oversight

Weymouth Housing Authority, Weymouth, MA, Did Not Always Administer Its Housing Choice Voucher Program and Public Housing Program in Accordance With HUD Regulations and Its Annual Contributions Contracts

Published by the Department of Housing and Urban Development, Office of Inspector General on 2011-08-29.

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

                                                                Issue Date
                                                                    August 29, 2011
                                                                
                                                                Audit Report Number
                                                                    2011-BO-1009




TO:        Donna J. Ayala, Director, Office of Public Housing, Boston Hub, 1APH


FROM:      John A. Dvorak, Regional Inspector General for Audit, Boston Region 1, 1AGA

SUBJECT: Weymouth Housing Authority, Weymouth, MA, Did Not Always Administer Its
         Housing Choice Voucher Program and Public Housing Program in Accordance
         With HUD Regulations and Its Annual Contributions Contracts

                                  HIGHLIGHTS

 What We Audited and Why

            We audited the Housing Choice Voucher program and Federal public housing
            programs at the Weymouth Housing Authority as part of our annual audit plan.
            The overall objective of the audit was to determine whether the Authority had
            acceptable management practices to efficiently and effectively administer its
            Housing Choice Voucher program while providing decent, safe, and sanitary
            housing in compliance with U.S. Department of Housing and Urban Development
            (HUD) requirements and its annual contributions contracts. The specific
            subobjectives of the audit were to determine whether (1) contract rents were
            reasonable and based on rent reasonableness factors, (2) housing units complied
            with housing quality standards, (3) costs charged to the Housing Choice Voucher
            and other Federal public housing programs were properly allocated and
            supported, (4) the Authority complied with HUD procurement regulations and its
            own procurement policy, and (5) Housing Choice Voucher program funds were
            used in compliance with the Authority’s annual contributions contract.

 What We Found


            The Authority did not always administer its Housing Choice Voucher and public
            housing programs in accordance with HUD regulations and its annual
            contributions contracts. It (1) approved rents without adequately performing rent
           reasonableness determinations, (2) did not adequately perform and monitor the
           Housing Choice Voucher program’s housing quality standards process, (3) did not
           have an adequate cost allocation plan, (4) did not adequately perform
           procurements in compliance with HUD regulations and its own procurement
           policy, and (5) did not have a policy to ensure that Housing Choice Voucher
           program receipts were used only for the program. In addition, the Authority
           submitted its 2010 Section 8 Management Assessment Program in late February
           2011 and self-certified to items that it did not perform.

What We Recommend


           We recommend that the Director of the Boston Office of Public Housing require
           the Authority to (1) provide supporting documentation to show that the rents were
           reasonable for units for which the Authority paid more than $1.7 million in
           housing assistance in 2009 and more than $2 million in housing assistance in
           2010 (totaling more than $3.5 million) or repay from non-Federal funds any
           unsupported costs to its housing assistance payment reserve account; (2) repay
           from non-Federal funds the Housing Choice Voucher program housing assistance
           payment costs of $11,625 that should have been abated for units that were
           materially noncompliant with housing quality standards; (3) reimburse the Federal
           public housing and Housing Choice Voucher programs $159,388 from non-
           Federal sources and any additional amounts determined to be improperly
           allocated based on an equitable cost allocation plan and supporting
           documentation; (4) support the use of $69,860 paid for services that were not
           properly procured by soliciting price or rate quotations from three sources to
           procure a fee accountant, Housing Choice Voucher program inspector, attorney,
           and independent public accountant or reimburse the Federal programs for any
           unreasonable amounts paid; and (5) develop and implement a plan to ensure that
           the Authority records and reconciles interprogram fund transactions monthly to
           correct any imbalances.

           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 provided the Authority a draft report on July 25, 2011, and held an exit
           conference with officials on August 4, 2011. The Authority provided written
           comments on August 15, 2011, generally agreed with our findings and
           recommendations, and has taken some corrective actions that should eliminate the
           conditions noted in this report. 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                                                                 5

      Finding 1: The Authority Approved Rents Without Performing Adequate Rent   5
      Reasonableness Determinations

      Finding 2: Housing Choice Voucher Program Units Did Not Always Meet        8
      HUD’s Housing Quality Standards

      Finding 3: The Authority Did Not Appropriately Allocate Costs Between      14
      Federal and State Housing Programs

      Finding 4: The Authority Did Not Comply With HUD Procurement Regulations   18
      and Its Own Procurement Policy

      Finding 5: The Authority Inappropriately Used Housing Choice Voucher       21
      Program Receipts for Other Programs

Scope and Methodology                                                            23

Internal Controls                                                                25

Appendixes
   A. Schedule of Questioned Costs                                               27
   B. Auditee Comments and OIG’s Evaluation                                      28
   C. Ineligible Cost Allocations                                                37




                                           3
                         BACKGROUND AND OBJECTIVES

The United States Housing Act of 1937 established the Federal framework for government-
owned affordable housing. The Act also authorized public housing as the Nation’s primary
vehicle for providing jobs and building and providing subsidized housing through the U.S.
Department of Housing and Urban Development (HUD). HUD disperses funds to public
housing agencies under annual contributions contracts to provide subsidy payments or housing
assistance payments for participating low-income families.

In addition, the Act was amended by the Quality Housing and Work Responsibility Act of 1998
to create the Section 8 Housing Choice Voucher tenant-based program. The program is funded
by HUD and allows public housing authorities to pay HUD subsidies directly to housing owners
on behalf of the assisted family.

The Weymouth Housing Authority was incorporated in May 1948 by a town meeting vote. The
Authority is an autonomous local government subdivision which owns, manages, and maintains
Federal and State subsidized public housing developments and leased housing programs within
Weymouth, MA. It administers Federal and State housing, the Federal Housing Choice Voucher
program, and the Massachusetts Rental Voucher Program. The Authority is overseen by a five-
member policy setting board of commissioners, and the executive director is responsible for the
day-to-day operations.

The Authority is funded by HUD and the Massachusetts Department of Housing and Community
Development. In calendar year 2008, the Housing Choice Voucher program received $1.3
million from HUD, and in calendar year 2009, the program received $2.2 million from HUD.1
There was an average of 141 units participating in the program in calendar year 2009.

