oversight

The Housing Authority of the City of Victoria, TX, Allowed Improper and Unsupported Payments

Published by the Department of Housing and Urban Development, Office of Inspector General on 2015-09-02.

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

                                               U.S. DEPARTMENT OF
                               HOUSING AND URBAN DEVELOPMENT
                                        OFFICE OF INSPECTOR GENERAL




                                            September 2, 2015
                                                                                              MEMORANDUM NO:
                                                                                                   2015-FW-1005


Memorandum
TO:           David G. Pohler
              Director, San Antonio Office of Public Housing, 6JPH

              //signed//
FROM:         Gerald R. Kirkland
              Regional Inspector General for Audit, 6AGA

SUBJECT:      The Housing Authority of the City of Victoria, TX, Allowed Improper and
              Unsupported Payments


                                           INTRODUCTION

In accordance with our regional plan to review public housing programs and as part of our
overall risk strategy, we reviewed the Housing Authority of the City of Victoria, TX. Our
objective was to determine whether the Authority operated its public housing and related grant
programs in accordance with the U.S. Department of Housing and Urban Development’s (HUD)
requirements. However, we limited our review to determining whether the Authority (1)
properly collected, deposited, and recorded its low-rent rental receipts; (2) made additional or
improper payroll payments; and (3) had adequate controls over its credit cards. We also
reviewed board oversight and expanded our testing to cover other high-risk disbursements and
the Authority’s fixed assets inventory.

HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.

                                METHODOLOGY AND SCOPE

We conducted our work at the Authority’s administrative offices in Victoria, TX, and the Office
of Inspector General’s (OIG) offices in Houston, San Antonio, and Fort Worth, TX, between
October 27, 2014, and May 14, 2015. The review generally covered the period January 1, 2013,
to March 31, 2014. We expanded the scope as necessary to accomplish our objective.


                                               Office of Audit (Region 6)
                                819 Taylor Street, Suite 13A09, Fort Worth, TX 76102
                                      Phone (817) 978-9309, Fax (817) 978-9316
                          Visit the Office of Inspector General Web site at www.hudoig.gov.
To accomplish our objective, we reviewed the Authority’s

   •   Policies and available board minutes from December 2010 to September 2014.
   •   Electronic fiscal year general ledgers from January 1 to December 31, 2013, and vendor
       cash disbursements data from January 1, 2013, to March 31, 2014. We determined that
       the electronic data were sufficiently reliable to meet our review objectives. However, the
       vendor check listing provided by the Authority contained duplicates and did not contain
       all checks that cleared the Authority’s bank statements.
   •   Vendor check register from January 1 to December 31, 2013. We selected a
       nonstatistical sample of 43 checks for review from 1,441 in the register. We selected the
       checks based on various risk factors.
   •   Rent register for June 2013 and compared it to June’s rent receipts. We randomly
       selected the month of June 2013 from the 15 months in our audit scope. We reconciled
       June’s rent collections and deposits and skimmed both receipts and deposits for
       questionable transactions.
   •   Bank statements from February 1 through December 31, 2013.
   •   Payroll records for the chief financial officer from January 13, 2004, through March 26,
       2014. We selected 100 percent of the checks written to the chief financial officer for
       review.
   •   Payroll records from January 1, 2013, through December 31, 2014, for 9 of 22
       employees, which were selected based on various risk factors.
   •   Vacation leave records for the chief financial officer from January 27, 2003, to January 8,
       2014.
   •   Vacation leave records for all employees who sold back leave from calendar year 2009
       through 2014.
   •   Office equipment inventory for calendar years 2011 and 2012.
   •   Maintenance inventory for calendar year 2014.
   •   Travel, credit cards, and other payments made to the executive director and staff for the
       review period.
   •   Financial statements for fiscal years 2009, 2010, 2012, 2013, and 2014 for background
       information and findings relevant to our review objectives.

We also

   •   Interviewed HUD’s Office of Public Housing staff, Authority staff, board members, and
       the Authority’s independent public accountant.
   •   Obtained the Authority’s HUD public housing program funding information for the fiscal
       year ended March 31, 2014. We did not test the reliability of this information as we used
       it for background purposes only.
   •   Reviewed and obtained an understanding of relevant laws, regulations, and HUD’s
       guidance.




