oversight

                                                      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




May 4, 2004                                                                       Memorandum No:
                                                                                  2004-AT-1804

TO:            Karen Cato-Turner, Director, Office of Public Housing, 4DPH




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

SUBJECT:       Audit Survey of Miami Dade Housing Agency
               Miami-Dade County, Florida


                                       INTRODUCTION

We completed an audit survey of the Miami Dade Housing Agency’s (Agency) 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. Our objective was to determine whether the Agency
diverted or pledged resources subject to an Annual Contributions Contract (ACC) 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 Contribution Contracts, and other requirements. We also interviewed HUD and Agency
staff, and reviewed various documents including financial statements, general ledgers, and
minutes from the Board of Miami-Dade County, Florida (County) Commissioner meetings. In
addition, we obtained an understanding of the Agency’s accounting system as it related to our
audit objective.

The review generally covered the period from October 1, 1998, to September 30, 2003. We
performed our fieldwork at the Agency’s financial office located at 2103 Coral Way, Miami,
Florida 33145. The review was performed during the period February to March 2004. We
conducted our review in accordance with generally accepted government auditing standards.

                                       BACKGROUND

The County is a chartered political subdivision of the State of Florida and is authorized with the
power of self-government by the Constitution of the State of Florida and Florida Statutes. The
County established the Housing and Urban Development Department in 1967 and Department of
Special Housing Programs in 1988. Effective May 1996, the two departments were merged to
form the Agency. Since the Agency is a County department, the Board of County
Commissioners is also the legislative and governing body of the Agency.

The Agency manages and operates over 11,000 public housing units and approximately 16,000
private rental-housing units. The Agency also owns nine Section 8 New Construction and five
mixed-income properties.

The Board of County Commissioners approved in 2000 the formation of the Miami Dade
Housing Agency Development Corporation (MDHADC) to develop residential and commercial
properties and to further the mission, purpose, and goals of the Agency. MDHADC maintains its
own financial records and a separate Board.

During our audit period, the Agency implemented three housing development activities that
involved both the Agency and MDHADC.

       In 1999, HUD awarded the Agency a $4.7 million HOPE VI grant to construct the Ward
       Towers Assisted Living Facility, a five-story, 100-unit assisted living facility that is
       connected to the existing Ward Towers elderly public housing development.
       Construction began in October 2002 and will be completed during 2004. The facility is
       expected to cost $15.5 million and will be financed by the $4.7 million HOPE VI grant,
       $833,200 Capital Grant funds, and other non-Federal funds. HUD approved the use of
       the HOPE VI and Capital Grant funds.

       In August 2003, HUD approved the disposition and proposed sale of Townhouse Villas
       to MDHADC who will redevelop the site. As of February 2004, MDHADC was
       awaiting the transfer of the property. Planned funding for redevelopment will come
       from County surtax dollars. No HUD funds will be used.

       In October 2003, HUD approved the disposition and proposed lease of a land parcel at
       George A. Smathers Plaza to MDHADC who will develop and operate an assisted living
       facility. Planned funding for development will come from County surtax dollars and
       conventional loan or bond financing. No HUD funds will be used.

                                  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 Agency diverted or pledged resources subject
to an Annual Contribution Contract or other agreement or regulation to the benefit of other
entities without specific HUD approval. We did not identify any deficiencies. Accordingly, we
will not expand the survey into the audit phase.

Should you or your staff have any questions, please contact me at (404) 331-3369, or Barry
Shulman, Senior Auditor, at (305) 536-5387.




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