Our overall audit objective was to determine whether the Authority had acceptable management
practices to efficiently and effectively administer its Section 8 Housing Choice Voucher program
while providing decent, safe, and sanitary housing in compliance HUD requirements and its
annual contributions contract. The specific subobjectives of the audit were to determine whether
(1) contract rents were reasonable and based on rent reasonableness factors, (2) housing units
complied with housing quality standards, (3) costs charged to the Housing Choice Voucher and
public housing programs were properly allocated and supported, (4) the Authority complied with
HUD procurement regulations and its own procurement policy, and (5) Housing Choice Voucher
program funds were used in compliance with the Authority’s annual contributions contract.




1
 We reviewed the independent auditor’s reports for 2008 and 2009 because the 2010 report was not yet available
while we were onsite.


                                                        4
                                RESULTS OF AUDIT

Finding 1: The Authority Approved Rents Without Performing
Adequate Rent Reasonableness Determinations
The Authority did not follow adequate procedures to ensure that rents paid for assisted units
were reasonable in relation to rents charged for comparable unassisted units. This condition
occurred because the Authority failed to adequately monitor the inspection company hired to
perform rent reasonableness studies. As a result, the Authority may be subsidizing units at rents
that are lower or higher than what is considered reasonable.



 The Authority Did Not Perform
 Adequate Rent Reasonableness
 Determinations


               HUD regulations require that public housing agencies ensure that rents charged
               by owners to Housing Choice Voucher program participants be reasonable. In
               conducting rent reasonableness, the agency must determine whether the rent to the
               owner is a reasonable rent in comparison to rent for other comparable unassisted
               units. In determining comparability, the following factors must be considered:

                      (1)     Location and age of the unit;
                      (2)     Unit size, including the number of rooms and square footage of
                              rooms;
                      (3)     The type of unit, including construction type (for example, single
                              family, duplex, garden, lowrise, highrise);
                      (4)     The quality of the units, including the quality of the original
                              construction, maintenance, and improvements made; and
                      (5)     Amenities, services, and utilities included in the rent.

               In each case in which the agency is required to determine rent reasonableness, it
               must document its decision and the basis for it (such as information on the
               unassisted units compared) in the tenant’s file. This documentation should
               identify who conducted the rent reasonableness determination and when it was
               conducted.

               The company that the Authority hired to perform rent reasonableness studies did
               not complete the studies in accordance with HUD regulations and the Authority’s
               administrative plan. Our review of 15 tenant files disclosed that none contained a
               proper rent reasonableness study. The supporting documentation did not include
               all of the factors required by HUD. The documentation for the comparable units



                                                5
did not show the age of all properties, square footage of rooms, construction type,
amenities, services, or quality or condition of the units and building.

In addition, the Authority did not compare rents charged for unassisted units and
assisted units in the same building in which its Housing Choice Voucher program
tenants resided to certify that the contract rents were reasonable. For example, the
Housing Choice Voucher program contract rents for three-bedroom units at the
Tammy Brook project, located in Weymouth, MA, were higher than the rents the
units would receive in the unassisted market. The contract rents for the
Authority’s program tenants were $1,820, compared to $1,750 received for
unassisted units in the project. We verified that the rents charged for the
unassisted units have not changed in the past nine months. It appeared that the
rents for two-bedroom units were comparable for Authority tenants and unassisted
tenants at $1,380 monthly.

The Authority’s administrative plan states that the Authority will (1) determine
and document, on a case-by-case basis, that the approved rent is reasonable in
comparison to rent for other comparable unassisted units in the market; (2) collect
and maintain data on market rents in the Authority’s jurisdiction, which will be
updated on an ongoing basis, and rent information that is more than 12 months
old will be eliminated; and (3) include a rent comparability survey for rent
reasonableness that was completed with the housing quality standards inspection
(performed for all leased units and annual reinspections).

A public housing agency administering a Section 8 tenant-based assistance
program is required to submit an annual Section 8 Management Assessment
Program (SEMAP) to HUD within 60 days after the end of its fiscal year. The
information from the agency concerns the performance of the agency and
provides assurance that there is no evidence of seriously deficient performance.
HUD uses the information and other data to assess agency management
capabilities and deficiencies. One of the items assessed in the SEMAP is rent
reasonableness, and the Authority awarded itself the full 20 points. The Authority
reported that it had and had implemented a reasonable written method to
determine and document for each unit leased that the rent to owner was
reasonable based on current rents for comparable unassisted units. This method
takes into consideration the location, size, type, quality, and age of the unit and of
similar unassisted units and any amenities, housing services, maintenance, or
utilities provided by the owners. The Authority’s process for rent reasonableness
did not deserve the full 20 point; therefore, we recommend that the HUD Boston
Office of Public Housing rescore the 2010 SEMAP submission.




                                  6
Conclusion


             The Authority did not follow appropriate procedures to ensure that housing
             assistance payments for rents were reasonable in relation to rents charged for
             comparable unassisted units. Therefore, it may have approved rents that were too
             high, which would have limited the number of families that could be assisted.
             The Authority needs to ensure that rents are reasonable so it can provide the
             greatest housing opportunities to families that are in need of housing. Thus, we
             questioned housing assistance payments of more than $1.7 million in 2009 and
             more than $2 million in 2010, totaling more than $3 million, as unsupported.


Recommendations

             We recommend that the Director of HUD’s Boston Office of Public Housing
             require the Authority to

             1A. Implement controls to ensure that the rent to the owner is a reasonable rent in
             comparison to rent for other comparable unassisted units and that all factors are
             considered.

             1B. Provide supporting documentation to show that the rents were reasonable for
             units for which the Authority paid $1,764,197 in housing assistance in 2009 and
             $2,012,734 in housing assistance in 2010 (totaling $3,776,931) or repay from
             non-Federal funds any unsupported costs to its housing assistance payment
             reserve account.

             We also recommend that the Director of HUD’s Boston Office of Public Housing

             1C. Rescore the Authority’s 2010 SEMAP submission to correct points for
             indicator 2, reasonable rent.