                                                2
                                               BACKGROUND

The Authority was organized as a public corporation under the laws of the State of Texas to
provide housing for qualified individuals. A five-member board of commissioners, who are
appointed and can be removed by the mayor of Victoria, governs the Authority. The board is
responsible for establishing operating policies and overseeing the executive director, who
manages the Authority’s day-to-day operations. The Authority has 18 full-time and 4 part-time
employees, including the executive director, public housing project manager, housing choice
voucher director, and a maintenance supervisor.

The Authority owns and manages 321 low-rent public housing units and administers 347 housing
choice vouchers from HUD. HUD provided operating subsidies and Public Housing Capital
Fund program funds to the Authority to manage, maintain, operate, and improve its public
housing developments. HUD also provided the Authority Housing Choice Voucher program
administrative fees and housing assistance payments. In addition, the Authority received rental
income from its tenants. The Authority’s fiscal year is from April 1 to March 31; however,
HUD’s fiscal year is from October 1 to September 30. Table 1 details funding that HUD
provided to the Authority.

       Table 1: HUD’s reported funding for the Authority.
              HUD program         Fiscal year 2012 Fiscal year 2013                              Total
      Low-rent operating subsidy     $ 1,222,488        $ 1,047,834                           $ 2,270,322
      Housing choice vouchers          1,665,143          1,671,462                             3,336,605
      Capital Fund program grants        374,864            368,342                               743,206
      Total                          $ 3,262,495        $ 3,087,638                           $ 6,350,133

                                          RESULTS OF REVIEW

Limited testing showed the Authority properly collected, deposited, and recorded its low-rent
rental receipts. However, it allowed improper and unsupported payments for salaries, wages,
leave, credit cards, and other items. It also permitted employee salary advances and failed to
track their repayment. Additionally, it did not properly maintain or reconcile its fixed assets
inventory. These issues occurred because the Authority’s management did not provide adequate
oversight. As a result, the Authority paid questioned costs totaling $782,333. Further, if it takes
corrective action, it will put $33,557 to better use.

The Authority’s Chief Financial Officer Improperly Paid Herself
The Authority’s chief financial officer improperly paid herself using additional checks that she
was not entitled to receive in violation of HUD’s financial management standards, Federal cost
principles, and the Authority’s timekeeping policies. 1 The checks consisted of 156 additional


1
    24 CFR (Code of Federal Regulations) 85.20(b)(3), (b)(5), and (b)(6); 2 CFR Part 225, appendix A, C. Basic
    Guidelines, 1.a., 1.e., and 1.j.; and the Authority’s Personnel Policy, Section 4.7, Timekeeping, and Section 8.1,
    Vacation

                                                          3
salary checks and 1 vendor payment for a personal expense. 2 According to the executive
director, the chief financial officer improperly took some funds, but some of the additional
checks consisted of payments for accumulated and unused vacation leave. However, the
executive director admitted no one had tracked the chief financial officer’s leave balance. Our
review showed that from January 13, 2004, to March 31, 2014, the chief financial officer paid
herself for a total 9,244 hours in unused vacation leave when she had only 1,641 hours available.
Further, the Authority created a 160-hour maximum leave payout limit in 2011; 3 however, as
shown in the following chart, the chief financial officer significantly exceeded the limit from
2011 through 2013.


                         Analysis of chief financial officer's leave
            3,000

            2,500
                                                                                       Leave hours
            2,000
                                                                                       paid
    Hours




            1,500
                                                                                       Leave hours
                                                                                       available
            1,000

             500                                                                       Maximum
                                                                                       hours per
               -                                                                       policy
                    2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
                                              Calendar year



The improper additional payments occurred because the chief financial officer issued additional
checks to herself. The ineligible payments went undetected because the executive director did
not properly supervise the chief financial officer and failed to take sufficient action to correct a
2009 audit finding concerning unsupported vacation leave balances, leave requests, and leave
payments. For example, the executive director did not implement administrative policies for
leave requests and leave balances, did not start tracking the chief financial officer’s accrued
vacation leave balance, and did not approve the chief financial officer’s requests for paid
vacation. The executive director also could not provide the chief financial officer’s personnel
folder and leave slips. Further, a board member admitted that he did not follow up on the leave
buy-back issue. Instead, the board and executive director relied on the independent public
accountant to monitor this issue.

In addition, the executive director provided the chief financial officer and two other Authority
employees signed blank checks, which allowed the chief financial officer to issue the checks to
herself undetected. The accounts payable clerk stated that she notified the executive director that
2
      See appendix D for a listing of the checks.
3
      The Authority’s Personnel Policy, Section 8.1, Vacation

                                                          4
the chief financial officer had asked several times for a few of her presigned checks. Rather than
investigate, the executive director sent the clerk back to the chief financial officer.

