’s dump
                         truck.

                         Report line 3.d, Disbursements Made During the Month –
                         Other, should include disbursements other than for routine
                         operations and flexible subsidy/Management Improvement
                         and Operating plan items. Thus, the February 2001 report
                         should have included the $40,000 repaid from project funds
                         to Clayton Ranch Investors.

                         Some checks listed on the Schedule of Disbursements were
 Some Checks Listed As
                         listed as void, but later cleared the bank. The December
 Void Cleared The Bank
                         2000 report included 146 checks listed as void. As a result,
                         we reviewed the bank statements for December 2000
                         through May 2001 and compared the cleared checks listed
                         to the Monthly Report for Establishing Net Income for
                         December 2000 through April 2001 to determine if any
                         checks listed on the report as void cleared the bank.

                         Of the 146 checks listed as void on the December 2000
                         report, six later cleared the bank in an aggregate amount of
                         $46,077. Five of these checks, worth a total of $46,072,
                         were listed on the January 2001 report with payee name and
                         amount as valid checks. Eight checks listed on the
                         December 2000 report with payee name and amount as
                         valid checks with an aggregate value of $9,395, were listed
                         on the January 2001 report as void. Each of these checks
                         later cleared the bank.

                         Further, check number 8886, written on February 26, 2001
                         to repay the unsecured loan to Clayton Ranch Investors in
                         the amount of $40,000 (see previous section of report
                         above), was listed as void on Casa de Vallejo’s February
                         2001 monthly report. However, this check cleared the bank
                         on the same day it was written.




2002 SF 1001                 Page 22
                                                                             Finding 2


                           The Monthly Report for Establishing Net Income indicates
Rent Loss On Vacant
                           the amount to be reported on line 6, Rent Loss on Vacant
Units Was Not Properly
                           Units, should be the actual rent lost. However, the
Calculated
                           management agent did not properly calculate this amount
                           on any of the monthly reports we reviewed. Instead, it
                           calculated total potential residential rent and subtracted
                           total residential income received (from tenants and
                           subsidies) to arrive at total vacancies. This method does
                           not consider those tenants who miss a payment, who pay
                           their rent late, or who are making payments on a
                           promissory agreement. Thus, the dollar amount for
                           vacancies shown on the report may include a portion of
                           tenant accounts receivable.

                           Line 10.b of the report requires the management agent to
Security Deposits Funded
                           report the amount of tenants’ security deposits funded in a
In A Separate Account
                           separate account. Rather than stating the actual amount in
Was Not Properly
                           the account as of the report date, the management agent
Reported
                           reported the amount it determined should be in the account
                           on each report we reviewed.

                           The principal reasons for the problems noted include:
There Were Various
Reasons For The Problems
Noted                      ·   The Monthly Report for Establishing Net Income
                               includes specific instructions on what income and
                               disbursements to report. The wording on the form itself
                               also indicates what amounts should be reported.
                               However, the management agent did not follow the
                               instructions.

                           ·   Mistakes were made by the assistant bookkeeper. The
                               property manager said the assistant bookkeeper made
                               mistakes transferring information from the checkbook
                               register to the monthly accounting report. The assistant
                               bookkeeper is no longer an employee of the project.

                           ·   The management agent disregarded Federal regulations
                               when it used tenants’ security deposits to subsidize
                               Casa de Vallejo’s operations.




                               Page 23                                     2002 SF 1001
Finding 2


                          The purpose of the report is to allow HUD to monitor
 The Purpose Of The
                          compliance and evaluate project performance. Among
 Report Is To Allow HUD
                          other areas, the monitor should pay particular attention to
 To Monitor The Project
                          income, collections, and disbursements. However, as result
                          of the problems noted, HUD was unaware of the following.

                          ·   The project borrowed $40,000 and used half of it to
                              fund its tenants’ security deposit account.

                          ·   The management agent sold a project vehicle in
                              December 2000 without the required written HUD
                              approval.

                          ·   Checks on the reports in the amount of $55,467 were
                              not properly listed. Each of these checks was listed on
                              one report with check number, payee, and amount paid
                              and on another report as void.

                          ·   The actual dollar amount of Rent Loss on Vacancies
                              was improperly reported.    The rent loss amount
                              reported did not consider missed payments, late
                              payments, or payments made on a promissory
                              agreement.

                          ·   Although the project was in a non cash-surplus position
                              at the end of its FY 2000, the management agent used
                              project funds to pay back the $40,000 unsecured loan in
                              February 2001.

                          ·   The tenants’ security deposit account was habitually
                              under funded and as of July 31, 2001, was deficient by
                              $23,884.

                          Since HUD was unaware of these problems, it could not
                          properly monitor the project’s compliance with laws and
                          regulations nor evaluate its performance.




Auditee Comments          Casa de Vallejo agreed with our finding and is trying to
                          correct the violations by implementing standard in-house
                          guidelines for processing this form. It is also coordinating
                          with the HUD program staff to determine if using reports



2002 SF 1001                  Page 24
                                                                        Finding 2


                    directly from its accounting software will provide adequate
                    and accurate information.




OIG Evaluation of   We agree with Casa de Vallejo’s proposed actions, but HUD
                    program staff should resolve the recommendations.
Auditee Comments




Recommendations     We recommend the Director of the San Francisco
                    Multifamily Hub:

                    2A.      Require Casa de Vallejo to include all project
                             income, regardless of source, on its Monthly Report
                             for Establishing Net Income.

