Issue Date November 2, 2006 Audit Report Number 2007-NY-1001 TO: Joan Spilman, Director, Office of Public Housing, 2CPH FROM: Edgar Moore, Regional Inspector General for Audit, 2AGA SUBJECT: Utica Municipal Housing Authority, Utica, New York, Needs to Make Improvements in Administering Its HOPE VI Revitalization Program HIGHLIGHTS What We Audited and Why We audited the Utica Municipal Housing Authority (Authority) regarding its administration of its HOPE VI grant program because of issues identified during our initial audit of the Authority’s general operations. We wanted to determine whether the Authority (1) administered its HOPE VI grant program and activities effectively, efficiently, and economically in accordance with grant agreements and applicable rules and regulations; (2) complied with applicable procurement requirements; (3) implemented sufficient disbursement controls over administrative costs charged to the program; and (4) had a cost allocation plan to adequately account for and distribute costs to the program. What We Found The Authority’s HOPE VI program is not achieving vital revitalization objectives in a timely manner or in accordance with program goals and requirements as specified in its application, revitalization plan, and grant agreement. For three professional services contracts associated with the HOPE VI program, 1) excessive fees were paid for application services, 2) a consulting contract was improperly modified, and 3) administration of a financial consulting contract was inadequate. Questionable administrative costs were also charged to the program. In addition, the Authority periodically allocated certain costs such as wages and fringe benefits but neglected to allocate other indirect costs, and its allocation plan for wages and fringe benefits was not adequately supported or detailed. What We Recommend We recommend that the U.S. Department of Housing and Urban Development (HUD) director, Buffalo Office of Public Housing, instruct the Authority to implement procedures that will ensure that all collateral investments and in-kind services for the Hope VI project are documented and quantified. Reevaluate the scope of its revitalization plan and amend the plan accordingly so that HUD can reassess whether the Authority is able to meet its primary objective of revitalizing the project neighborhood known as Cornhill. Based on this reassessment, HUD should determine whether the amended plan is effective enough to ensure that the remaining $7.47 million will be put to better use, or if the Authority can only achieve certain objectives, HUD should consider reducing the remaining amount of grant funds proportionately. We also recommend that HUD require the Authority to establish controls to ensure compliance with all applicable federal, state, and local procurement policies and regulations. Further, the Authority should be required to submit supporting documentation to justify all unsupported costs, so that HUD can make an eligibility determination, and reimburse the program from nonfederal funds all amounts determined to be ineligible. In addition, we recommend that the Authority develop and implement a cost allocation plan or establish an indirect cost rate proposal to ensure that all costs are properly allocated to the benefitting sources. For each recommendation without a management decision, please respond and provide status reports in accordance with HUD Handbook 2000.06, REV-3. Please furnish us copies of any correspondence or directives issued because of the audit. Auditee’s Response We discussed the results of our review during the audit and at an exit conference held on September 7, 2006. Authority officials did not agree with our findings and provided their written comments during the exit conference. The Authority’s comments included alternative recommendations, which we have reviewed and taken into consideration. Based on this review, we revised our recommendations that pertain to finding one. Also, the Authority’s comments included numerous appendixes that were too voluminous to include in this report, but will be provided to your office. The complete text of the auditee’s response, along with our evaluation of that response, can be found in appendix B of this report. 2 TABLE OF CONTENTS Background and Objectives 4 Results of Audit Finding 1: The Authority’s HOPE VI Program Was Not Achieving Vital 5 Revitalization Objectives Finding 2: The Authority’s Controls over HOPE VI Contract Administration 14 Were Inadequate Finding 3: Questionable Administrative Costs Were Charged to the HOPE VI 19 Program Finding 4: The Authority Lacked an Acceptable Plan for Allocating Costs to Its 24 HOPE VI Program Scope and Methodology 27 Internal Controls 28 Followup on Prior Audits 30 Appendixes A. Schedule of Questioned Costs and Funds to Be Put to Better Use 31 B. Auditee Comments and OIG’s Evaluation 32 C. Questionable Administrative Costs Charged to the HOPE VI Program 69 3 BACKGROUND AND OBJECTIVES The Utica Municipal Housing Authority (Authority) was organized pursuant to the Housing Act of 1937 and the laws of the State of New York. Its primary objective is to provide low-income housing to the citizens of Utica, New York, and surrounding areas in compliance with its annual contributions contract (contract) with the U.S. Department of Housing and Urban Development (HUD). The Authority is governed by a board of commissioners (board) composed of seven members, five appointed by the mayor and two elected by the tenants. The executive director is hired by the board and is responsible for the day-to-day operations of the Authority. HUD awarded the Authority an $11.5 million HOPE VI grant effective July 3, 2003. The grant funds are earmarked for developing replacement units for relocated public housing residents and new housing unit rentals and providing an opportunity for homeownership and renovated housing in Utica’s most severely distressed neighborhood known as Cornhill. In addition, the Authority owns and manages eight federally funded developments with 932 low-rent units. It also administers Section 8 programs consisting of 515 units at seven Section 8, 11B, developments and 174 housing choice voucher units. To administer the HOPE VI grant and related activities, the Authority created the not-for-profit corporation, Rebuild Mohawk Valley, Inc. (Rebuild Mohawk), on January 8, 2003. On July 11, 2003, the Internal Revenue Service designated Rebuild Mohawk as exempt from federal income tax under section 501(a) of the Internal Revenue Code as a nonprofit organization described in section 501(c)(3). Rebuild Mohawk is governed by a board of directors, composed of nine voting members and five ex-officio members. The HOPE VI coordinator is responsible for implementing policies and administering Rebuild Mohawk. Since the Authority was awarded the HOPE VI grant, it maintains responsibility for the grant as grantee; therefore, Rebuild Mohawk and the Authority are referred to interchangeably throughout this report. We selected the Authority for audit based on issues identified during our review of the Authority’s general operations, audit report number 2006-NY-1005, issued on February 21, 2006. The objectives of our audit were to determine whether the Authority (1) administered its HOPE VI grant program and activities effectively, efficiently, and economically in accordance with grant agreements and applicable rules and regulations; (2) complied with applicable procurement requirements; (3) implemented sufficient disbursement controls over administrative costs charged to the program; and (4) had a cost allocation plan to adequately account for and distribute costs to the program. 4 RESULTS OF AUDIT Finding 1: The Authority’s HOPE VI Program Was Not Achieving Vital Revitalization Objectives Contrary to its HUD-approved grant application, the Authority was not accomplishing its HOPE VI program objectives and did not show adequate progress toward completing key planned activities. Specifically, 1) overall progress was lacking and activities were not tracked; 2) partnership with the City of Utica (City) lacked progress and cooperation; 3) there had been limited activity or progress on Cornhill Commons, which is integral to the HOPE VI program as the central hub of the neighborhood revitalization project; 4) planned housing goals will not be attained, and target area code enforcement was inadequate to achieve revitalization objectives; and 5) the relocated tenants of the Washington Court development have not benefited as intended in the HOPE VI application. These deficiencies can be attributed to Authority’s inadequate management of the HOPE VI program and its inability to handle a large redevelopment project. As a result, the HOPE VI program has not benefited the Cornhill neighborhood target area and residents as proposed in the application, plan, and grant agreement. Thus, the Authority has a limited chance of success in completing vital HOPE VI activities and achieving revitalization goals. HOPE VI Program Objectives In December 2002, the Authority applied for a HOPE VI grant in accordance with the notice of funding availability for the fiscal year 2002 HOPE VI program, published in the Federal Register, Volume 67, No. 147. In March 2003, HUD officially notified the Authority that its HOPE VI grant application had been approved. The grant agreement was executed in July 2003 and incorporates the notice and grant application. The total approved HOPE VI program budget to be expended was more than $82 million, of which $11.5 million was HUD funding, thus leveraging was an important component. The Authority received the maximum number of points for leveraged funds in its application rating due to the amount of leveraged funds that were to be provided in addition to the HOPE VI grant. In accordance with program requirements, all of the HOPE VI activities are to be completed and funds expended by September 30, 2008. The Authority’s approved application proposed to revitalize a community area known as the Cornhill section of Utica, which was experiencing the greatest distress and drain on local resources. With pledged support from City, county, school, and other agency leaders, the Authority planned to (1) offer the 70 families remaining at its Washington Courts Development the opportunity to move to new replacement housing in Cornhill; (2) demolish the Washington Courts Development and sell the site to the City for use as an economic 5 development site, creating job opportunities for residents of Washington Courts; and (3) transform Cornhill into a mixed-income neighborhood with new community assets and services. However, numerous revitalization investments critical to the success of the HOPE VI program have shown little progress, with available records indicating that only $802,000 of the $27 million in collateral investments had been expended as of March 31, 2006. Progress Lacking and Activities Not Tracked The Authority was not carrying out its HOPE VI revitalization program in a timely manner and in accordance with program requirements as proposed in its application, plan, and grant agreement. Due to a lack of adequate recordkeeping by the Authority, it is difficult to determine the exact amount expended and the overall progress for all HOPE VI activities. The total HOPE VI program budget of $82.3 million has to be expended by September 30, 2008; however, only $22.6 million had been expended as of March 31, 2006. Based upon information provided by the Authority and the HOPE VI program quarterly progress report, the expenditures as of March 31, 2006, were as follows: Source Budget Expended HOPE VI award $11,501,039 $ 4,034,362 Other federal funds 5,620,876 2,325,584 Nonfederal funds 38,208,159 15,455,661 Subtotal 55,330,074 21,815,607 Collateral investments 27,039,088 801,936 Total HOPE VI $82,369,162 $22,617,543 As detailed above, only 27 percent of the overall budget had been expended as of March 31, 2006. Further, only 3 percent of funds for the important collateral investments had been expended. The table below reflects activity on collateral investments as of March 31, 2006. Activity Budget Expended New school $16,000,000 $ -0- Rescue mission 2,800,000 -0- Cosmopolitan center 2,500,000 -0- City of Utica: Policing 400,000 111,600 Code enforcement 863,000 20,073 6 Economic development 500,000 -0- Cornhill match 500,000 -0- Residential rehabilitation 500,000 174,445 Lead paint program 500,000 375,000 In-kind staff 1,092,000 120,818 County of Oneida: Health department 270,000 -0- Residential rehabilitation 1,024,088 -0- Habitat for Humanity 90,000 -0- Total collateral investments $27,039,088 $ 801,936 The Authority’s tracking system is incomplete and unsupported since it did not track the $27 million of collateral activities. The Authority could not provide any expenditure reports regarding the $27 million in collateral investments. The Authority had to request information from the City and other partners in an attempt to provide us with basic information; however, the responses we received were inadequate. Since the Authority did not maintain records on the $27 million in collateral funding, there is no assurance as to the accuracy of the expenditures. In addition to the lack of progress on collateral investments, the March 2006 quarterly report submitted to HUD shows that $13.5 million of the nonfederal funds is planned for community services; however, only $3.9 million has been expended. This represents only 29 percent of the total. Moreover, numerous partners who pledged support have not provided any funding as of this date. As a result, many of the leveraged activities, which are an integral part of the HOPE VI program, have not progressed satisfactorily. HUD Monitoring Review Cited Concerns HUD recognized the lack of progress and focus by the Authority in a May 2004 monitoring review. The monitoring report states that the Authority had not focused on accomplishing any one thing, was trying to accomplish everything at the same time, and did not have the necessary experience to do so. The monitoring review report further stated that the Authority needed to focus its energies on progress, which has been slow as evidenced by the Authority not meeting projected start dates and the actions not being completed. HUD recommended that a quarterly source of funds report be developed for each of the four categories of financial commitments (physical development resources, community services resources, collateral investments, and anticipatory investments). Similar to the community services resources report now in place, we suggest that each report individually list the amounts comprising the total commitment as well as the year-to-date proceeds and/or services received. When completed, these reports should reconcile with the quarterly report. 7 Lack of Progress and Cooperation in Partnership with City The HUD 2004 monitoring review further cited a lack of cooperation between the Authority and the City, a main HOPE VI program partner. The City pledged significant funds and activities for the HOPE VI project; however, the Authority has not obtained progress reports from the City. Many of the City activities included not only collateral investments, but also infrastructure improvements for the development budget. Based on the records available at the Authority, we estimated that approximately $17 million would be provided by the City for HOPE VI activities. However, the Authority obtained City records that show more than $19 million in HOPE VI program planned items with only around $4 million expended and invested in the program area at March 2006. The Authority provided the documents to us without a detailed write-up or reconciliation. More importantly, as of March 31, 2006 key activities from the City that are critical to the success of the HOPE VI program have been slow to materialize. These include: • $1 million in community assets and services to develop the Cornhill neighborhood, including a new community school, recreational park, outdoor ice skating rink, and community plaza. • More than $800,000 promised by the City for systematic code enforcement activities, of which the City has provided only $20,000 for this activity. • More than $5.5 million in infrastructure improvements to be made in the HOPE VI program target area. The City is claiming only $343,000. During our site visit to the target area, we noticed very few street and/or sidewalk improvements. • More than $500,000 committed by the City for economic development, of which no activity has been completed. • $245,000 committed for facade improvements. So far, only six businesses have been assisted for a total investment of only $30,000. The Authority did not maintain records as to the level of expenditures. Since it is responsible for ensuring the success of its HOPE VI program as required by the grant agreement, it should track the impact that the activities are having in the 8 revitalization zone. Further, there was no overall assessment of the impact of collateral investments. Limited Activity or Progress on Cornhill Commons The Authority’s HOPE VI application states that one of the primary objectives of the HOPE VI program is to transform the Cornhill neighborhood once again into a mixed-income neighborhood with new community assets and services. The application provides that the City made a commitment of $1 million to develop a new recreational park in the middle of Cornhill. The park is to have a new community school, multipurpose fields, softball fields, playgrounds, an outdoor ice rink, and a community plaza. This will bring a much-needed recreational asset to this area of the City. The Cosmopolitan Center will construct a $2.5 million facility that will be part of the community school. The facility will host the administrative functions for its own organization, the Authority, the Cornhill Senior Center, and other neighborhood groups. There has been limited activity or progress on the vital components comprising Cornhill Commons. Available records indicate that more than $20 million was to be expended for the benefit of Cornhill Commons; however, as of April 2006, no funds had been invested. Authority officials also stated that the Authority still does not have site control over 12 houses within the seven-acre area needed for the Cornhill Commons project. In April 2006, we conducted a visual tour of the HOPE VI program target zone and confirmed that there had been limited activity in Cornhill Commons. Housing Goals Not Attained and Target Area Code Enforcement Inadequate The HOPE VI application was approved on the basis that the Authority would construct 74 new homeownership units and 120 new rental housing units for a total of 194 housing units. In addition, the application provided that 70 public housing units (consisting of 24 homeowner units and 46 rental units) would be developed with funds from this HOPE VI program grant. The application section also provided that 24 of the 74 homeowner units will be available as lease to purchase public housing agency-owned units and 44 rental units would be available as homeowner units after 15 years of rental. However, based upon information available as of March 31, 2006, the housing goals will not be met. The basis for this conclusion is as follows: 9 • The 24 lease to purchase public housing agency-owned units have been eliminated from the program. The Authority is now planning on only 54 homeowner units, down from the 74 planned. Of these 54 homeowner units, 23 units are targeted for 2007 and 2008. • Only 11 of the originally planned 74 homeowner units have been completed. • The total of 44 rental units (Rutger Manor) that were to be homeowner units after 15 years of rental has been reduced. The Authority now plans only 33 of these units. Code Enforcement Is Not Adequate The HOPE VI application provided that the replacement housing would be tied to “systematic code enforcement,” for which the City promised $863,000. However, documentation provided by the Authority shows that the City had provided only $20,000 for this activity as of March 31, 2006. In addition, the Authority noted many code violations in the HOPE VI target area and informed the City of such violations; however, little or no action has been taken by the City. In April 2006, we toured the HOPE VI target area and noticed many code violations of properties located next to the new HOPE VI program homes. The following photos illustrate code concerns in the HOPE VI target area. Street pavement and curb deterioration on Leah Street 10 Poorly maintained grounds of vacant boarded-up property Relocated Washington Court Tenants Not Benefiting as Intended A primary objective of the HOPE VI program was to give the tenants of Washington Courts the opportunity to relocate to HOPE VI housing in the Cornhill neighborhood area and hopefully become homeowners. According to the approved application, the HOPE VI project was designed to provide quality, affordable housing in combination with support services to empower the former residents of Washington Courts. The replacement housing is located in the Cornhill neighborhood of Utica with close proximity to shopping, banking, human service programs, and other facilities. However, the vast majority of the displaced tenants have been relocated to other public housing. Only seven of the relocated Washington Court tenants now reside in the Cornhill neighborhood, with only one family having purchased a HOPE VI home. Most of the relocated Washington Court tenants are currently not residing in the Cornhill neighborhood and are not homeowners. Washington Court Residents Have Not Benefited From Job Opportunities According to the HOPE VI application, another one of the primary objectives of the HOPE VI program was to demolish Washington Courts and sell the site to the City for use in economic development including providing job opportunities for relocated residents of Washington Court. However, we conducted a visual inspection of the Washington Court site in April 2006 and noted that the demolition work had only recently begun. Thus, the job opportunities, if any, for the relocated residents appear to be many years away. More importantly, the Authority was to provide job opportunities during construction of the HOPE VI 11 homes by giving priority to the relocated residents of Washington Court, residents of other public and assisted housing, and persons in the Cornhill neighborhood. The application provided that there were to be 1) aggressive procurement and contracting guidelines to ensure that HOPE VI program construction funds benefit the Authority’s residents; 2) use of in-house labor or the Authority’s residents to create hiring opportunities in the construction of the for-sale homes; and 3) proactive recruitment campaigns to attract private-sector partners, mainstream contractors, and minority business owners willing to agree to resident hiring goals. Despite these promises and assertions, the Authority has not hired the relocated Washington Court residents or any other public housing residents for the HOPE VI project. Conclusion The Authority was not carrying out its HOPE VI revitalization program in a timely manner and in accordance with program requirements as proposed in its application, plan, and grant agreement. Further, the HOPE VI program was not benefiting the Cornhill neighborhood target area residents as planned, and the Authority has a limited chance of success for completing vital HOPE VI activities and achieving revitalization goals within the current timeframes. These failures can be attributed to Authority mismanagement of the HOPE VI program and the Authority’s inability to administer a large redevelopment project. Without knowing the financial and programmatic status of many of its HOPE VI activities, the Authority cannot adequately administer its HOPE VI program in an economic and effective manner and with assurance of success. In 2004, HUD questioned the Authority’s accomplishments and abilities and made several recommendations for improvements. However, the Authority did not make any measurable improvements. As such, not until the Authority reevaluates the scope and amends its plan so that the project neighborhood can be revitalized and program objectives can be achieved in a timely manner, will the remaining balance of $7,466,678 in HOPEVI funds be more efficiently used and the reduced costs will benefit the program. The remaining findings contained in this audit report are also indicative of the Authority’s inability to manage the HOPE VI program in accordance with appropriate requirements. 