As a result, the chief financial officer improperly used HUD’s low-rent funds to pay herself
$322,331 in additional checks, consisting of $320,031 in ineligible vacation pay, which equaled
more than 3.5 years of hourly wages, and $2,300 for an ineligible personal expense. The
Authority terminated the chief financial officer’s employment in March 2014 after uncovering
extra payments.

The Authority Overpaid Some Employees and Could Not Support Wages Paid to Other
Employees
In violation of its policy and Federal requirements, 4 the Authority overpaid some employees and
could not support wages paid to other employees as they did not properly use the two time
clocks. The Authority paid

    •   Four administrative employees wages for an 8-hour day, but their time cards did not
        show that they worked an 8-hour day.
    •   Four administrative and five maintenance employees wages for a total of 181 days,
        although these employees did not both clock in and clock out and they failed to submit a
        leave request.
    •   Five maintenance employees a full day’s wages for 688 days, although these employees
        clocked in and did not clock out or clocked out and did not clock in.

These issues occurred because Authority management did not establish a tone of ethics for time
and attendance. Before March 2014, the chief financial officer did not properly supervise the
Authority’s employees as she failed to review their time cards and leave requests. After
terminating the chief financial officer’s employment, the executive director assumed payroll
responsibilities, but she did not properly supervise the employees, including reviewing their time
cards, and failed to create administrative controls. As a result, the Authority paid $250,192 in
questionable employee wages, which consisted of

    •   Overpayments to administrative employees for 1,796 hours totaling $29,641 for time
        during which the employees did not work.
    •   Unsupported wages to administrative and maintenance employees for 181 days totaling
        $39,859 for days on which the employees did not properly clock in and out.
    •   Unsupported wages to maintenance employees for 688 days totaling $180,692 for days
        on which the employees did not properly clock in and out.




4
    24 CFR 85.20(b)(3), (b)(5), and (b)(6); and the Authority’s Personnel Policy, Section 4.6, Work Hours; Section
    4.7, Timekeeping; and Section 8.1, Vacation

                                                        5
The Authority Could Not Support Unused Vacation Leave Payments
The Authority could not support 1,906 hours in unused vacation leave it paid to 7 of its 24 5
employees in violation of its policy and Federal cost principles. 6 It also did not maintain
accurate balances for its employees’ earned leave, used leave, and current leave balances.
Further, the Authority paid one employee for 192 hours of unused vacation leave in 1 year when
its policy limited payment to a maximum of 160 hours. The unsupported payments occurred
because the chief financial officer and executive director failed to implement a method to accrue,
track, and validate employees’ leave balances before making a payment. As a result, the
Authority paid unsupported vacation leave totaling $50,282 to seven employees and ineligible
vacation leave totaling $1,141 to one employee whose payment exceeded the limit.

The Authority Improperly Used HUD Funds To Pay Employees Working on Nonprofit
Activities
The Authority used HUD funds to pay its administrative and maintenance employees when they
worked on its affiliated nonprofit’s activities in violation of Federal requirements. 7

    •   Administrative employees received both a monthly check from the nonprofit and a salary
        from HUD funds. The additional check from the nonprofit was to pay the employees for
        performing nonprofit activities. However, the Authority could not show that the
        employees worked additional hours at the nonprofit.
    •   The Authority improperly used HUD funds to pay the wages of maintenance employees
        who completed nonprofit work orders.

The executive director stated employees worked on nonprofit activities only after their regular
work shift at the Authority. Further, she was not aware that maintenance employees worked at
the nonprofit. However, administrative and maintenance employees admitted to working on
nonprofit activities during regular Authority business hours. As a result, the Authority
improperly used $14,561 in HUD funds to pay the wages of three administrative employees who
worked on nonprofit activities. A fourth administrative employee worked on nonprofit activities,
and the Authority used only HUD funds to pay her wages. In addition, the Authority improperly
used $10,102 in HUD funds to pay three maintenance employees to complete nonprofit work
orders.