                                              7
                               RESULTS OF AUDIT

Finding 2: Housing Choice Voucher Program Units Did Not Always
Meet HUD’s Housing Quality Standards
The Authority did not adequately ensure that its Housing Choice Voucher program housing units
met HUD’s housing quality standards. Further, it did not always ensure that inspections were
performed in a timely manner or properly abate housing assistance payments when repairs were
not made as required and overstated 2010 SEMAP scores for housing quality standards quality
control and enforcement. These conditions occurred because the Authority failed to adequately
monitor its inspection contractor and implement an effective quality control program. Also, it
did not have policies and procedures related to the abatement of housing assistance payments to
landlords. As a result, it used HUD funds to subsidize rents for families in units that did not
meet HUD’s standards for decent, safe, and sanitary housing; did not abate housing assistance
payments as necessary; and overstated its 2010 housing quality standards SEMAP scores to
HUD.


 Program Units Did Not Always
 Meet HUD Standards



              The Authority did not adequately ensure that its Housing Choice Voucher
              program housing units met HUD housing quality standards. We selected and
              inspected 25 housing units and found that 7 of the units (7/25 = 28%) inspected
              failed. Also, five (5/25 = 20%) of the seven that failed were materially
              noncompliant with housing quality standards.


 Inspections Were Not
 Performed in a Timely Manner


              The Authority did not perform timely inspections. Thirty-nine percent (83 of 211
              = 39%) of the units had not had an inspection performed within the last year.
              These inspections were performed an average of 190 days late, and the range was
              from 22 to as many as 421 days late. The inspections were not performed in a
              timely manner because the Authority was having problems with its housing
              inspection contractor and did not know that 38 project-based enhanced vouchers
              required annual inspections. The housing inspection contractor began performing
              inspections in March 2009 and within two years the contractor had been replaced.
              If the Authority had a written enforceable policy regarding timely inspections it
              may have corrected the issue sooner.



                                               8
Rents Were Not Abated When
Required


          The Authority should have abated two units based on multiple inspection reports
          for each of the units. The first unit was inspected on September 28, 2010, and did
          not pass the housing quality standards inspection. The Authority’s inspection
          contractor sent a letter informing the landlord of the deficiencies, a burner on
          stove did not work, replace refrigerator seal and install smoke detector. The
          Authority performed a housing quality standards quality control inspection on
          November 4, 2010, and the unit did not pass inspection for the same deficiencies
          identified in the September 28, 2010 inspection. The deficiencies should have
          already been corrected, and the Authority should have begun abating the
          landlord’s housing assistance payment. The unit was reinspected by the
          Authority’s new inspection contractor on February 25, 2011, and the unit did not
          pass inspection. The inspection contractor identified possible mold and water
          stains on the bathroom ceiling and two missing smoke detectors. We performed
          an inspection of the unit on March 16, 2011, and the unit did not pass the housing
          quality standards inspection. A picture of a hole and mildew in the bathroom
          ceiling follows.




          Another unit was inspected on August 24, 2010, and the housing quality standards
          inspection was listed as inconclusive. The Authority performed a housing quality
          standards quality control inspection of the same unit on October 14, 2010, and the
          unit did not pass inspection. The Authority sent a letter to the landlord informing
          it of many deficiencies including issues with two smoke detectors beeping and
          damaged front steps. The Authority’s inspection contractor performed a housing
          quality standards inspection on October 29, 2010, and found similar issues,
          including two smoke detectors beeping and damaged front steps. The inspection
          contractor performed a follow-up inspection on November 1, 2010, and passed
          the unit. We performed an inspection on March 17, 2011, and also found issues
          with smoke detectors and damaged front steps. In our opinion, most of the
          deficiencies were preexisting, the Authority’s inspection contractor did not


                                           9
perform a proper inspection on November 1, 2010, and the unit should have
failed. The Authority relied on the contractor’s November 1, 2010, inspection
and did not perform its own follow-up inspection. Pictures of some of the more
significant deficiencies follow.

Damaged smoke detector




Mildew and rotten window sill




                                10
          Porch railing detached from house wall and porch drop off




          We questioned the housing assistance costs paid that were not abated from the
          time the unit was reinspected by the Authority to the date of our inspection
          resulting in ineligible costs as follows:

           Tenant ID     Months housing         Monthly housing            Total
           number        assistance             assistance payment       questioned
                         payments should
                         have been abated
           P01-1007      4                      $1,090                        $4,360
           V10-0041      5                      $1,453                        $7,265
                                                Total ineligible cost        $11,625


SEMAP Scores for Housing
Quality Standards Were
Overstated


          The Authority filed its 2010 SEMAP and claimed the maximum points for
          indicator 5 – housing quality standards quality control, 5 points, and indicator 6 –
          housing quality standards enforcement, 10 points, without adequate supporting
          documentation. For housing quality standards quality control, a public housing
          agency supervisor is required to reinspect a sample of units during the agency’s
          fiscal year, and the sample should include a cross section of neighborhoods.
          Among the units selected for housing quality standards quality control were
          tenant numbers P01-1007 and V10-0041. The Authority inspected unit P01-1007
          and failed the unit on November 4, 2010, but did not follow up by having the
          deficiencies corrected and did not abate the landlord’s housing assistance
          payments. Similarly, the Authority failed unit V10-0041 on October 14, 2010;
          however, the unit was reinspected by the Authority’s inspection contractor and
          was passed on November 1, 2010. The Authority relied on the November 1,
          2010, inspection and did not return to perform its own inspection. It should have
          reinspected and failed the unit. It should also have begun abating the landlord’s
          housing assistance payments. These are two examples demonstrating that the


                                           11
             Authority did not adequately monitor the inspection contractor and should have
             policies and procedures to abate landlord housing assistance payments. The HUD
             Boston Office of Public Housing should rescore the Authority’s 2010 SEMAP
             submission for housing quality standards quality control and enforcement.


Conclusion


             The Authority did not adequately ensure that Housing Choice Voucher program
             units met HUD’s housing quality standards and were inspected in a timely
             manner, and it lacked an abatement process. We inspected 25 housing units, and
             7 (7/25 = 28%) failed. In addition, 83 of 211 units (83/211 = 39%) had not had an
             inspection performed within the last year, and the range was from 22 to 421 days
             late. Lastly, the Authority did not adequately monitor the inspection contractor
             and did not have policies and procedures to abate landlord housing assistance
             payments. As a result, it used HUD funds to subsidize rents for families in units
             that did not meet HUD’s standards for decent, safe, and sanitary housing; did not
             abate housing assistance payments as necessary; and overstated its 2010 housing
             quality standards SEMAP scores to HUD.

Recommendations



             We recommend that the Director of HUD’s Boston Office of Public Housing
             require the Authority to

             2A. Develop and implement a written policy to ensure that units are inspected on
             a timely basis.