12 Recommendations We recommend that the director, Buffalo Office of Public Housing, require the Authority to 1A. Implement procedures that will ensure that all collateral investments and in- kind services for the HOPE VI project are documented and quantified. In addition, the Authority should continue to work collaboratively with its partners on this project. 1B. Reevaluate the scope of its revitalization plan and amend the plan accordingly, so that HUD can reassess whether the Authority is able to meet its primary objective of revitalizing the project neighborhood. We also recommend that the director, Buffalo Office of Public Housing, 1C. Determine whether the amended revitalization plan is effective enough to ensure that the remaining $7,466,678 in funds will be put to better use or if the Authority can only achieve certain objectives, consider reducing the remaining amount of grant funds proportionately. 13 Finding 2: The Authority’s Controls over HOPE VI Contract Administration Were Inadequate The Authority’s administration of HOPE VI professional service contracts did not fully comply with applicable HUD regulations and requirements. For three professional services contracts associated with the HOPE VI program, 1) excessive fees were paid for application services, 2) a consulting contract was improperly modified, and 3) administration of a financial consulting contract was inadequate. As a result of the noncompliances, the Authority incurred unsupported costs of $242,664, and cost efficiencies totaling $74,099 were identified. The deficiencies can be attributed to the Authority’s weak system of controls over contract administration. Several contracts were modified by change orders that authorized increased cost limitations. Therefore, we selected a sample for review consisting of the three contracts that included the largest cost limit modifications. The three contracts were for professional services and were originally executed with not-to-exceed cost limitations. Nonetheless, each contract was modified to provide additional funding for significant changes to the scope of services. All three contracts failed to comply with HUD regulations and requirements. Excessive Fees Paid for HOPE VI Application Services Because the Authority did not follow federal procurement regulations, $181,762 was paid to an architectural firm for a contract that was not to exceed $40,000. The excessive costs, which were more than 350 percent above the original maximum amount, were for architectural preconstruction and community planning services enabling preparation of the HOPE VI application. Federal regulations at 24 CFR [Code of Federal Regulations] 85.36(2) require grantees to maintain a contract administration system, which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts. The selected contractor submitted a letter to the Authority before the competitive request for proposals, indicating familiarity with the HOPE VI target area of Cornhill. In responding to the request, the contractor promoted its firm as being experienced in the Cornhill neighborhood and agreed to do all of the HOPE VI application preparation for a not-to-exceed fee of $40,000. A review of the selection process shows that this contractor was chosen over competing proposals based upon the low price of $40,000. The contract was executed in March 2002. However, despite its agreement to conduct all of the required application work for the $40,000 fee, the company billed $80,000 and at least 1,389 hours through September 2002. The Authority, however, did not approve the $40,000 contract increase until October 2002. As a result, the work performed in relation to the billings over the original $40,000 was 14 done without authorization. Thus, the contractor had no contractual authority to incur those charges. The contractor then billed an additional $89,152 for application services from September to December 2002. Once again, the work and billings were conducted without approval and authorization. The approval to go from $80,000 to $180,000 was not provided by the Authority’s board until March 19, 2003, and was signed by the executive director on April 7, 2003. All of the billings were for HOPE VI application services, and the services provided were promised under the contract for the $40,000. From September through December 2002, the contractor billed another 1,345.5 hours. More than 2,900 hours were eventually billed for HOPE VI application services. Representatives of the contractor and the Authority attempted to provide justification for the substantial price increases. Our review of the change order justifications determined that the reasons provided for the increases were not valid. First, the contractor and the Authority cited the increased number of meetings and revisions to the plan. However, the scope of work required the firm to attend all necessary meetings and conduct whatever work was necessary to assist the Authority with the HOPE VI application. Second, the contractor and the Authority cited a larger area than anticipated when the proposal was submitted, yet this argument does not have merit when compared with the request for proposal’s scope of services. The total amount paid for the HOPE VI application services was $181,762, when the maximum allowed by the procurement and contract process was $40,000. For this reason and the reasons mentioned above, we consider $141,762, which represents the amount paid in excess of the $40,000, as excessive costs for the HOPE VI application services. Consulting Contract Improperly Modified A contract for consulting services with a not-to-exceed limit of $85,000 was awarded on March 28, 2002, to assist the Authority with its HOPE VI application process, although the contractor’s proposal did not fully comply with the request for proposals provisions. The Authority authorized a change order increasing the contract limit by $20,000 on the same day the contract was awarded. The contract was modified three more times by change orders through November 5, 2003, adding an additional $85,000 to the contract dollar limit. These four change orders increased the contract from a not-to-exceed limit of $85,000 to a modified amount of $190,000, thus increasing the original contract amount by about 124 percent and significantly modifying the scope of services to be provided. Rather than initiating a new request for proposals, the Authority opted to arbritrarily modify the contract on four occassions, thereby inappropriatly restricting 15 competition for the additional services. In addition, contrary to regulations, the Authority did not conduct the required cost or price analysis for any of the four contract change orders executed. Federal regulations at 24 CFR [Code of Federal Regulations] 85.36(f)(1) require grantees and subgrantees to perform a cost or price analysis in connection with every procurement action including contract modifications. Further, 24 CFR [Code of Federal Regulations] 85.36(a)(9) requires grantees and subgrantees to maintain records sufficient to detail the significant history of a procurement. These records will include but are not limited to the rationale for the method of procurement, selection of a contract type, contractor selection or rejection, and the basis for the contract price. The Authority did not maintain sufficient records to track the history of the procurements as required. From the number of change orders processed, it is clear that the Authority paid for services well beyond the initial funding limitations for this contract. Further, it appears that the Authority was instructing the contractor to submit change orders. For example, in a February 26, 2003, correspondence, Authority officials advised the contractor that the balance left on the contract was $6,563, while further instructing the contractor to provide the authority with an outline of additional costs it would recommend for the HOPE VI grant implementation period. Authority officials further requested that the contractor provide the information as soon as possible so that the Authority could determine the size of the change order to approve at that time. Accordingly, it appears that the Authority initiated at least one modification to the contract by requesting that the contractor determine the level of additional funding to be included in a proposed change order. This does not appear to be in compliance with 24 CFR [Code of Federal Regulations] 85.36, which provides that all procurement transactions will be conducted in a manner that provides for full and open competition. The history of this procurement action illustrates that administration over the consulting contract was mismanaged, thereby violating the above federal regulations. This not-to-exceed consulting contract went from $85,000 to $190,000 due to change orders that improperly modified the contract and prevented open competition. As of March 2004, the Authority had disbursed $164,873, leaving a balance of $25,127. As a result of these noncompliances, $79,874, which represents all disbursements made in excess of the original contract amount ($164,873 – 85,000), is considered to be unsupported, and the Authority should be prohibited from expending the undisbursed contract balance of $25,127; this amount should be considered a cost efficiency. 16 Administration of Financial Consulting Contract Was Inadequate. On November 14, 2003, the Authority awarded a contract for HOPE VI financial consulting services with a not-to-exceed limit of $30,000. Less than seven months later, on June 4, 2004, the Authority authorized a change order of $70,000 to add additional funds to the contract limit, while also indicating a new completion date of September 1, 2007. The $70,000 change order represents a 233 percent increase from the original contract, and it modified the contract limit to $100,000. Therefore, the change order represented a significant change in the scope of services to be provided. The Authority could not provide evidence that the required cost price analysis had been conducted before contract modification. The only documentation maintained in the Authority’s contract files relating to the change order was two faxed documents, dated September 20, 2004. One of the documents contained the change order itself and indicated a change order initiation date of April 1, 2004; however, the document signatures indicate that it was signed by the Authority on June 4, 2004, and by the contractor on June 5, 2004. The second faxed document was identified as a change order request, and it included details explaining that additional services had already been completed and that other services were needed. Therefore, it is unclear from the documentation whether certain services were provided by the contractor before execution of the change order. Since the Authority did not conduct a price cost analysis for the contract modification, costs incurred of $21,028, which exceeded the original not-to- exceed contract limit of $30,000, are considered unsupported, and the Authority should be prohibited from expending the undisbursed modified contract balance of $48,972, which should be considered a cost efficiency. Conclusion The above deficiencies show that the Authority’s controls over contract administration relating to the HOPE VI program did not ensure that costs incurred for services were reasonable and necessary. Recommendations We recommend that the director, Buffalo Office of Public Housing, instruct the Authority to 17 2A. Establish controls to ensure compliance with all applicable federal, state, and local procurement policies and regulations, to include compliance in the areas of (1) performing cost estimates and/or price analyses for all future procurement activities, (2) ensuring that all procurement transactions are conducted in a manner that provides for full and open competition, and (3) properly administering contracts after execution. 2B. Provide documentation to justify the $242,664 in unsupported costs [$141,762 + $79,874 + $21,028], so that HUD can make an eligibility determination, and reimburse from nonfederal funds the amount of any unsupported costs determined to be ineligible. 