The Authority Paid and Failed To Track Advances to Employees
The Authority paid eight employees advances against future paychecks. It also did not track the
outstanding advance balances and allowed at least two employees to carry a balance, which was
not a prudent or reasonable use of its Federal funds. 8 The issues with pay advances occurred
because the chief financial officer and the executive director did not have a policy or method for
overseeing payroll advances. The Authority made $13,000 in pay advances to employees from
January 2013 to March 2014. The employees paid $11,775 of the advances back. However, as

5
    The chief financial officer is not included in the employees as we questioned her leave separately in this
    memorandum.
6
    See footnote 3.
7
    2 CFR Part 225, appendix A, C. Basic Guidelines, 1.a., 1.e., 1.j., and 3.a.
8
    2 CFR Part 225, appendix A, C. Basic Guidelines, 1.a., 1.e., 1.j., 2.a., and 2.d.

                                                          6
of December 2014, one employee, who earned a gross amount of $1,150 per pay period, owed
the Authority $1,300 for previously issued advances.

The Authority Could Not Support Its Fixed Assets Inventory Total
Contrary to Federal requirements, 9 the Authority did not properly maintain or reconcile its fixed
assets inventory. The Authority’s records and financial statements reflected three different
amounts for its furniture and equipment. These amounts should agree or reconcile (see table 2).

Table 2: Comparison of 2014 inventory account amounts
                          Audited financial        Depreciation                                  Physical
  Account description     statement amount       schedule amount                             inventory amount
 Fixed assets - furniture
 and equipment                      $278,043              $82,106                                      $173,489

In addition, the Authority did not maintain an inventory showing equipment make, model, and
serial number for identification purposes. These issues occurred because the executive director
lacked knowledge about the Authority’s inventory. Instead, she relied on the Authority’s
independent public accountant to answer inventory questions. The independent public
accountant admitted the amounts should “theoretically” match. When shown the significant
differences between the balances, the executive director stated that she believed the fixed asset
inventory amount was overstated. Since the amounts did not reconcile, the Authority’s financial
statements contained a misstatement for fixed assets. Further, the Authority’s assets may have
been overstated between $104,554 and $195,937, which would require a corresponding reduction
to reserves to correct the balances.

The Authority Lacked Support for Checks
In violation of Federal requirements, 10 the Authority lacked supporting documentation for 13 of
the 43 checks reviewed. It lacked support because the executive director did not establish policy
or procedures requiring invoices or other support for checks. As a result, the Authority could not
support payments totaling $23,574. 11

The Authority Improperly Used Its Credit Cards
Contrary to Federal requirements, 12 the Authority improperly used its credit cards to pay for
tenant parties, late fees, interest, and other ineligible costs. It also lacked receipts for some credit
card purchases. The improper and unsupported charges occurred because the executive director
and staff did not follow the Authority’s policy. Further, the executive director failed to ensure
that employees supported and made only eligible credit card purchases. The Authority made
ineligible payments for credit card charges totaling $2,319 and could not support additional
purchases totaling $1,977.


9
     2 CFR Part 225, appendix B, paragraph 15.a.(2) and 2 CFR Part 85.32(d)(1) through (d)(4)
10
     2 CFR 85.20(b)(6)
11
     See appendix E for a listing of the 13 checks.
12
     2 CFR Part 225, appendix A, A. Policy and Guides, 2.a.(1); appendix A, C. Basic Guidelines, 1.a., 1.b., 2.a.,
     and 2.d.; and appendix B, paragraphs 14, 16, and 23.a.

                                                         7
                                               CONCLUSION

The Authority allowed improper and unsupported payments for salaries, wages, leave payments,
credit cards, and other items. It also did not properly maintain or reconcile its fixed assets
inventory. These issues occurred because Authority management did not provide adequate
oversight. As a result, the Authority paid questioned costs totaling $782,333. The Authority will
have to support or repay these costs, which will have a negative effect on its finances. Further, if
the Authority takes corrective action to implement this memorandum’s recommendations, it will
put $33,557 to better use.
                                     RECOMMENDATIONS

We recommend that the Director, Office of Public Housing, San Antonio, TX, require the Authority
to

1A.       Submit proof of repayment of $322,331 to its low-rent operating subsidy account program
          from non-Federal funds for the ineligible payments to the chief financial officer.

1B.       Review and update its ethics policy, including requiring training for management and all
          employees.

1C.       Adopt and follow policies and procedures for the administration of leave; timekeeping,
          including properly allocating costs among programs; payroll; pay advances; accounts
          payable, including credit cards, check issuance, and support for eligible costs; and the
          reconciliation of fixed assets. Implementing this recommendation should reduce the risk of
          paying additional improper wages, advances, and accrued leave payments over the next
          12 months totaling $33,557. 13

1D.       Repay $29,641 from non-Federal funds for salary payments to administrative employees
          whose time cards showed they did not work an 8-hour day. The Authority needs to repay
          $29,160 to its operating subsidy account and $480 to its Housing Choice Voucher program.