             2B. Develop and implement policies and procedures to address the
             responsibilities with its newly hired inspection contractor.

             2C. Develop and implement written policies and procedures for the abatement of
             housing assistance payments to landlords.

             2D. Develop and implement an adequate written quality control inspection
             program.

             2E. Repay the Housing Choice Voucher program housing assistance costs of
             $11,625 that should have been abated from non-Federal funds.

             We recommend that the Director of HUD’s Boston Office of Public Housing




                                            12
2F. Rescore the 2010 SEMAP submission to correct points for indicator 5,
housing quality standards quality control, and indicator 6, housing quality
standards enforcement.




                                13
                                RESULTS OF AUDIT

Finding 3: The Authority Did Not Appropriately Allocate Costs
Between Federal and State Housing Programs
The Authority’s costs for salaries and maintenance labor, employee benefits, and other
administrative and operating expenses were not allocated appropriately and equitably between
the State and Federal properties in accordance with HUD requirements. This condition occurred
because the Authority relied on budget estimates to allocate costs and did not have a cost
allocation plan or other records necessary to clearly define and support costs charged. As a
result, its Federal programs were overburdened with ineligible costs totaling $159,388 (See
Appendix C) from January 1, 2009, to March 31, 2011.


 Federal Programs Were
 Overcharged $190,626 in
 Salaries



              The Authority did not comply with applicable HUD requirements to ensure the
              appropriate allocation for salaries and maintenance labor. It could not adequately
              support the proration percentages it used and could not demonstrate that the
              salaries and maintenance labor were allocated equitability between its Federal and
              State programs. HUD regulations (Public and Indian Housing Low-Rent
              Technical Accounting Guide 7501.1, section II) dictate that indirect costs are to
              be allocated to the HUD programs on an equitable basis. The Authority’s goal
              was to allocate salaries and maintenance labor based on a straight unit allocation
              methodology. However, the percentage ratios it used were not current and were
              based upon past experience, including what was dictated in the annual budget.
              Although, we recognize that the straight unit allocation methodology may not be
              the only acceptable cost allocation method, the Authority did not have a written
              allocation plan or explainable method for the allocation other than the straight unit
              allocation.


              We evaluated the Authority’s current allocations based on a review of financial
              records, job descriptions, results of staff interviews, and observations. The
              salaries of employees who performed Authority-wide tasks, such as the executive
              director, assistant executive director, bookkeeper, and office receptionist, were
              not distributed based on straight unit allocation. In addition, the salary for the
              State leasing specialist was charged 30 percent to the Federal public housing
              program and 45 percent to the Section 8 program; however, this individual
              worked almost exclusively with the Massachusetts Rental Voucher Program, with



                                               14
           the exception of minimal time spent working with 40 Federal enhanced vouchers.
           The salaries for the Authority’s resident services and public housing coordinator
           and tenant selector and occupancy coordinator were charged 43 and 40 percent,
           respectively, to the Federal public housing program, although the Authority’s
           public housing program was comprised of 405 State units and only 70 Federal
           units. We used a straight unit allocation methodology that divided salaries and
           maintenance labor by the number of units of housing affected to determine that
           the Federal public housing and Housing Choice Voucher programs were
           overcharged $190,626 in salaries, $180,830 and $9,796, respectively. We
           considered the $190,626 in salaries to be an ineligible cost.

Federal Programs were
Overcharged $8,183 in
Employee Benefits


           There were deficiencies with the Authority’s method of allocating employee
           benefits. Deficiencies noted in the payroll allocation method above also affected
           the allocation method used in allocating certain employee benefits, specifically
           health insurance taxes, unemployment compensation, and Medicare, because the
           Authority allocated these benefits using the same percentages as payroll.
           Therefore, to the extent (percentage) that the Federal programs were overcharged
           for salaries, they were also overcharged for certain related payroll benefit costs.
           We determined that $3,183 (Federal public housing – $3,019 and Housing Choice
           Voucher program – $164) was overcharged to Federal programs for health
           insurance taxes, unemployment insurance, and Medicare that should have been
           absorbed by State programs. We considered the $3,183 to be an ineligible cost.

           In addition, the Authority’s method of allocating group health insurance and
           retirement benefit costs (paid to the Town of Weymouth, MA) was not consistent
           from month to month and differed from the straight unit allocation methodology.
           We used a straight unit allocation methodology and determined that for the 3
           years combined, the Federal programs were undercharged for group health
           insurance and retirement benefits. We selected for review charges exceeding
           $10,000 since many dollar amounts at or below $10,000 were not allocated in the
           Authority’s cash disbursements records,
           as were most dollar figures exceeding $10,000. We determined that a net amount
           of at least $44,950 (Federal public housing - overcharged $36,244 and Housing
           Choice Voucher program – undercharged $81,194) was undercharged to Federal
           programs for group health insurance and a net amount of $22,721 (Federal public
           housing – undercharged $47,156 and Housing Choice Voucher program –
           overcharged $24,435) was undercharged to the Federal programs for retirement
           costs.

           Although the Federal programs may not have been overburdened with group
           health insurance and retirement benefit costs, the Authority’s percentage ratios



                                            15
            were not consistent throughout the year, and the allocation basis for the charges
            could not be substantiated. Therefore, the Authority needs to have a written cost
            allocation plan or method in place to ensure that costs are allocated properly.
            HUD Handbook 7420.6, chapter 5, paragraph 24c, stipulates under “Allocation of
            Expenses” that if the public housing agency administers other low-income
            housing programs or is involved in enterprises other than the housing assistance
            payments program and certain costs incurred are applicable to other than that
            program, it will be necessary to prorate such costs to charge the program with its
            applicable portion of the costs. The agency must maintain for audit purposes
            appropriate schedules and worksheets showing how the allocation of costs was
            made.



The Federal Program Was
Overcharged $39,365 for
Vehicles Used by the Authority


            There were deficiencies with the Authority’s method of allocating administrative
            and operating expenses other than salaries. The Federal public housing program
            absorbed the entire cost for two vehicles used at both State and Federal projects,
            resulting in ineligible costs of $39,365. One of the vehicles, which was in the
            possession of the executive director, cost $19,374 and was charged 100 percent to
            the Federal public housing program, although the executive director was also
            responsible for the State public housing program and the Massachusetts Rental
            Voucher Program. Based on a straight unit allocation, the Federal public housing
            program was overcharged $16,519. In addition, the Authority charged the entire
            cost of $26,796 to the Federal program for a vehicle used by the Authority’s
            maintenance staff. However, we were informed by an Authority employee that
            the vehicle was used primarily at Lakeview Manor, a State public housing project.
            Based on a straight unit allocation, the Federal public housing program was
            overcharged $22,846 for that vehicle.