2C. Discontinue activities associated with the consulting and financial consulting contracts that were improperly modified and ensure that the remaining contract balance of $74,099 [$25,127 for the consulting contract and $48,972 for the financial consulting contract] is not disbursed. 2D. Prepare new requests for proposal if additional consulting or financial consulting services are deemed necessary. 18 Finding 3: Questionable Administrative Costs Were Charged to the HOPE VI Program Contrary to its grant agreement and federal requirements, the Authority disbursed HOPE VI program funds for questionable administrative expenditures. These expenditures were associated with (a) salary allocations; (b) office supplies, equipment, and computer software; (c) reimbursement to the Authority for various expenditures; (d) credit card charges; (e) other miscellaneous expenses; (f) local utilities and taxes; and (g) food and beverages. We attribute these deficiencies to the Authority’s failure to implement controls over disbursements that were sufficient to ensure compliance with applicable regulations. Consequently, Authority officials cannot ensure that they charged only reasonable and necessary administrative costs to the HOPE VI program. Federal Regulations Federal regulations at 24 CFR [Code of Federal Regulations] 85.3 include “any public housing agency” in the definition of a local government. The HOPE VI grant agreement between HUD and the Authority and 24 CFR [Code of Federal Regulations] 85.22(b) require the Authority to comply with the cost principles of Office of Management and Budget Circular A-87, “Cost Principles for State, Local, and Indian Tribal Governments.” Attachment A, paragraph C(1)(a), requires that all costs be necessary and reasonable for proper and efficient performance and administration of federal awards, and paragraph C(1)(j) requires that all costs be documented. Therefore, the Authority is required to maintain records sufficient to document the reasonableness and necessity of expenditures. In addition, 24 CFR [Code of Federal Regulations] 85.20 requires that accounting records be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records, contract and subgrant awards documents, etc. Between July 3, 2003, and December 31, 2005, the Authority disbursed HOPE VI program funds totalling $75,869 to pay for questionable administrative expenditures. The details are described as below. Salary Allocations During the audit period, the Authority made journal entries detailing $30,076 charged to the HOPE VI program for salary allocation for fiscal years ending June 30, 2004, and June 30, 2005. The Authority was unable to provide sufficient payroll data to support the salaries allocated, and the journal entries were not descriptive. Further, as discussed in finding 4, the Authority lacked an acceptable cost allocation plan. As a result, we question the $30,076 pending an eligibility determination by HUD. 19 Payments for Office Supplies, Equipment and Computer Software The Authority could not provide adequate documentation to support expenditures totalling $20,148 for a laptop computer, computer software, file cabinents, a digital projector, general office supplies, and copier machine lease fees and their related supplies. There was no evidence to support that price quotes had been obtained for these purchases. Also, there was no invoice on file for the purchase of the digital projector, and it appears that payment, which occurred from two to six months after the purchase of the projector, was based on the vendor’s statement of account. In addition, contrary to the Authority’s policy requiring purchase orders of more than $1,000 to be signed by the cxecutive director, computer software was purchased without the appropriately authorized purchase order. Further, the purchase requistion and purchase order to support the costs associated with the copiers and their related supplies were not properly signed. The Authority did not have a copy of the maintenance agreement for the leased copier on file. It could not provide adequate supporting documentation, such as vendor invoices, purchase requisitions, and purchase orders, for overage charges for excessive copies. Accordingly, we consider the $20,148 to be unsupported and recommend that HUD make a determination on the eligibility of these charges. Reimbursements to the Authority for Various Expenses The Authority reimbursed its general operating account $11,628 for various costs including wages, benefits, office equipment, and supplies. The supporting documentation for these expenditures was nondescriptive in detailing the purpose and providing justification for the charges to the HOPE VI program. The Authority was unable to provide adequate accounting support such as vendor invoices, purchase requisitions, purchase orders, receiving reports, etc. Further, the small amount of supporting documentation that was provided does not agree with the amount charged to the HOPE VI program. Therefore, since the Authority did not provide adequate supporting documentation to substantiate that these expenditures were for reasonable expenses, we consider the $11,628 to be unsupported and recommend that HUD make a determination on the eligibility of these charges. 20 Credit Card Charges The Authority was unable to provide adequate documentation to support disbursements totalling $7,104 for charges made to a credit card. The charges included finance charges, Dunkin Donuts, airline tickets, gasoline, hotel rooms, late fees, travel advances, software, and tuition reimbursement. The documentation provided to us for review lacked adequate accounting support such as vendor invoices, purchase requisitions, purchase orders, and receiving reports. Accordingly, we consider the $7,104 to be unsupported and recommend that HUD make a determination on the eligibility on these charges. In addition, the documentation that the Authority provided to support some of the credit card purchases was disorganized, and the billing dates could not be reconciled to the amount of payment or to budget line item distribution. In addition, certain charges, such as those for Dunkin Donuts, gasoline, groceries, and miscellaneous expenses classified as marketing expenses, are questionable as to their eligibility. The marketing expenses included potpourri, candles, greeting cards, ribbons, shrink roll, liquid soap, laundry baskets, and a mirror. Further, Office of Management and Budget Circular A-87, attachment B, provides that costs incurred for interest on borrowed capital are unallowable. Some payments were made from two to six months after the items were purchased; thus, certain credit card billings included finance charges and late fees, which are not eligible uses of funds. Therefore, we recommend that $68 in ineligible costs be reimbursed to the HOPE VI program by the Authority from nonfederal funds. Other Miscellaneous Expenses The Authority could not provide adequate documentation to support expenditures totalling $3,821. The items include flooring materials, flooring installation, digital prints, and black and white copies. There was no evidence to support that price quotes had been obtained for these purchases. In addition, contrary to the Authority’s policy requiring purchase orders of more than $1,000 to be signed by the executive director, the digital prints and black and white copies were purchased without the appropriately authorized purchase order. The documentation that the Authority provided to support telephone conference call expenditures was nondescriptive as to the purpose and did not provide sufficient justification for the expenditure. Accordingly, we consider $3,821 in costs to be unsupported and recommend that HUD make a determination on the eligibility of these charges. 21 Payments for Local Utilities and School Taxes The Authority disbursed checks totalling $1,562 from HOPE VI program funds for payment of local utilities and school taxes that we consider ineligible expenses. The utility payments were for gas, electric, and municipal use in addition to municipal school taxes. The payments related to property not owned by the Authority. The property in question is owned by Stuben Manor, LLC, a limited liability partnership created by HOPE VI Developer Housing Visions, Inc., and Key Bank. The Authority charged these disbursements to account number 1400, entitled “Fees and Costs.” However, these payments do not have a proper relationship to HOPE VI program administrative costs. Accordingly, we consider the $1,562 to be ineligible and recommend that the Authority be instructed to reimburse this amount to the HOPE VI program with nonfederal funds. Food and Beverages Expenses The Authority was unable to provide adequate documentation to support the necessity of disbursements totalling $1,153 for food and beverage items consumed during meetings related to the HOPE VI program. These expenses consisted of assorted food items, a luncheon for the HOPE VI program partners, and a banquet. Accordingly, we consider the $1,153 to be unsupported and recommend that HUD make a determination on the eligibility of these charges. The documentation that the Authority provided to support the banquet expenditure was nondescriptive as to the purpose and did not provide sufficient justification for the expenditure. In addition, the total amount paid exceeded the authorized purchase order amount by $304. Therefore, we recommend that the $304 be reimbursed to the HOPE VI program by the Authority from nonfederal funds. Appendix C contains a summary of questionable administrative costs chagred to the HOPE VI program. Conclusion The above deficiencies show that the Authority’s controls over administrative costs did not ensure that the costs incurred were reasonable and necessary expenses. The lack of controls has allowed for questionable administrative costs to be charged to the HOPE VI grant program. 22 Contrary to applicable requirements, the Authority lacked documentation to show that $75,869 in HUD funds used to pay for administrative costs was for reasonable and necessary expenses. The Authority paid $1,935 in ineligible costs and $73,934 in unsupported costs from HUD funds charged to the HOPE VI project. Recommendations We recommend that the director, Buffalo Office of Public Housing, require the Authority to 3A. Implement procedures and effective disbursement controls to ensure that all transactions charged to the HOPE VI grant are properly incurred, supported, and in compliance with applicable regulations. 3B. Reimburse the grant from nonfederal funds the $1,935 in ineligible costs. 3C. Provide additional documentation and justification for the $73,934 in unsupported costs so that HUD can make an eligibility determination. If any unsupported costs are determined to be ineligible, they should be reimbursed from nonfederal funds. 