1E.       Support or repay $220,551 from non-Federal funds for unsupported administrative and
          maintenance employees wages. 14 The Authority needs to repay $71,896 to its low-rent
          operating subsidy account, $148,523 to its Capital Fund program account, and $132 to its
          Housing Choice Voucher program.

1F.       Support or repay $50,282 from non-Federal funds for unsupported accrued leave
          payments to seven employees. The Authority needs to repay $23,235 to its low-rent
          operating subsidy account, $2,754 to its Housing Choice Voucher program, and $24,293 to
          its Capital Fund program.


13
      This amount consisted of ineligible amounts in recommendations 1D, 1H, 1I, 1J, and 1M, calculated to a
      monthly amount and projected over a 12-month period.
14
      These amounts included $39,859 for 181 days on which administrative and maintenance employees did not
      clock in and out and $180,692 for 688 days for maintenance employees who did not clock in and out.

                                                        8
1G.       Repay $1,141 from non-Federal funds to its Capital Fund program for ineligible accrued
          leave paid to one employee in excess of its annual limit.

1H.       Repay $24,663 from non-Federal funds for time the employees spent working on
          nonprofit activities. 15 The Authority needs to repay $24,279 to its low-rent operating
          subsidy account and $384 to its Housing Choice Voucher program.

1I.       Repay $1,300 from non-Federal funds to its low-rent operating subsidy account for
          outstanding unpaid advances owed by one employee.

1J.       Reconcile its fixed assets inventory amount, which was overstated by at least $104,554.

1K.       Support or repay $23,574 for 13 unsupported checks totaling $23,574. If it cannot
          provide support and the payments were from Federal funds, or if it cannot determine the
          source of funds, it should repay its appropriate public housing program from non-Federal
          funds. Further, if any of the funds were from its capital fund grants that were not
          obligated or expended in accordance with the grant terms for timely obligation and
          expenditure, it should repay HUD.

1L.       Repay from non-Federal funds $2,319 to its low-rent operating subsidy account for
          ineligible credit cards charges.

1M.       Support or repay from non-Federal funds $1,977 to its low-rent operating subsidy
          account for unsupported credit card charges.




15
      This amount included $14,561 in wages paid to administrative employees and $10,102 in wages paid to
      maintenance employees performing nonprofit work orders.

                                                        9
                                       APPENDIXES

Appendix A

SCHEDULE OF QUESTIONED COSTS AND FUNDS TO BE PUT
                 TO BETTER USE

            Recommendation           Ineligible 1/    Unsupported 2/     Funds to be put
                number                                                   to better use 3/
               1A                      $ 322,331
               1C                                                              $ 33,557
               1D                          29,641
               1E                                          $ 220,551
               1F                                             50,282
               1G                           1,141
               1H                          24,663
                1I                          1,300
                1J                                           104,554
               1K                                             23,574
               1L                           2,319
               1M                                               1,977

              Totals                   $ 381,395           $ 400,938           $ 33,557


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.

3/ Recommendations that funds be put to better use are estimates of amounts that could be used
   more efficiently if an OIG recommendation is implemented. These amounts include
   reductions in outlays, deobligation of funds, withdrawal of interest, costs not incurred by
   implementing recommended improvements, avoidance of unnecessary expenditures noted in
   preaward reviews, and any other savings that are specifically identified. In this instance, if
   the Authority implements recommendation 1C, it will avoid paying additional ineligible
   amounts over the next 12 months.

                                                 10
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation                                                                                Auditee Comments

                                                   Housing Authority of the City of Victoria, Texas
                                                                                   Better Housing Today…Better Citizens Tomorrow”
                       SECTION 8 LEASED HOUSING PROGRAM                                                                4001N. HALSEY STREET                                                       PUBLIC HOUSING PROGRAM
                             TELEPHONE (361) 575-5581                                                                  VICTORIA, TEXAS 77901                                                       TELEPHONE (361) 575-3682
                                 FAX (361) 580-3615                                                                   TTY Number 1-800-735-2989                                                       FAX (361) 580-3615

                            The Victoria Housing Authority is an equal opportunity provider and employer and does not discriminate against persons with disabilities
                                                                                                             AUDITEE COMMENTS