            In addition to the two vehicles, we selected 22 administrative and operating
            expenses to determine how the Authority charged these items. This selection was
            based on what OIG and the Authority’s bookkeeper determined represented all
            allocable administrative and operating expenses (other than salaries). Based on a
            straight unit allocation, we determined that a net amount of $6,114 (Federal public
            housing – overcharged $17,237 and Housing Choice Voucher program –
            undercharged $23,351) was undercharged to the Federal programs. Although the
            HUD programs were not overburdened, the basis for the Authority’s allocation of
            these administrative and operating costs could not be substantiated. The
            Authority needs to have a written cost allocation plan or method in place to
            support how costs are allocated.




                                            16
Conclusion


             The Authority’s cost allocations were based on unsupported percentage ratios
             from past experience. The Authority failed to develop a cost allocation plan,
             which is necessary to clearly define and support the allocation percentages. As a
             result, the Federal programs were charged $159,388 more than their fair share of
             the costs for payroll and employee benefits and other administrative and operating
             costs. Without an allocation plan or other measurable basis, the reasonableness of
             costs charged to the Federal programs was not ensured.

Recommendations



             We recommend that the Director of the Boston Office of Public Housing require
             the Authority to

             3A. Establish and implement an equitable cost allocation plan that provides
                 reasonable assurance that payroll, employee benefit, and administrative and
                 operating costs are fairly allocated among Federal and State housing
                 programs.

             3B. Reimburse the Federal public housing and Housing Choice Voucher
                 programs $159,388 (See Appendix C) from non-Federal sources and any
                 additional amounts determined to be improperly allocated based on an
                 equitable cost allocation plan and supporting documentation.




                                             17
                               RESULTS OF AUDIT

Finding 4: The Authority Did Not Comply With HUD Procurement
Regulations and Its Own Procurement Policy
The Authority did not follow proper procedures for Federal procurements. We identified four
areas in which the Authority’s procurement practices did not comply with HUD regulations,
Massachusetts General Laws, and its own procurement policy. Specifically, the Authority did
not obtain and document price or rate quotations from an adequate number of qualified sources
when procuring services from three entities or companies. In addition, it paid for services
without executing contracts. These conditions occurred because the Authority did not establish
and implement effective management controls over the procurement process. As a result, there
was a lack of assurance that the procurement process used by the Authority was fair and
equitable and that $174,506 spent represented the most favorable prices that could have been
obtained. Of the $174,506 spent by the Authority, $69,860 was charged to its Federal programs
from January 2009 through March 2011.



 Price or Rate Quotations Were
 Not Solicited for Procurement
 of Ongoing Services


              The Authority could not furnish sufficient documentation to substantiate that it
              solicited price or rate quotations from an adequate number of sources when
              procuring ongoing services. It did not follow HUD’s or its own procurement
              procedures when procuring the following:

                         Fee accountant services,
                         Housing Choice Voucher program inspection services and rent
                          reasonableness studies, and
                         Attorney and legal services

               .

              Massachusetts General Laws regarding procurement of goods and services,
              chapter 30B, sections 3 and 4, establish that for the procurement of a supply or
              service in the amount of $5,000 or greater, a procurement officer must (1) seek
              written or oral quotations from no fewer than three persons customarily providing
              such supply or service; (2) record the names and addresses of all persons from
              whom quotations were sought, the names of the persons submitting quotations,
              and the date and amount of each quotation; and (3) maintain a written file on each
              procurement.


                                              18
           A housing authority must solicit price quotations from several entities or
           companies to achieve a reasonable cost and to provide increased fair access to the
           economic opportunities created through an open procurement. Although the
           Authority established written procurement policies that conformed to HUD’s
           policies and procedures, it did not follow its policy regarding small purchase
           procedures. The Authority’s Federal procurement policy dictates that, to the
           greatest extent feasible, the procurement process should promote competition and
           small purchases should be distributed among qualified sources. We considered
           $69,860 charged to the HUD programs to be unsupported.

                 Servicer         FY* 2009       FY 2010       FY 2011        Totals
            Fee accountant         $13,982         $14,142       $3,228       $31,352
            Inspector                 7,778         11,321            0        19,099
            Attorney                  6,984         10,114        2,311        19,409
                  Totals           $28,744         $35,577       $5,539       $69,860
           * FY = fiscal year

Written Contracts Were Not
Maintained


           Public and Indian Housing Low-Rent Technical Accounting Guidebook 7510.1,
           section II(8), states that the housing authority must maintain source documents
           and files that support the financial transactions recorded in the books of account
           and that provide an adequate audit trail. These documents include such items as
           contracts.

           The Authority failed to maintain written contracts or agreements with the three
           companies. Although the contract with its fee accountant expired on December
           31, 2010, the Authority had allowed the fee accountant to continue providing
           services since January 1, 2011, without a contract. In addition, there was no
           evidence of a written contract with the fee accountant for the period January 1 to
           December 31, 2009. There was no evidence that the Authority had maintained
           contracts with the other three entities or companies. Without a contract, it was not
           possible to determine whether the contractor’s invoices were properly submitted
           or whether the costs incurred by the Authority were reasonable. A contract not
           only serves to support the agreed up-on cost, but also defines services expected
           and describes the responsibilities of each party. For example, the Authority
           contracted out its physical inspections and rent reasonableness determination
           responsibilities for its Housing Choice Voucher program to an independent
           contractor, but the contractor performed poorly (see finding 2). The Authority’s
           failure to execute a contract may have contributed to the poor quality of the
           physical inspections and may have limited its recovery options for inadequate
           services billed and paid.




                                            19
Conclusion


             The Authority did not establish and implement effective management controls
             over the procurement process. This condition resulted in limited assurance that its
             procurement process was fair and equitable and that funds spent represented the
             most favorable prices that could have been obtained or the best quality of services
             that could be provided. A housing authority must solicit price quotations from
             several entities or companies not only to achieve a reasonable cost, but also to
             provide increased fair access to the economic opportunities created through an
             open procurement. A written contract not only serves to support the agreed up-on
             cost, but also defines services expected and describes the responsibilities of each
             party.