23 Finding 4: The Authority Lacked an Acceptable Plan for Allocating Costs to Its HOPE VI Program Contrary to federal requirements, the Authority did not have an acceptable plan to support the allocation of costs to its HOPE VI program. It periodically allocated certain costs such as wages and fringe benefits but neglected to allocate other indirect costs. The Authority’s allocation plan for wages and fringe benefits was not adequately supported or detailed. We attribute these deficiencies to the Authority’s unfamiliarity with federal cost allocation procedures. As a result, the Authority’s method of allocating costs to the HOPE VI grant was incomplete and did not ensure that the grant was bearing a fair share of the costs as required. Federal Requirements Federal regulations at 24 CFR [Code of Federal Regulations] 85.22(b) require the Authority to follow Office of Management and Budget Circular A-87, “Cost Principles for State, Local, and Indian Tribal Governments.” Section 85.3 of the regulation includes “any public housing agency” in its definition of a local government. Office of Management and Budget Circular A-87, attachment A, paragraph A1, provides that state, local, and federally recognized Indian tribal governments shall establish principles to provide that federal awards bear their share of costs. Office of Management and Budget Circular A-87, attachment E, section B3 and 4, states that an “indirect cost pool” is the accumulated costs that jointly benefit two or more programs or other cost objectives, and “base” means the accumulated direct costs (normally either total direct salaries and wages or total direct costs exclusive of any extraordinary or distorting expenditures) used to distribute indirect costs to individual federal awards. The direct cost base selected should result in each award bearing a fair share of the indirect costs in reasonable relation to the benefits received from the costs. Further, Office of Management and Budget Circular A-87 provides two methods that local governments can use to allocate costs to federal grants. The first method, as detailed in attachment C, paragraph A1, states that governments need a process whereby costs can be assigned to benefited activities on a reasonable and consistent basis. The cost allocation plan provides that process. All cost and other data used to distribute the costs included in the plan should be supported by formal accounting and other records that support the propriety of the costs assigned to federal awards. The second method, as detailed in attachment E, section D1, states that all departments or agencies of the governmental unit desiring to claim indirect costs under federal awards must prepare an indirect cost rate proposal and related documentation to support those costs. 24 Certain Costs Periodically Allocated The Authority’s plan for allocating costs included salary and fringe benefit allocations for selected staff but failed to include other allocable costs or an explanation as to why other costs were not included in the plan. The HOPE VI coordinator explained that certain costs such as salaries and wages were allocated periodically; however, other indirect costs were not allocated to the grant. HUD’s HOPE VI budget guidance, dated June 2005, provides that budget line item 1410 [Administration] is intended for costs associated with the general, overall administration of the HOPE VI grant by the grantee. In addition to staff salaries and benefits, the budget guidance lists several other specific eligible administration expenses, including such costs as those incurred for office space and utilities for office space, etc. Further, Office of Management and Budget Circular A-87, attachment E, section A4, states that typical examples of indirect costs may include certain state/local central service costs, general administration of the grantee department or agency, accounting and personnel services performed within the grantee department or agency, depreciation or use allowances on buildings and equipment, the costs of operating and maintaining facilities, etc. The Authority’s Method for Allocating Costs Was Not Documented The Authority did not have adequate documentation to support its allocation plan. For instance, the Authority’s plan was not adequately supported with detailed time sheets or a time study to support the rates used to allocate wages by staff position, nor did the plan provide reasoning for not allocating nonsalary indirect costs to the grant. The Authority’s plan merely listed (1) selected employee by name and title, (2) an apparent percentage of time and number of hours spent on HOPE VI activities, (3) general HOPE VI duties conducted by position, and (4) a notation stating cost per employee plus benefits. No additional documentation was included with the Authority’s plan to indicate how the allocable percentages were determined or how the salary cost totals were calculated. In addition, the fringe benefits section of the plan did not describe the nature of the fringe benefits, nor did it describe how the fringe benefit amounts would be determined. 25 Cost Allocation Issue Previously Noted by HUD The HUD Buffalo Office of Public Housing conducted a financial review of the Authority in May 2004. The Authority was cited by HUD for not having established and/or updated a formal cost allocation plan. HUD recommended that a formal allocation plan be developed in accordance with Office of Management and Budget requirements. HUD further recommended that the plan contain the rationale for the allocation process, as well as how it would be executed and when it would be adjusted to reflect updated information. Two years later and despite HUD’s recommendations, the Authority had not established an acceptable cost allocation plan to include the HOPE VI grant. In particular, as discussed above, the Authority’s allocation plan did not contain the rationale for the allocation process. Conclusion Authority management had not implemented a cost allocation plan to ensure that costs allocated to the HOPE VI grant were accurate and reasonable. As a result, the Authority lacked assurance that costs charged to the HOPE VI program were reasonable in relation to the benefits derived from the costs incurred. Further, it is likely that the Authority’s operating fund has been charged with other allocable indirect costs that have provided benefit to the HOPE VI program, further burdening an already stressed operating budget. Consequently, the Authority’s ability to effectively control its HOPE VI program budget is diminished. Recommendations We recommend that the director, Buffalo Office of Public Housing, require the Authority to 4A. Develop and implement a cost allocation plan and/or establish an indirect cost rate proposal in accordance with Office of Management and Budget requirements. Once an acceptable cost allocation plan or indirect cost rate proposal is developed, the Authority should ensure that all costs are properly allocated to benefitting sources. 4B. Establish procedures and controls to ensure that its plan for allocating costs is updated as necessary. 26 SCOPE AND METHODOLOGY Our review focused on the Authority’s HOPE VI grant program. To accomplish our objectives, we interviewed HUD officials and Authority staff. In addition, we reviewed applicable laws, regulations, and other HUD program requirements and the Authority’s program files for the HOPE VI grant program. Various documents including financial statements, general ledgers, bank statements, invoices, purchase orders, contracts, check vouchers, HUD monitoring reports, and the Authority’s audited financial statements were also reviewed during the audit. As of the end of our fieldwork, $7,466,678 of the $11.5 million in HOPE VI funding provided by HUD, was unspent. If the Authority implements our recommendations by amending its revitalization plan so that the project neighborhood can be revitalized and the program objectives can be achieved in a timely manner, the remaining balance of HOPE VI funds will be more efficiently used and the reduced costs will be a benefit to the program. As such, the Authority could then assure HUD that the remaining funds are being put to better use. The review covered the period between January 1, 2003 and December 31, 2005, and was extended as necessary. We performed our audit work from February through June 2006 at the Authority’s office located at 509 Second Street, Utica, New York. We also performed audit work at the offices of the Authority’s not-for-profit corporation, the Rebuild Mohawk Valley, Inc., located at 524 Elizabeth Street, Utica, New York. The review was conducted in accordance with generally accepted government auditing standards. 27 INTERNAL CONTROLS Internal control is an integral component of an organization’s management that provides reasonable assurance that the following objectives are being achieved: • Effectiveness and efficiency of operations, • Reliability of financial reporting, and • Compliance with applicable laws and regulations. Internal controls relate to management’s plans, methods, and procedures used to meet its mission, goals, and objectives. Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations. They include the systems for measuring, reporting, and monitoring program performance. Relevant Internal Controls We determined the following internal controls were relevant to our audit objectives: • Program operations – Policies and procedures that management has implemented to reasonably ensure that a program meets its objectives. • Validity and reliability of data – Policies and procedures that management has implemented to reasonably ensure that valid and reliable data are obtained, maintained, and fairly disclosed in reports. • Compliance with laws and regulations – Policies and procedures that management has implemented to reasonably ensure that resource use is consistent with laws and regulations. • Safeguarding of resources – Policies and procedures that management has implemented to reasonably ensure that resources are safeguarded against waste, loss, and misuse. We assessed the relevant controls identified above. A significant weakness exists if management controls do not provide reasonable assurance that the process for planning, organizing, directing, and controlling program operations will meet the organization’s objectives. 28 Significant Weaknesses Based on our review, we believe the following items are significant weaknesses: • The Authority did not establish controls and procedures to ensure that administration of the HOPE VI grant program was conducted in a manner that would achieve program objectives (see finding 1). • Controls and procedures were not established to ensure the validity and reliability of HOPE VI data. The Authority was not sufficiently tracking the HOPE VI program partner activities, and cost allocations were charged to the grant without the benefit of an adequate cost allocation plan (see findings 1, 3, and 4). • The Authority did not have an adequate system to ensure compliance with laws and regulations relating to the payment of certain HOPE VI contracting and administrative costs charged to the grant (see findings 2, 3, and 4). • The Authority did not have an adequate system to ensure that resources were properly safeguarded when it charged questionable contracting and administrative costs to the grant (see findings 2 and 3). 29 FOLLOW-UP ON PRIOR AUDITS Report No. 2006-NY-1005 Utica Municipal Housing Authority, Utica, New York February 21, 2006 We issued the above audit report pertaining to the general operations of the Authority. The report contained three findings with recommendations for corrective action. Finding 1 involved the Authority providing unauthorized medical insurance benefits totaling $511,480 for retiree medical costs. The recommendations are still open as the Authority contends it does not have any nonfederal funds available to reimburse the low-rent housing program, and HUD has requested a legal opinion from the Office of General Counsel regarding the definition of nonfederal funds, which may qualify for the repayment of disallowed costs to the low-rent housing program. Regarding finding 2, HUD has also requested a legal opinion from the Office of General Counsel pertaining to the questioned $140,116 that resulted from the Authority’s deficient system for procuring and awarding contracts. 30 APPENDIXES Appendix A SCHEDULE OF QUESTIONED COSTS AND FUNDS TO BE PUT TO BETTER USE Recommendation Ineligible 1/ Unsupported Funds to be put number 2/ to better use 3/ 1C $7,466,678 2B $242,664 2C 74,099 3B $1,935 3C 73,934 Total $1,935 $316,598 $7,540,777 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 polices or regulations. 2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program or activity when we cannot determine eligibility at the time of audit. Unsupported costs require a 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/ “Funds to be put to better use” are estimates of amounts that could be used more efficiently if an Office of Inspector General (OIG) recommendation is implemented. This includes costs reductions in outlays, deobligation of funds, withdrawal of interest subsidy costs not incurred by implementing recommended improvements, avoidance of unnecessary expenditures noted in preaward reviews, and any other savings which are specifically identified. In this instance if the Authority implements our recommendations by amending its revitalization plan and ceasing to spend funds on improperly modified contracts, it will ensure that the remaining balance of HOPE VI funds will be more efficiently used and HUD could be assured that vital program objectives will be achieved in a timely manner. Thus, the efficient use of the funds will be a benefit to the program. 