Comment 1       The Authority’s Chief Financial Officer Improperly Paid Herself.
                The Victoria Housing Authority has already replaced $195,734.64 of the $322,331.00 due of which the Chief
                Financial Officer improperly paid herself. The initial finding by the auditor on the fact that the Chief
                Financial Officer had paid herself a sum of unused vacation time was reported to the Chief Financial Officer
                in November, 2010 for the audit period ending 3-31-10. The Chief Financial Officer then brought it to the
                attention of the Executive Director. The Executive Director then instructed the Chief Financial Officer to
                provide proof of support for the unused vacation hours she had in fact paid herself. The Chief Financial
                Officer produced a spreadsheet showing the hours she had accrued on the books. The Executive Director
                held a board meeting on December 15, 2010, so that the Chief Financial Officer could discuss the issue with
                the board and show them the proof. The Chief Financial Officer explained to the board about the finding
                and each board member in attendance signed the spreadsheet that was presented. The Executive Director
                then amended the Personnel Policy to state than an employee could not buy out more than 160 hours of
                unused vacation time within a calendar year, and the board approved the policy change which was effective
                on January 1, 2011. The Chief Financial Officer was aware of this policy change. After discovering what the
                Chief Financial Officer did in 2014, the Executive Director amended the Personnel Policy again and the
                policy change stated that no employee can buy out any unused vacation time during their employment, and
                this change took effect on November 5, 2014. There were three more audits performed after the incident
                reported in November, 2010 and there were no findings that pertained to the issue of the Chief Financial
                Officer overpaying herself for unused vacation time. The Executive Director discovered the issue in January,
                2014 when she ran a salary history report to fill out a HUD required form. The form done in 2011 was for
                2010 wages and there was not another one of these HUD forms requested until January, 2014. On the issue
                of signing blank checks, the previous Executive Director of 19 years had signed blank checks, therefore, the
                current Executive Director did not see that it was a problem, as the checks required two signatures to make
                it a valid check. The Executive Director also knew that there are other Housing Authorities that use
                signature machines to put signatures on their checks, which means the individual whose signature is on the
                check was not done in person. The Chief Financial Officer had worked for the Housing Authority in the
                finance department since 1978 and there had not been any previous problems with dishonesty on her part
                that had been detected. The Housing Authority has also hired a very qualified Deputy Executive Director to
                assist the current Executive Director in monitoring staff, and all program functions and financials. The new
                Deputy Executive Director has been an Executive Director in the past and has over 20 years of experience
                working in the Housing Authority field. The Housing Authority also hired a fee accountant to do all
                financials for the Housing Authority and to do all payroll for the Housing Authority. The fee accountant uses
                the same software that the Housing Authority uses to do the financials each month, therefore, the fee
                accountant actually takes control of a computer in the Housing Authority office and processes the actual
                financial records that have taken place in the computer system. The Housing Authority had used the same
                auditor for a number of years based on cost when going out with a Request For Proposal. For audit period
                ending 3-31-15, the Housing Authority will be audited by a firm that is very experienced in this field and that
                has never audited us before. All checks for the Housing Authority are and will be signed by either the
                Executive Director or the Deputy Executive Director with the second signature required being a
                Commissioner.
              In accordance with the Federal Fair Housing Law (the Fair Housing Amendments Act of 1988) it is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status or national origin. To file a
              complaint of discrimination, write US Department of Housing and Urban Development, Assistant Secretary for Fair Housing and Equal Opportunity, Washington, DC, 20410 or call toll free,
                                                                                                       1 (800) 669-9777 (Voice), 1 800-720-6382 (TDD)




                                                                                                            11
Ref to OIG Evaluation                                                                                Auditee Comments

                                                   Housing Authority of the City of Victoria, Texas
                                                                                   Better Housing Today…Better Citizens Tomorrow”
                       SECTION 8 LEASED HOUSING PROGRAM                                                                4001N. HALSEY STREET                                                       PUBLIC HOUSING PROGRAM
                             TELEPHONE (361) 575-5581                                                                  VICTORIA, TEXAS 77901                                                       TELEPHONE (361) 575-3682
                                 FAX (361) 580-3615                                                                   TTY Number 1-800-735-2989                                                       FAX (361) 580-3615

                            The Victoria Housing Authority is an equal opportunity provider and employer and does not discriminate against persons with disabilities


              The Authority Overpaid Some Employees and Could not Support Wages Paid to Other Employees.

