oversight

Jacksonville Housing Authority Jacksonville, Florida

Published by the Department of Housing and Urban Development, Office of Inspector General on 2004-03-09.

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

                                                     U.S. Department of Housing and Urban Development
                                                     Office of the Inspector General for Audit, Region 4
                                                     Richard B. Russell Federal Building
                                                     75 Spring Street, SW, Room 330
                                                     Atlanta, GA 30303-3388
                                                     (404) 331-3369




                                                   Memorandum No.
March 9, 2004                                      2004-AT-1803


MEMORANDUM FOR:             John Niesz, Director, Office of Public Housing, 4HPH



FROM:           James D. McKay
                Regional Inspector General for Audit, 4AGA

SUBJECT:        Jacksonville Housing Authority
                Jacksonville, Florida


                                      INTRODUCTION

We completed a review of the Jacksonville Housing Authority’s (Authority) administration of its
housing development activities. We performed the review as part of an audit of the Department
of Housing and Urban Development’s (HUD) oversight of Public Housing Agency activities
with related nonprofit entities. The primary objective of our review was to determine whether
the Authority diverted or pledged resources subject to an Annual Contributions Contract or other
agreement or regulation to the benefit of other entities without specific HUD approval.

                              METHODOLOGY AND SCOPE

To accomplish our objective, we reviewed applicable HUD requirements and regulations, the
Annual Contributions Contract, and other requirements. We also interviewed HUD and
Authority staff, and reviewed various documents including financial statements, general ledgers,
and minutes from Board of Commissioner meetings. In addition, we obtained an understanding
of the Authority’s accounting system as it related to our review objective.

The review generally covered the period from October 1, 1998 to September 30, 2003.
However, we reviewed activity in other periods as necessary. We performed our fieldwork at the
Authority’s administrative offices located at 1300 Broad Street, Jacksonville, Florida. We
conducted our review in accordance with generally accepted government auditing standards.
The review was performed during the period from October to December 2003.
                                      BACKGROUND

The Authority was organized by the City of Jacksonville in 1995, pursuant to a local ordinance
enacted in 1994. Between 1970 and 1995, the City Council functioned as the public housing
authority for the City. The Authority’s purpose is to provide low rent housing for qualified
individuals in accordance with the rules and regulations prescribed by HUD and other Federal
Agencies.

The Authority is governed by a Board of Commissioners, which is composed of seven members.
The Mayor of the City of Jacksonville, with approval of the City Council, appoints the
Commissioners and the Authority’s Executive Director. During our review, the Executive
Director was Ronnie Ferguson.

The Authority owns and manages 21 conventional low-income housing projects with a total of
2,865 units. It also administers 6,718 Section 8 vouchers and owns two affordable housing
properties - Gregory West and Riviera Apartments. During our audit period, the Authority
implemented three development activities.

In 1999, the Authority completed construction of the Oaks at Durkeeville redevelopment project
with the help of a $21,552,000 HOPE VI grant. The development included 200 public housing
rental units, 28 single family homes, a senior living center, commercial and retail space, a day
care center, and a community center.

In October 2000, the Authority and City executed a voluntary Consent Decree with the
U.S. Department of Justice to provide 225 public housing units in non-minority impact areas of
the city. In April 2001, the Authority entered into an agreement with Vestcor Fund XVI, Ltd., a
Florida Limited Partnership, to develop and operate a mixed income community known as
Lindsey Terrace Apartments, under HUD’s Mixed Finance Program. The Authority provided a
long-term loan of $1.5 million, funded from non-Federal general surplus funds of the City. In
turn, the owner designated 84 of the 336 units as public housing and is eligible to receive the
benefit of operating subsidies provided to the Authority from HUD.

In September 2003, the Authority also purchased Colonial Village for $4,090,500 to help satisfy
the Consent Decree. The Authority plans to use $4,124,270 in HUD development grant, HOPE
VI, and capital grant funds and $1,164,919 of Authority funds to purchase and rehabilitate the
property. The Authority intends to convert the 100-unit development to public housing.




                                               2
                                  RESULTS OF REVIEW

We reviewed the three housing development activities to determine the extent of involvement by
nonprofit or other related entities and whether the Authority diverted or pledged resources
subject to an Annual Contributions Contract or other agreement or regulation to the benefit of
other entities without specific HUD approval. We did not identify any deficiencies.
Accordingly, this report does not contain any reportable conditions or recommendations for
corrective action.

Should you or your staff have any questions, please contact me at (404) 331-3369 or
Antonio Bailey, Senior Auditor at (904) 232-1226.




                                              3