31 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 1 32 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 2 33 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 2 34 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 3 Comment 4 35 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 5 Comment 3 36 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 6 Comment 7 Comment 8 Comment 9 37 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 9 38 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 10 Comment 9 39 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 9 Comment 9 Comment 11 Comment 12 40 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 12 Comment 12 Comment 13 41 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 13 Comment 14 42 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 14 Comment 15 43 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 15 Comment 16 44 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 16 Comment 1 Comment 6 45 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 17 46 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 17 47 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 17 48 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 17 49 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 17 Comment 18 50 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 18 51 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 18 Comment 19 Comment 20 52 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 20 Comment 6 Comment 21 Comment 22 53 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 22 Comment 23 Comment 23 Comment 24 Comment 6 54 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 25 Comment 26 Comment 26 Comment 23 55 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 21 Comment 27 Comment 21 Comment 6 56 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 6 Comment 28 Comment 6 57 Appendix B AUDITEE COMMENTS AND OIG’S EVALUATION Ref to OIG Evaluation Auditee Comments Comment 6 58 OIG Evaluation of Auditee Comments Comment 1 Officials for the Authority state the primary recommendation of the report is that HUD should reassess whether the Authority is able to meet its primary objective of revitalizing the project neighborhood and consider the reallocation of the remaining $7.47 million to another organization. Authority officials believe that much remains to be accomplished with the HOPE VI initiative, and they strongly concur with our audit report that the HOPE VI initiative must be more than just a housing program in order to effectuate the revitalization of the project neighborhood. We have reviewed and taken into consideration alternative recommendations provided by Authority officials in their comments. Based on this review, we revised our recommendations pertaining to finding one. We changed our recommendation to finding one to have HUD require the Authority to reevaluate the scope of its revitalization plan and amend the plan accordingly, so that HUD can reassess whether the Authority is able to meet its primary objective of revitalizing the project neighborhood. Based on this assessment, we recommend that HUD determine whether the new plan is effective enough, to ensure that the remaining funds will be put to better use, or if the Authority can only achieve certain objectives, HUD should consider reducing the remaining amount of grant funds proportionately. Comment 2 The Authority cites many events that have occurred since we left the audit site, however, these actions and recent accomplishments are responsive to our audit. The conclusions presented in our report are based on facts in place at the time of our review. However, regarding the June 2006 evaluation of the Hope VI grant conducted by the local College, which provides that the project met major goals. This study focused on the geographical and demographic mix of the community that resulted from relocating tenants of the distressed and now demolished Washington Court project; as such, the major goals of this study does not relate to the objectives of our audit. The study mentions that the goal of relocating tenants was accomplished. However, it does not mention that the tenants were not relocated according to the planned application of the Hope VI grant, which was to relocate the tenants to the Cornhill section of Utica and for them to become home owners. Nevertheless, the Authority needs to continue collaborating with its partners and document the cost of its successes to ensure that the total HOPEVI project is achieved. Comment 3 Officials for the Authority contend that contrary to the match figures presented in our draft report, they have leveraged over $36, million in grant funds, match tracking forms are now in place, and the amount of leverage generated for the HOPE VI project is now reported to HUD on a quarterly basis. However, as noted during the review and with the additional documents provided at the exit conference, the Authority was unable to assure the accuracy of the expenditures reported. For example, the Authority’s additional documents include a letter from a collateral partner dated August 31, 2006 that asserts that the partner has 59 expended $3.7 million towards the Hope VI program. However, the Authority provides no evidence that they verified these figures by examining supporting documents. OIG calculated $801,936 in collateral investment expenditures from the information provided to us during the audit and at no time did the Authority provide documentation to support any other amounts in collateral investments. Regarding the quarterly reports submitted to HUD, Authority officials admit that this form does not include figures for collateral investments, as such; their system does not appear to be complete and is insufficient to support some statements made in their response. Comment 4 Officials for the Authority state that the United States Department of Housing and Urban Development (HUD) released a draft audit report on the Authority’s HOPE VI Revitalization Program. This statement is not correct. The HUD Office of Inspector General (OIG) Office of Audit released a draft audit report on Authority’s HOPE VI Revitalization Program. While organizationally located within the Department, the HUD-OIG provides independent oversight in initiating and carrying out audits and investigations. Comment 5 Officials for the Authority contend that the conclusion presented in the finding is not supported by the facts and that they are complying with major program requirements as proposed in the application, plan and grant agreement. In addition, tracking forms are sent on a periodic basis to program partners to verify the matching funds. Furthermore, the officials contend that the match reports are submitted on a quarterly basis to HUD. OIG stands by the facts and conclusions presented in our report. The Authority’s tracking system was incomplete and unsupported, it did not track the $27 million of collateral activities and these activities were not included in the quarterly report to HUD. The Authority did not maintain adequate records on collateral investments; therefore, the accuracy of the financial data provided could not be determined. Further, the match reports that were provided to HUD on the activities other than collateral investments were not always supported with evidentiary matter. During the audit, OIG made numerous requests for basic financial information on all collateral activities and City match activities. Authority officials advised that they did not maintain the records in question and had to actually request documentation from various partners. Since the Authority did not adequately track all Hope VI funding and activities we maintain that they are not complying with all major program requirements. Comment 6 This comment applies to auditee comments on pages 37, 45, 53, 54, 56, 57 and 58. Throughout their response, Authority officials mention several corrective actions that they started or have planned to implement. Although we recognize these corrective actions, the majority of these actions are planned and were not implemented during our review, as such, they will be part of the audit resolution process to be reviewed when the actions have been completed. For the Authority actions that have commenced, the Authority’s response and appendices of information that was provided at the exit conference was not sufficient enough to encourage us to change our determinations. 60 Comment 7 Officials for the Authority contend that HUD never provided them with a copy of a 2004 monitoring report, nor provided grantees a protocol to track program match other than the Bearing Point report. Authority officials also contend that a HUD Washington representative applauded their match tracking system. However, OIG obtained the HUD monitoring report from Authority officials, and also received a copy from the Buffalo field office along with the Authority’s response to the financial review section of this monitoring report; as such, Authority officials were aware of this report. As for the match tracking system as stated above, the Authority’s system is incomplete because it does not maintain adequate tracking of all activities and appropriate records. Regarding the HUD official applauding the tracking system during a training class, we were not present at this training and we did not see such approval in writing. Comment 8 Officials for the Authority state that the OIG’s conclusion that there was lack of cooperation between the City of Utica and the Authority in connection with the HOPE VI program is inaccurate and false. Based on the Authority’s comments it appears that the relationship with the City has improved, however, during the audit, Authority officials informed us that the City was not always cooperative in providing data on HOPE VI program matters. In addition, during our audit Authority officials confirmed that the financial data from the City was not readily available until OIG provided a written request for the information, which prompted the Authority to consult with City officials to obtain the information. However, once the information was received from the City, the Authority could not reconcile substantial differences in the financial data related to the HOPE VI activities. Nevertheless, now that a Memorandum of Understanding has been finalized with the City, the Authority needs to continue to work with the City to document all amounts expended on the HOPE VI project to ensure its success. Comment 9 Subsequent to our audit, Authority officials provided financial information pertaining to key activities of the City of Utica match. We have reviewed the additional documentation submitted and conclude that the new information only details the Authority’s assertion that more funds have been expended, matched and additional commitments have been made. However, the documentation to support these assertions was not attached to their response. Consequently, the Authority is merely highlighting issues that are not cited in the report as deficient. However, our review of the additional documentation submitted pertaining to Codes Enforcement revealed that the figures provided do not reconcile to the Authority’s claim that the City has contributed a total of $69,232 towards codes enforcement activity. Further, the Authority has not provided any documentation to support the $187,220 in Economic Development cost other than a detail list of businesses in the HOPE VI program, which have benefited from economic development incentives from the City. The Authority did not provide any evidence or loan documents that we could test or review. In addition, a printout of 19 businesses that have received matching grant funds for Façade Improvement does not sufficiently support the claim that the City has provided $91,261 in facade grants. Lastly, in regards to In-Kind Staff services, the Authority asserts that the City’s intent was never to meet the goal of $1 million in salary and 61 benefits, but rather to offer the services of City staff whenever necessary to fulfill the goals of the project. However, the Authority provided insufficient documentation to support the basis of the $1 million estimate (e.g. for support for demolition cost, the City provided a schedule that listed addresses, census track data, block information, population statistics and total cost; but no basis for how this cost was calculated). Comment 10 Officials for the Authority contend that contrary to OIG’s claim that only $343,000 has been expended on infrastructure improvements; a total of $822,194 has been contributed. Nevertheless, although the Authority provided pictures of infrastructure improvements, Authority officials do not state how much of the contributions received have been expended. Furthermore, during the audit the Authority was unable to assure the accuracy of program expenditures detailed in the limited documentation that was available. Our review of the documentation submitted subsequent to the audit pertaining to infrastructure improvements noted that the documentation does not reconcile to the $822,194 in contributions claimed. The schedule provided details street boundaries, census tracts, income ranges, population statistics, and total cost; however, there was no evidence of what street repairs were made or how the total cost was calculated. Accordingly, the Authority needs to maintain better support for the accuracy of the contributions and expenditures pertaining to infrastructure improvements. Comment 11 Officials for the Authority disagree with our conclusion that in-kind expenditures from the City were not tracked. However, we reiterate that the Authority did not adequately track in-kind expenditures. The Authority’s tracking system is incomplete and unsupported because it does not maintain adequate tracking of all activities and appropriate records (see Comment 7). Nevertheless, Authority officials state that based on our recommendations, they will improve their tracking system and perform written assessments of the impact of collateral investments. Comment 12 Officials for the Authority agree that progress on this activity has been limited, however, they take issue with the statement that no funds have been invested to date because a total of $468,270 has been expended on the development of the Cornhill Commons Project. They cite various activities and potential funding that the Authority has taken to effectuate the development of the Cornhill Commons and the Community School, which was done so as recent as June 2006. However, at no time during our audit or during our visual tour in April 2006 were we provided with any financial or programmatic records that we could verify indicating any activity pertaining to Cornhill Commons and the Community School. Our review of the additional documentation provided by the Authority subsequent to our audit has determined that the $468,270 in claimed expenditures is not fully supported. The City cites various activities and potential funds to be expended, however, the documentation that they provided does not reconcile which activities pertain to the $468,270. Accordingly, better support is needed. 62 Comment 13 Officials for the Authority concur with OIG that housing goals set forth in the HOPE VI application will not be met. The officials contend that a revised revitalization plan was submitted to HUD on November 22, 2004, and HUD verbally approved a reduction in housing goals, however we were unable to ascertain this verbal approval with HUD field office officials. Such approvals should be documented in writing and not verbally granted. HUD field office officials have recently encouraged the Authority to submit a revised plan, and officials for the Authority intend to submit to HUD a revised plan within 60 days. We remind the Authority that their HOPE VI grant application was a competitive process and was approved based upon the assertions made by the Authority for housing goals as well as other promised HOPE VI activities. Although officials for the Authority cite various factors to explain why housing goals will not be met, it is OIG’s position that it is incumbent upon Authority management to adjust to changing conditions and to anticipate that there will be obstacles to overcome in such a large development project. Since the Authority acknowledges that housing goals will not be met, we changed our recommendation for finding one to have HUD require the Authority to reevaluate the scope of its revitalization plan and amend the plan accordingly, so that HUD can reassess whether the Authority is able to meet its primary objective of revitalizing the project neighborhood. Comment 14 Officials for the Authority contend that our conclusion on the inadequacy of code enforcement does not accurately reflect the facts. Authority officials contend that a total of 3,094 housing units in the Cornhill area have been inspected and just as many citations have been issued. However, we found the documentation submitted to support this claim inadequate as it appears to be merely a compilation of Section 8 units inspected by the City. Officials state that the City has taken aggressive action against landlords to correct code violations and that a law mandating periodic inspections by the Fire Department was recently enacted. The officials continue on to state that a massive infusion of federal dollars is needed to properly address code violations. Although a law mandating inspections may have been recently enacted, our review noted that the Authority maintained records on the specific HOPE VI target area parcels that had code violations, but did not provide documentation to support resolution of the violations noted in their records. Further, OIG inspection of the target area documented that many of the violations remain. The conclusions reached during our review are correct as documented by Authority records, which indicate that only $20,000 of the budgeted $863,000 was expended on code enforcement and that many violations remain uncorrected. The Authority does not dispute that only $20,000 has been expended by the City and further acknowledges that much work remains to be addressed. Lastly, Authority officials request that their photos, which demonstrate the positive impact of the HOPE VI program be included in our report. However, including photographs in our report that Authority officials want us to would effect the independence of our review. As such, the photographs depicted in our report that supports inadequate code enforcement, are just two of several photographs taken by OIG of numerous code violations identified during our visual inspection of the HOPE VI target area. 63 Comment 15 Officials for the Authority concur that the majority of Washington Court residents did not relocate to HOPE VI program housing. Conversely, the officials claim that the relocation of the residents to other housing has been a success. The Authority’s response does not address the primary relocation issue raised in the finding, which is that Washington Courts residents should be relocated to the Cornhill area and become homeowners. The fact that residents were simply relocated is not indicative of meeting the primary HOPE VI program objective for the residents. Authority officials assert that every displaced tenant has been contacted and offered an opportunity to reapply for housing in the HOPE VI project area. However, at no time during or subsequent to our audit were Authority officials able to provide documentation to support that such actions occurred. Further, Authority officials assert that 45 of the 60 relocated households were either disabled or elderly head of household and not employed. However, this information about resident circumstances should have been considered at the time the Authority declared the application goals of relocating such residents. Thus, the fact that only one resident to date has become a homeowner is evident that the Authority is not truly achieving the HOPE VI application goals. Authority officials cite an independent evaluation of the HOPE VI project, which concluded that the relocated Washington Courts residents were satisfied with the new residency. Based upon the living conditions of the Washington Courts project, as described in the HOPE VI application, the conclusion of the independent evaluation is not surprising. Residents of Washington Courts would have been satisfied with any new residency. Overall, officials for the Authority cite many obstacles to homeownership, including resident reluctance, and request that this finding be removed from the report. We remind the Authority that these issues should have been anticipated and methods for marketing and effectuating homeownership are the responsibility of the Authority management, as such, the finding stands as presented. Comment 16 The comments provided by officials for the Authority do not address the issue raised in the finding. The comments provided by the Authority address general Section 3 hiring and do not dispute the fact that Washington Court residents have not benefited from job opportunities as detailed in our finding. In addition, Authority officials agree to the statement that the demolition of Washington Courts project has only recently begun, however they object to the characterization of the demolition. Authority officials contend the delays were beyond their control and partly the responsibility of HUD. OIG maintains that the Authority is responsible for the management of the HOPE VI program and overcoming obstacles inherent during large development projects. The fact that the application was prepared in 2002 and the demolition still remains incomplete in 2006 cannot be denied. As such, the finding stands as presented. Comment 17 Officials for the Authority disagree with the fact that the contract for HOPE VI applications services was for a not-to-exceed value of $40,000. In summary, the officials contend that OIG failed to recognize that the contract had two parts 1) HOPE VI application services and 2) HOPE VI implementation phase. In 64 addition, there was a protracted pre-application phase that was initially expected to be only three months, but became nine months, which added to the application costs. The statement by Authority officials is inaccurate, whereas the OIG was fully aware that the contract contained two parts. The finding and related issues address only the portion of the contract relating to the application services. Contrary to assertions by Authority officials, their own records indicate that the contractor was indeed paid at least $181,762 for just the application services. This is despite the fact that the contract provided that all application services be provided for a not-to-exceed fee of $40,000. In addition, as noted in the finding, the contractor was competitively selected due primarily to the low price of $40,000. Officials for the Authority also cite the protracted time of application services as a cause of the contract application costs increasing from $40,000 to $181,762. Thus, the Authority appears to be making the argument that the application costs would have been within the $40,000 cap if only the application was filed in June 2002 rather than in December 2002. This argument does not have merit since the contractor had billed a total of $80,000 from April 2002 through September 2002. This is already double the original agreed upon costs of $40,000. The contractor then billed an additional $101,762 for application services, even though the application was filed only three months later. Further, the billings submitted do not provide specifics as to the additional services provided for the $101,762. Comment 18 Officials for the Authority contend that several factors extended the scope of work needed for the contract requiring the extension of the contract time period. Thus, the work beyond the original scope could not have been anticipated, and there was insufficient time to issue a new request for proposal. In addition, Authority officials contend that there was a cost analysis performed of the contract’s hourly rates and since the continued services were provided at the original hourly rates, it