Recommendations



             We recommend that the Director of the Boston Office of Public Housing require
             the Authority to

              4A. Support the use of $69,860 by soliciting price or rate quotations from three
             sources to procure a fee accountant, inspector, attorney, and independent public
             accountant or reimburse the Federal programs for the applicable amount. If the
             $69,860 cannot be supported, the Authority should reimburse $46,701 to the
             Housing Choice Voucher program and $23,159 to the Federal public housing
             program.

             4B. Implement procedures to ensure that the Authority complies with HUD rules
             and regulations, Massachusetts General Laws, and its own Federal procurement
             policies regarding small purchases.




                                             20
                                RESULTS OF AUDIT

Finding 5: The Authority Inappropriately Used Housing Choice
Voucher Program Receipts for Other Programs
The Authority had interprogram fund transactions that had not been reconciled for calendar years
2008 and 2009. This condition occurred because the Authority did not have procedures and
controls to ensure that its Housing Choice Voucher program funds were used only to fund that
program’s expenditures or address program account imbalances and ensure that reconciliations
were completed. The imbalances occurred because the Authority used a revolving account and did
not ensure that specific programs paid only for costs associated with those specific programs. In
2008, the Housing Choice Voucher program was owed more than $65,000 from the revolving
fund; however, in 2009, the reverse occurred, and the Housing Choice Voucher program owed
the revolving account more than $56,000. The Authority did not reconcile the accounts and was
unable to identify which programs owed funds or had used funds from a specific program or
programs. As a result, Housing Choice Voucher program receipts were used to pay for other
program expenses.


 The Authority Did Not Use
 Housing Choice Voucher
 Program Funds Appropriately


              The Authority did not reconcile its interprogram fund transactions between
              Federal and State programs in calendar years 2008 and 2009. It used a revolving
              fund as a central account, and programs advanced funds to the revolving fund and
              made payments from the account. The independent audit report for 2008 stated
              that there were transactions between funds that were representative of lending or
              burrowing arrangements outstanding at the end of the fiscal year that were
              referred to as either due to or from other funds. As of December 31, 2008, the
              Authority’s year end, the Housing Choice Voucher program was owed $65,367
              from the revolving fund. The fee accountant was unable to identify what Federal
              or State program owed the Housing Choice Voucher program. This condition
              occurred because the Authority’s management had not established policies or
              procedures for reconciling and zeroing out the interprogram fund balances. The
              Authority did not comply with its annual contributions contract and Federal
              appropriation laws because Housing Choice Voucher program receipts were used
              for other programs. The contract states that program receipts may only be used to
              pay program expenditures. It further states that public housing agencies must
              maintain complete and accurate books of account and records for the program.
              As a result of its noncompliance, the Authority could not support $65,367 in
              transactions recorded in the interprogram accounts as of December 31, 2008.




                                               21
             The Authority had interprogram fund transactions between Federal and State
             programs in calendar year 2009. As of December 31, 2009, the Housing Choice
             Voucher program owed the revolving fund $56,232. The independent audit report
             for 2009 stated that the Authority used a central account known as a revolving
             account to make vendor payments. All of the individual programs had advanced a
             sum of money to establish the account. The individual programs reimbursed the
             revolving account monthly in arrears for their share of the expenditures of the
             revolving account. This process resulted in a due to or due from and represented
             interprogram fund transactions. The fee accountant was not able to determine
             which Federal or State programs provided funds to the Housing Choice Voucher
             program.


Conclusion


             The Authority had a central account called a revolving fund, through which the
             various Federal and State programs made advances and paid bills. In 2008 and
             2009, there were interprogram fund transactions and balances at year end, but the
             Authority did not have a policy for reconciling Federal and State programs. As a
             result, it did not comply with its annual contributions contract and Federal
             appropriation laws because Housing Choice Voucher program receipts are only
             supposed to pay for expenses related to that program and not other program
             expenses. Also, the Authority was unable to identify which programs owed funds
             or had used funds from a specific program or programs. The Authority should
             develop a policy to reconcile interprogram fund transactions and ensure that it
             complies with its annual contributions contract and applicable Federal
             appropriation laws.


Recommendations



             We recommend that the Director of HUD’s Boston Office of Public Housing
             require the Authority to

             5A. Develop and implement a plan to ensure that the Authority records and
             reconciles the interprogram fund transactions to correct any imbalances and
             ensure that Housing Choice Voucher program funds are only used for The
             Housing Choice Voucher program purposes in accordance with its annual
             contributions contract and Federal appropriation laws.




                                             22
                        SCOPE AND METHODOLOGY

We performed the audit at the Authority from January 20 to June 3, 2011. Our fieldwork was
completed at the Authority’s main office located at 402 Essex Street, Weymouth, MA. The audit
generally covered the period January 1, 2009, to December 31, 2010, and was extended when
necessary to meet our objectives. To accomplish our audit objectives, we

      Reviewed applicable Office of Management and Budget circulars, HUD handbooks and
       guidebooks, the Code of Federal Regulations, annual contributions contracts, appropriation
       laws, HUD public housing notices, and the Authority’s administrative plan.

      Conducted discussions with Authority officials to gain an understanding of the Authority’s
       financial structure, cost allocation, accounting controls, procurement practices, tenant
       occupancy, and monitoring policies.

      Reviewed independent public auditors’ reports as part of our testing for control
       weaknesses and reviewed media articles related to the Authority and its staff.

      Evaluated the most current HUD rental integrity review and SEMAP reports to identify
       potential issues or concerns. We also reviewed the most recent Voucher Management
       System report regarding voucher use and the accuracy and timeliness of reporting,
       including determining whether the report reconciled to the housing assistance payments
       contract reports and financial records.

      Evaluated internal controls and conducted sufficient tests to determine whether the
       controls functioned as intended and reviewed computer controls to identify potential
       weakness related to our objectives.

      Reviewed records of Authority board minutes and noted information relevant to the
       Section 8 program.