                    2B.      Require Casa de Vallejo to report all disbursements
                             from project funds and accurately list all checks on
                             the reports.

                    2C.      Ensure Casa de Vallejo correctly computes and
                             reports the project’s Rent Loss on Vacancies.

                    2D.      Require Casa de Vallejo to report the project’s
                             actual amount funded in its tenants’ security deposit
                             account.

                    2E.      Reiterate to Casa de Vallejo it must receive written
                             HUD approval to dispose of project property.

                    2F.      Monitor the project’s Monthly Report for
                             Establishing Net Income and the Schedule of
                             Disbursements more closely and require supporting
                             documents including, but not necessarily limited to,
                             the following.
                             · General ledger accounts for each month for bank
                                 activity, income, disbursements, and security
                                 deposits.
                             · Copies of the front and back of all void checks
                                 each month.



                          Page 25                                     2002 SF 1001
Finding 2


                        ·      A breakdown of the Rent Loss on Vacant Units
                               to include only the amount lost on individual
                               vacant units.
                        ·      Supporting     documentation      for     specific
                               disbursements not detailed enough on the
                               monthly report to determine allowability.

               2G.      Consider suspending Housing Assistance Payments
                        until such time as the project manager/owner
                        complies with the requirements if the project
                        manager/owner continues to disregard these
                        requirements.




2002 SF 1001         Page 26
Management Controls
In planning and performing our audit, we considered the management controls used by H&B
Developers in Casa de Vallejo operations to determine our auditing procedures, not to provide
assurance on the controls. Management controls include the processes effected by an entity’s
management and other personnel, designed to provide reasonable assurance for achieving
objectives for program operations, validity, and reliability of data, compliance with applicable laws
and regulations, and safeguarding resources.



                                      We determined the following management controls were
 Relevant Management
                                      relevant to our audit objectives:
 Controls
                                      ·   Maintenance Controls
                                      ·   Cash Controls
                                      ·   Subsidy Controls

                                      We obtained an understanding of the control structure for
                                      the above systems and determined the risk exposure to
                                      design audit procedures. We concluded the audit would be
                                      performed more efficiently by doing substantive tests
                                      without reliance on management controls. Therefore, we
                                      did not necessarily make a complete assessment of control
                                      design or determine whether all policies and procedures had
                                      been placed in operation.




                                           Page 27                                      2002 SF 1001
Management Controls




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2002 SF 1001          Page 28
Follow Up On Prior Audits
This is the first Office of Inspector General’s (OIG) audit of Casa de Vallejo’s Section 8 rental
assistance program and HUD’s insurance program.




                                          Page 29                                       2002 SF 1001
Follow Up On Prior Audits




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2002 SF 1001                Page 30
                                                                                    Appendix A

Schedule of Questioned Costs
                                                      Type of Questioned Costs
                Issue                     Ineligible 1/  Unsupported 2/ Reimbursed
                                                                          During Audit 3/
Loans                                         $ 60,587                         $ 10,000
Personal Expenses                                11,346                            2,438
Donations                                         6,643
Disposition of Project Assets                     5,280
Excessive Management Fees                         1,582
Projects Not Related to Casa de Vallejo           1,492                            1,492
Payments to Project Vendors                                    $ 4,245
Payments to American Express                                        2,753
Payments to Project Employees                                       1,265
Tenants’ Security Deposit Account                23,884
                                 Total        $ 110,814        $    8,263      $  13,930

1/     Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
       that the auditor believes are not allowable by law, contract, or Federal, State, or local
       policies or regulations.

2/     Unsupported costs are costs charged to a HUD-financed or HUD-insured program or
       activity and eligibility cannot be determined at the time of audit. The costs are not
       supported by adequate documentation or there is a need for a legal or administrative
       determination on the eligibility of the costs. Unsupported costs require a future decision
       by HUD program officials. This decision, in addition to obtaining supporting
       documentation, might involve a legal interpretation or clarification of Departmental
       policies and procedures.

3/     We verified Casa de Vallejo’s management agent reimbursed the project $13,930 as a
       result of our audit.




                                          Page 31                                    2002 SF 1001
Appendix A




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2002 SF 1001    Page 32
                             Appendix B

Auditee Comments




                   Page 33   2002 SF 1001
Appendix B




2002 SF 1001   Page 34
          Appendix B




Page 35   2002 SF 1001
Appendix B




2002 SF 1001   Page 36
          Appendix B




Page 37   2002 SF 1001
Appendix B




2002 SF 1001   Page 38
          Appendix B




Page 39   2002 SF 1001
Appendix B




2002 SF 1001   Page 40
                                                                              Appendix C

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, Hart Senate Office Building, United
   States, Senate, Washington, DC 20510
Chairman, Committee on Government Reform, 2185 Rayburn Building, House of
   Representatives, Washington, DC 20510
Ranking Member, Committee on Government Reform, 2204 Rayburn Building, House of
   Representatives, Washington, DC 20510
Subcommittee on Oversight 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, Subcommitte on Criminal Justice, Drug Policy & Human
   Resources, B373 Rayburn 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
Casa de Vallejo, 1825 Sonoma Boulevard, Vallejo, California 94590




                                      Page 41                                  2002 SF 1001