was not necessary to perform an additional cost analysis. We agree that the scope of this contract was significantly modified, thus emphasizing the need to comply with 24 CFR [Code of Federal Regulations] Part 85 requirements. Although this contract was modified on four occasions, including an initial change order authorization on the very same day the contract was awarded, the required cost analysis was not performed for any of the four modifications. The Authority chose to modify this contract on four occasions, increasing the original not-to- exceed contract limit of $85,000 to a modified contract limit of $190,000. It is clear that the Authority’s method of administering this contract were conducted in a manner that did not allow for full and open competition for the significant level of services to be provided. Comment 19 Auditee officials believe that the costs expended for HOPE VI Application Services were justified. However, the contract in question was modified in violation of 24 CFR [Code of Federal Regulations] Part 85.36. Specifically, there was no cost analysis for the increased change order amounts and no open competition provided for the additional services beyond the scope of the original contract. Although officials for the Authority contend that the procurement of this contract and the change orders complied with relevant HUD regulations and 65 their own procurement policies, the Authority intends to cancel this contract within the next thirty days. Comment 20 Officials for the Authority contend that this contract for financial services was modified to avoid the risk of HUD sanctions for falling behind project timetables. Authority officials state that a cost price analysis was conducted on March 28, 2002, and that the contractor’s additional services were based on the hourly rate provided for in the original contract. Our review determined that the initial contract was not awarded until November 14, 2003 and the contract modification change order was not authorized until June 4, 2004, thus the cost analysis conducted on March 28, 2002 cannot be related to the June 4, 2004 contract modification. Thus, the Authority was unable to provide evidence that the required cost analysis had been conducted for the contract modification. The Authority intends to terminate this contract with the next thirty days. Comment 21 Officials for the Authority contend that the HUD field office determined the cost allocation plan was in compliance and accepted the methodology on two occasions. Further, the costs were fully supported by the salary distributions reflected in the cost allocation plan and HOPE VI budget. In addition, Authority officials further contend that a time study would not have been useful since the percent of time charged were small and reasonable. However, the Authority was unable to provide any documentation that indicated that HUD approved their methodology for allocating cost, nor did they provide support for how the salary percentages for allocating the costs were determined; thus, a time study would be useful. Further, upon review of the draft report, HUD officials stated that the cost allocation plan should include support for its allocation percentages and that the plan should be updated annually. Nevertheless, Authority officials have stated that they will resubmit a more detailed cost allocation plan to HUD. Comment 22 Officials for the Authority concur that adequate documentation might not have been provided in connection with identified expenditures. In addition, Authority officials contend that no request was made to the Authority staff for detailed explanations of these expenses while the audit was being conducted, and they took issue with the statement that there was no evidence of price quotes. However, during the audit we provided Authority staff with a list of the transactions we wished to review, and requested that they provide all available supporting documentation pertaining to the transactions. The Authority staff provided us the available supporting documentation requested and, for their own reference made copies of all the documentation that was provided to us. Thus, the staff of the Authority was aware of the transactions reviewed during the audit. However, the documentation provided to us generally was disorganized, incomplete and lacked sufficient details. Further, the additional documents provided in the Authority’s appendix to their comments pertaining to the questioned administrative costs still did not adequately address the deficiencies noted in the finding. For example, to support the inadequate number of price quotes deficiency, Authority officials provided a single price quote provided by the same vendor cited in the deficiency. This clearly does not support nor address 66 the deficiency cited. In addition, although Authority officials stated that the equipment was purchased using state contract pricing, they did not provide evidence of this. Comment 23 We have reviewed the supporting documentation Authority officials attached to their response to support the questioned costs pertaining to copier supplies, maintenance and overage charges (check no. 1624), and determined that this documentation was inadequate. Although the contract and sales agreement detail such items as unit price and overage rates, the invoice provided by the Authority did not support or tally up to the amounts questioned. In addition, our review of the additional documentation pertaining to the reimbursements for various HOPES VI expenses (entitled check No. 1485 and GJ-106) found that these items were unexplained, disorganized, and could not be clearly traced to the amount questioned in the report. For example, the copies of travel itineraries submitted do not support the actual travel costs incurred. Further, the Authority submitted a stack of invoices, bills, contracts, etc. with no evidence on whether these items should have been charged to the HOPE VI project. Comment 24 Officials for the Authority concur that documentation pertaining to credit card charges was not available at the time of the audit, and further acknowledges that finance charges and late fees are not eligible expenses. The Auditee believes the items labeled as marketing expenses, are allowable, however, since they pertain to candles, potpourri, greeting cards, etc., we disagree. Comment 25 We have reviewed the additional documentation provided by the Authority and found the telephone conference calls costs to be unsupported. The documentation submitted is merely copies of the reservation confirmations for the calls and provides no support for the actual costs charged. Although officials for the Authority contend that the telephone conference call expenditures were justifiable in connection with the planning activities for the HOPE VI grant program start- up, the documents provided do not explain the purpose of the calls. Authority officials now state that they have discontinued this practice. Comment 26 Authority officials contend that the food and beverage expenses cited were in regards to the HOPE VI program and that they consider these food costs as legitimate operating expenses. Authority officials concur that during the audit, the supporting documentation was not available, and therefore provided, as an attachment to their response, documentation to support the expenses. We reviewed the documentation and determined it to be insufficient and inadequate. For example, the purchase of food and beverages to be served at HOPE VI meetings is questionable as to necessity and reasonableness. Further, press releases and meeting agendas submitted as supporting documentation pertaining to the banquet do not provide support for the actual costs questioned. Accordingly, the food and beverage expenses are still questionable. Comment 27 Officials for the Authority contend that they received from HUD verbal assurances that their cost allocation plan was in compliance with requirements. 67 However, during our review we were not provided any evidence to support this claim. Comment 28 The Authority contends that the draft report neglected to include significant accomplishments of the program and did not take into consideration the complexity of the financial arrangements involved. Nor did it consider the complexity in managing a multifaceted community revitalization effort involving multiple partners, not to mention the lack of HUD training and unreasonable demands of the HUD Notice of Funding Availability (NOFA). However, we remind Authority officials that our goal is to recommend improvements to existing program controls to ensure that the program is completed efficiently and effectively. As for the complexity of the program and the demands of the NOFA, HUD technical assistance and training can be obtained by contacting HUD and requesting such assistance or guidance. Nevertheless, these issues will not change the facts presented in the report, as such, if our audit recommendations are implemented the Authority can make a difficult project become less complicated. 68 Appendix C QUESTIONABLE ADMINISTRATIVE COSTS CHARGED TO THE HOPE VI PROGRAM Date Check / Description Ineligible Unsupported reference amount amount number Sept. 3, 1028 Assorted food items $37.86 2003 Jan. 23, 1247 2004 Luncheon for Hope VI program partners $235.40 Jan. 23, 1254 2004 Banquet $304.00 $880.03 Total food and beverage $304.00 $1,153.29 Oct. 17, 1095 2003 Computer software and file cabinet $308.98 Dec. 5, 1170 2003 Computer software $3,567.00 Dec. 5, 1172 2003 Laptop computer $1,380.00 Jan. 23, 1249 2004 Computer software $1,630.90 Jan. 23, 1411 2004 Digital projector $1,139.45 Mar. 5, 1445 2004 Computer software $1,825.00 Mar. 24, 1624 2004 Savin copier and related supplies $2,443.78 Mar. 24, 1624 2004 Savin copier and related supplies $3,987.22 June 22, 1624 2004 Leased copier maintenance and copy overages $311.45 June 22, 1624 2004 Leased copier maintenance and copy overages $787.15 July 1, 2004 1913 Computer and software $1,677.00 Oct. 22, 1792 2004 File cabinets and office supplies $545.47 Dec. 22, 1857 2004 Leased copier maintenance and copy overages $195.35 Sept. 28, 2256 2005 Leased copier - copy overages $350.16 Total office supplies, equipment, and computer software $20,148.91 June 30, GJ-32 2004 Salary allocation fiscal year June 30, 2004 $3,252.84 June 30, GJ-104 2005 Salary allocation fiscal year June 30, 2005 $26,823.96 Total salary allocation $30,076.80 May 25, 1485 2004 Reimburse authority - various costs $504.35 May 25, 1485 2004 Reimburse authority - various costs $1,231.33 May 25, 1485 2004 Reimburse authority - various costs $6,940.19 June 30, GJ-106 Reimburse authority - office equipment/supplies $2,952.98 69 2005 Total reimbursement To municipal housing $11,628.85 May 5, 2016 2005 Gas and electric use $416.92 Oct. 5, 2227 2005 Municipal water use $1,089.15 Oct. 19, 2231 2005 Municipal school taxes $56.24 Total utilities and taxes $1,562.31 Apr. 26, 1483 Various charges including late fees and finance 2004 charges $2,236.92 Apr. 27, 1483 Various charges including late fees and finance 2004 charges $164.65 Apr. 27, 1483 Various charges including late fees and finance 2004 charges $3,562.80 Nov. 26, 1791 Various charges including late fees and finance 2004 charges $382.18 Nov. 26, 1791 Various charges including late fees and finance 2004 charges $623.56 Nov. 9, 2254 2005 Marketing expenses, late fees, and finance charges $39.44 $134.20 Nov. 21, 2290 2005 Late fees and annual membership fees $29.50 $0.00 Total various credit card charges $68.94 $7,104.31 Sept. 12, 1040 2003 Flooring materials and installation $1,255.80 Oct. 28, 1110 2003 Health insurance $0.00 Oct. 29, 1118 2003 Telephone conference calls $876.91 Aug. 24, 2161 2005 Black and white copies and digital prints $1,689.00 Total miscellaneous charges $3,821.71 Subtotal $1,935.25 $73,933.87 Grand total of ineligible and unsupported costs $75,869.12 70
Utica Municipal Housing Authority, Utica, New York, Needs to Make Improvements in Administering Its HOPE VI Revitalization Program
Published by the Department of Housing and Urban Development, Office of Inspector General on 2006-11-02.
Below is a raw (and likely hideous) rendition of the original report. (PDF)