      Reviewed the Authority’s organizational chart and job descriptions to determine each
       staff member’s involvement with Federal programs and, using the Authority’s payroll
       distribution and cash disbursements reports, evaluated the Authority’s cost allocation
       practices for salaries and maintenance labor, employee benefits, and other administrative
       and operating expenses to determine whether the costs were allocated appropriately and
       equitably between Federal and State properties and in accordance with HUD
       requirements.

      Reviewed 15 tenant files based on a representative selection of random numbers
       generated by a statistical program from the State of Texas (State Auditor Office
       Statistical Tools, version 2.1). The size of the universe included 240 files, and we
       selected 25 files, including 10 files selected as a cushion, for our sample.




                                               23
      Selected and inspected a total of 25 Section 8 Housing Choice Voucher program units.
       Fifteen units were selected in the survey phase based on a representative selection of
       random numbers generated by the statistical program from the State of Texas. The size
       of the universe was 54 units that passed inspection from August 2010 through January
       2011, and of the 15 units selected, 11 were inspected. In the audit phase, we inspected
       the remaining 4 units selected in our initial sample of 15 and selected the next 10 units
       for inspection.

      Determined whether the Authority complied with HUD rules, regulations, and policies
       related to rent reasonableness for the Housing Choice Voucher program and determined
       whether contract rents charged to Section 8 tenants exceeded rents charged for
       comparable unassisted units in the same project or development.

      Evaluated the Authority’s procurement practices by selecting for review four
       procurements. Three of the procurements, namely services provided by a fee accountant,
       Section 8 inspector, and independent public accountant, were selected based on
       deficiencies or issues disclosed during the survey. In addition, we selected procurement
       for legal services because it represented the servicer with the largest costs incurred in
       fiscal year 2010. For those procurements, we reviewed invoices, written agreements, and
       bids or quotes solicited. The total dollar value of the procurements was $174,506.

      Reviewed financial statements for loans or transfers (due to or from accounts) to
       determine whether the Authority used Section 8 funds to support other programs.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.




                                               24
                              INTERNAL CONTROLS

Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

      Effectiveness and efficiency of operations,
      Reliability of financial reporting, and
      Compliance with applicable laws and regulations.

Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.



 Relevant Internal Controls
               We determined that the following internal controls were relevant to our audit
               objectives:

                     Controls over rent reasonableness;
                     Controls over housing quality standards;
                     Controls over procurements;
                     Controls over cost allocation;
                     Controls over accounting, specifically interprogram fund transactions;
                     Controls over tenant eligibility, calculating housing assistance payments, and
                      calculating tenant payments;
                     Controls over the Authority’s administrative plan; and
                     Controls over the Housing Choice Voucher program.

               We assessed the relevant controls identified above.

               A deficiency in internal control exists when the design or operation of a control does
               not allow management or employees, in the normal course of performing their
               assigned functions, the reasonable opportunity to prevent, detect, or correct (1)
               impairments to effectiveness or efficiency of operations, (2) misstatements in
               financial or performance information, or (3) violations of laws and regulations on a
               timely basis.




                                                 25
Significant Deficiencies


             Based on our review, we believe that the following items are significant deficiencies:

                   Inadequate controls over rent reasonableness determinations (see finding 1).

                   Inadequate controls over housing quality standards, specifically monitoring
                    the inspection contractor, and no policies or procedures regarding abatement
                    of landlord housing assistance payments (see finding 2).

                   Lacked cost allocation plan and costs not appropriately allocated between
                    Federal and State housing programs (see finding 3).

                   Insufficient compliance with HUD procurement regulations and the
                    Authority’s procurement policy (see finding 4).

                   Lacked accounting controls and policies regarding the use of Federal funds
                    (see finding 5).




                                              26
                                   APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS

                    Recommendation           Ineligible 1/   Unsupported 2/
                        number

                           1B                                    $3,776,931
                           2E                      $11,625
                           3B                     $159,388
                           4A                                       $69,860
                                                  $171,013       $3,846,791


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

2/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of the 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.




                                             27
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




Comment 1




                         28
Ref to OIG Evaluation   Auditee Comments




Comment 1




                         29
Ref to OIG Evaluation   Auditee Comments




Comment 2




                         30
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 3




Comment 4




Comment 5




                         31
Ref to OIG Evaluation   Auditee Comments




Comment 6




Comment 7




Comment 8




                         32
Ref to OIG Evaluation   Auditee Comments




Comment 8


Comment 9


Comment 10




                         33
                         OIG Evaluation of Auditee Comments

Comment 1   The Authority generally agreed with our finding and has initiated corrective
            actions that should correct the cited deficiencies if properly implemented.

Comment 2   The Authority did not generally agree with our finding. The Authority stated they
            created a budget based upon historically use of cost, however, the Authority could
            not provide adequate documentation to support the historical factors used. As
            stated in their response “We can acknowledge that we do not have a means to
            substantiate those allocations. However, the Weymouth Housing Authority is
            amenable if HUD deems this necessary to complete workload time frame study
            and implement salary cost allocation based upon this study.” In addition, our
            report already states that the unit method we used is not the only accepted
            method. For example, the Authority could implement a time card system for
            employees that work on multiple programs, perform a time study, or use any other
            acceptable method to allocate costs based on a casual/beneficial relationship. We
            did not state that their method was flawed because they did not perform a time
            study. We stated that the cost allocation plan used was unacceptable because it
            was not supported by adequate documentation. Furthermore, based on the
            Authority’s Organization Chart, the employees’ job descriptions and process
            interviews of their actual duties performed we determined that the plan did not
            properly assign costs based on the benefits provided to the respective programs.
            This was evident based on examples cited in the report for staff including the (1)
            state leasing specialist, (2) resident services and public housing coordinator, and
            (3) tenant selector and occupancy coordinator.

            The use of historical costs as a basis for continued cost allocations does not
            provide the most accurate and reliable results. For example, the use of historical
            costs would not account for changes in the number of housing choice vouchers
            administered or shifting of duties and responsibilities. Also, the Authority has not
            provided adequate rationale or supporting documentation for its decision not to
            include portability vouchers in its cost allocations. Although port-outs generally
            require less administrative effort such as income recertification and HQS
            inspections, port-ins generally require as much, if not more administrative effort.