Comment 2     With the Maintenance staff, there are times they clock in and do not clock out, or do not clock in but clock
              out. The reason for this is that if they are at a unit or on the grounds doing a repair, for example a sewer, they
              do not stop what they are doing to go back to the office and punch out. The maintenance staff keep a
              written time sheet for any hours worked after their regular work day. The timesheet states what time they
              start the job and what time they finish. The times, dates and work done which is recorded on the written
              time sheet is verified by the Supervisor in the Maintenance Department and turned into the Executive
              Director before payroll is processed. In January, 2014, the Executive Director instructed the Financial
              Assistant to start going through everyone’s time cards and leave request sheets to verify what time had not
              been accounted for. This has been done and any time not accounted for on the time cards has been
              deducted from accrued leave and brought up to date. There were two employees that the Executive Director
              knew were short on accrued leave and the Executive Director went through their time cards each pay period
              and deducted any time not worked during that pay period from their paychecks. The Financial Assistant was
Comment 3     instructed to go over the other employee time cards to ensure that all time had been accounted for and to
              ensure that any time not accounted for is backed up with the proper leave sheet, each pay period. The
              Financial Assistant has been instructed to inform the Executive Director of any staff person that is running
              short on accrued leave so that their time not worked can also be deducted from their paycheck each pay
              period. The Executive Director has given written instructions on the requirements of timekeeping and the
              steps expected as far as punching in and out to the Maintenance Staff who work out of a different site than
              the main office, and requested that the Supervisors go over the written instructions and have each staff
              person sign the written directive, as well as a copy of the written directive posted by the time clock. The
              written directive explains that failure to comply with timekeeping policy will result in disciplinary actions. The
              Financial Assistant has been given instructions to report to the Executive Director any staff that are not
              following the policy of timekeeping according to the Personnel Policy and the directive distributed so that the
              employee can be disciplined.

              The Authority Could Not Support Unused Vacation Leave Payments.

              The Executive Director ran an employee history report on all employees and verified any unused vacation
Comment 4     leave payments they received and shared this information with the Financial Assistant. Therefore, when the
              Financial Assistant was updating all accrued leave balances, the unused vacation payments were deducted
              from the accrued leave balances accordingly. The one employee that received 192 hours of unused vacation
              pay did exceed the limit by 32 hours for that calendar year, therefore, the $1,141.00 is owed back from Non-
              HUD Funds.

              The Authority Paid and Failed To Track Advances to Employees.

Comment 5     Upon receiving the draft of the Audit Report, the Executive Director ran a report to show any pay advances
              that were disbursed between January, 2013 and March, 2014. The research shown by the Executive Director,
              does show that all pay advances were paid back to the Housing Authority by June 13, 2014


              The Authority Could Not Support Its Fixed Assets Inventory Total

              The new Deputy Executive Director has been verifying the Fixed Assets Inventory and is correcting any errors
Comment 6     made, therefore this has been corrected. The current Fixed Assets Inventory total was understated on the
              financials. The Deputy Executive Director is also working with maintenance to get all inventory put into the
              computer system so that tracking is done showing what is coming in and what is going out.
              In accordance with the Federal Fair Housing Law (the Fair Housing Amendments Act of 1988) it is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status or national origin. To file a
              complaint of discrimination, write US Department of Housing and Urban Development, Assistant Secretary for Fair Housing and Equal Opportunity, Washington, DC, 20410 or call toll free,
                                                                                                       1 (800) 669-9777 (Voice), 1 800-720-6382 (TDD)




                                                                                                            12
Ref to OIG Evaluation                                                                                Auditee Comments

                                                   Housing Authority of the City of Victoria, Texas
                                                                                   Better Housing Today…Better Citizens Tomorrow”
                       SECTION 8 LEASED HOUSING PROGRAM                                                                4001N. HALSEY STREET                                                       PUBLIC HOUSING PROGRAM
                             TELEPHONE (361) 575-5581                                                                  VICTORIA, TEXAS 77901                                                       TELEPHONE (361) 575-3682
                                 FAX (361) 580-3615                                                                   TTY Number 1-800-735-2989                                                       FAX (361) 580-3615

                            The Victoria Housing Authority is an equal opportunity provider and employer and does not discriminate against persons with disabilities


              The Authority Lacked Support for Checks.

Comment 7     The Housing Authority was able to provide support for 38 out of the 43 checks audited. The Housing
              Authority can explain what the payment was for, but the receipt for the payment was not attached to the
              check and could not be located.

              The Authority Improperly Used Its Credit Cards.