            Our audit testing contradicts the Authority’s position that its costs allocations
            were consistent every month. In addition, the Authority’s implication that we
            concluded that the Authority’s allocation method is flawed without time studies is
            not accurate. We are not requiring the Authority to develop a complex cost
            allocation method and perform time studies, although time studies can be useful.
            However, based on inconsistencies and inadequate support for the Authority’s
            cost allocation method, there is a lack of assurance that costs were fairly allocated
            among federal and state housing programs. Therefore, we maintain the position
            that the Authority needs to establish and implement an equitable cost allocation
            plan that provides reasonable assurance that payroll, employee benefit, and




                                             34
            administrative and operating costs are fairly allocated among Federal and State
            housing programs.

Comment 3   The Authority’s statement that it allocated maintenance salary costs based on the
            number of federal units divided by total number of federal and state units (70/475
            = 14.7%), is incorrect. We reviewed the maintenance salary allocations and
            determined that the Authority allocated individual maintenance worker’s salary
            based on the projects and programs served, but not based on the exact number of
            units in those projects/programs the costs to the programs served. We allocated
            the costs based on the exact number of units. For example, if a maintenance
            worker was assigned to the federal projects (70 units), as well as the state elderly
            projects (216 units), a total of 286 (70 + 216 = 286) units, we allocated (70/286 =
            24.48%) of the salary costs to federal programs, whereas, the Authority allocated
            a higher amount. Therefore, we questioned the difference as an ineligible amount
            charged to the federal programs. Our detailed calculations were provided to the
            Authority and will be furnished to HUD program personnel to assist in audit
            resolution.

Comment 4   As stated in the report, since we determined that the Authority overcharged
            federal programs for some salary costs allocated to federal programs then the
            directly associated employee benefits would have also been overcharged based on
            the method the Authority used, but could not support.

Comment 5   The Authority did not provide any evidence that the executive director’s vehicle
            charges were reviewed and approved by HUD. As part of the audit resolution,
            this evidence should be provided and HUD should formally determine whether it
            is adequate. In addition, the Authority’s practice of alternating charging the full
            cost of maintenance vehicles to either the state or federal programs when the
            vehicles are used by all programs is not proper accounting. Since the vehicles are
            not dedicated to a particular project or program the vehicle costs (depreciation and
            operating costs) should be pooled and allocated on a causal beneficial relationship
            such as actual usage, housing units serviced, or other supportable method. It is
            not sufficient to charge the full cost of a vehicle to a program simply because it is
            the program’s turn to buy a vehicle.

Comment 6   Our review of the documentation provided at the exit conference indicates that
            there are still significant deficiencies in the procurements for the fee accountant,
            HQS inspector, and attorney. For example, the fee accountant procurement had
            no independent cost estimate or multiple quotes. Also, the fee accountant’s
            contract was executed several months into the period of performance indicating
            services were being provided without a contract in place.

            Regarding the HQS inspector, there was no enforceable executed contract or
            purchase order in place, merely an offer from the inspector to provide inspection
            services at unit prices per inspection/reinspection. Although the Board minutes
            cite competition from two other inspection companies, the proposals were not



                                              35
             maintained or provided for our review. In addition, based on the poor
             performance of the inspector selected (see finding 2), had a “best value” analysis
             been performed, the Authority may not have selected this inspection company and
             avoided the problems caused by its poor quality.

             The attorney’s procurement documentation is based solely on the Authority Board
             Minutes from 1997 indicting they were to advertise for an attorney and that one
             was hired. No other documentation was provided.

             The documentation provided with the Authority’s response for the procurement of
             the Independent Auditor appears adequate and we will remove this exception
             from the report.

Comment 7    The exemption under the Uniform Procurement ACT G.L.c.30B would not be
             applicable to the Authority’s federally funded contracts. The Authority’s own
             procurement policy, Federal Regulations at 24 CFR 85.36 and HUD Handbook
             7460.8 Rev 2 supersedes the state exemption criteria and must be followed.
             Therefore, our audit recommendations remain unchanged.

Comment 8    The Authority’s response states that “At times the funds are not transferred from
             the program in relationship to the expense allocation and a small over or under
             funding occurs.” This over funding is precisely the condition we are citing that
             is in violation of Federal Appropriation Laws which prohibit the use of HCVP
             funds being used for other than HCVP program expenses. To prevent this
             potential violation the Authority must establish a procedure to closely monitor
             and ensure that HCVP program funds are not used or transferred for other
             programs’ use, not even on a temporary basis.

Comment 9    The Authority states that at the end of 2008 the HCVP was owed (accounts
             receivable) by the revolving account (accounts receivable) and that HUD alerted
             them that this was not appropriate. (We note that the Authority did not provide
             this information to us during our audit.) When we saw this condition in 2008 and
             that the HCVP owed the revolving account (accounts payable) in 2009 we
             inquired as to what procedures the Authority employed to ensure compliance with
             the Federal Appropriation Laws. The Authority did not provide an adequate
             explanation. Therefore, we continue to recommend that a formal procedure be
             established to ensure that the HCVP does not over fund the revolving account
             resulting in future Appropriation Law violations.

Comment 10 We corrected the statements in the finding to show that the HCVP owed the
           revolving account $56,232 in 2009.




                                             36
Appendix C

                    INELIGIBLE COST ALLOCATIONS


                                                                      CY 2011 (Jan. to 
                        CY 2009                 CY 2010                    Mar.) 
    Expense                    Public                  Public                     Public     Expense 
   Categories      HCVP       Housing      HCVP       Housing         HCVP       Housing      Totals  
1.  Employee 
Salaries          ‐$24,256     $96,152     $26,292     $68,012        $7,757     $16,669     $190,626
2.  Employee 
Benefits*            ‐$406      $1,606       $439           $1,136      $130        $278       $3,182
3.  Group Health 
Insurance         ‐$38,278     $15,920    ‐$32,017     $15,670       ‐$10,899     $4,654     ‐$44,950
4.  Retirement 
to Town of 
Weymouth          ‐$19,179      $9,985    ‐$14,334          $7,371   ‐$13,643     $7,079     ‐$22,721
 5.  Authority 
Vehicles                $0          $0         $0      $39,365             $0          $0     $39,365
6. Other
Administrative
Cost              ‐$13,596      $8,565     ‐$8,379          $7,449    ‐$1,376     $1,223      ‐$6,114
   Program
 Total by Year    $95,715  $132,228       ‐$27,999   $139,003        $18,031  $29,903  $159,388

*Employee Benefits include health insurance tax, unemployment insurance, and Medicare.




                                               37