              The Housing Authority was able to locate some of the missing receipts that were to be attached to the credit
Comment 8     card statement. There was some transactions missing purchase orders even though the receipt was
              attached. Prior there were three employees that had a company credit card, and now all the credit cards are
              held in the Executive Director’s or the Deputy Executive Director’s office and an employee must ask for a
              credit card prior to usage. If an employee comes and asks to use the Executive Director’s credit card for a
              purchase from a vendor that we do not have a charge account with, the Executive Director instructs them to
              get a purchase order first, and to turn the receipt into accounts payable along with the purchase order to
              ensure that the proper procedure is being followed. The Executive Director also checks with the Accounts
              Payable Department to ensure that this procedure has been done.




              In accordance with the Federal Fair Housing Law (the Fair Housing Amendments Act of 1988) it is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status or national origin. To file a
              complaint of discrimination, write US Department of Housing and Urban Development, Assistant Secretary for Fair Housing and Equal Opportunity, Washington, DC, 20410 or call toll free,
                                                                                                       1 (800) 669-9777 (Voice), 1 800-720-6382 (TDD)




                                                                                                            13
                         OIG Evaluation of Auditee Comments

Comment 1   The Authority indicated it had replaced some of the funds taken by the chief
            financial officer. It said it took action in 2010 when the chief financial officer
            told the executive director that its auditor had an issue with the chief financial
            officer paying herself for unused vacation. It stated the executive director
            instructed the chief financial officer to support her leave balances, and chief
            financial officer’s information was provided to the board for approval. The
            Authority also amended its personnel policy in December 2010 to limit the
            amount of leave buy out to 160 hours in a calendar year and stated that three later
            audits did not have a finding concerning this issue. It further stated it did not see
            that signing blank checks was a problem because checks required two signatures.
            The Authority indicated it has taken other actions to prevent problems.

            The Authority will need to work with San Antonio Office of Public Housing to
            show that it has properly repaid its various HUD funded accounts for the entire
            amount that the chief financial officer improperly paid herself. We disagree that
            the Authority took sufficient action in 2010 as neither the executive director nor
            the board researched or verified the leave balance information provided by the
            chief financial officer. In addition, the executive director and the board did not
            take action to ensure that the chief financial officer’s leave payments followed the
            new 160 hour maximum as the chief financial officer paid herself for 1,761 hours
            in 2010, 1,291 hours in 2011, 628 hours in 2012, and 2,979 hours in 2013. The
            executive director’s signing of blank checks was an internal control weakness as
            the chief financial officer could sign as the second signature.

Comment 2   The Authority indicated there may be times when maintenance staff did not
            properly clock in or out because the employees were performing repairs.
            Although its statement concerning its maintenance employees appears reasonable,
            this practice conflicted with its existing policy, which required all employees to
            clock in and out. In addition, its Capital Fund program maintenance office
            assistant clocked in and did not clock out or clocked out and did not clock in for a
            total of 117 days; we question whether this individual performed repairs.

Comment 3   The Authority indicated it had reviewed all time cards and deducted any
            unaccounted time from employees’ accrued leave balances. We question whether
            adjusting the leave balances of four administrative employees, who received
            payment for 1,796 hours of time that they did not work, is prudent and supported.
            For one administrative employee, she did not have a sufficient leave balance as
            her personnel file contained a note that she only had 13 hours of accrued annual
            leave on May 12, 2014. However, our testing showed the Authority paid her for
            652 hours that she had not worked and for an additional 192 hours for days where
            she did not clock in and clock out. The Authority will need to provide the
            corrected leave balances and supporting information to the San Antonio Office of
            Public Housing.


                                             14
Comment 4   The Authority said it had updated all employees’ leave balances. It also said it
            would repay from non HUD funds $1,141 paid to an employee for 32 hours in
            excess of the vacation buy back limit. The Authority will need to provide support
            to the San Antonio Office of Public Housing for its confirmation that the
            Authority took appropriate action concerning its employees’ leave balances.

Comment 5   The Authority indicated that all pay advances had been repaid. At the exit
            conference, it indicated that one pay advance had been improperly recorded three
            times in its financial records. We disagree that the Authority has fully corrected
            the issue as our work still showed a difference in the amount advanced and repaid.
            In addition, the Authority will need to reverse the multiple postings made to its
            general ledger for the improperly recorded check. The Authority will need to
            work with the San Antonio Office of Public Housing to show that it fully paid
            back the advances and reversed the multiple check entries in its financial records.

Comment 6   The Authority stated its fixed assets total was understated and this issue had been
            corrected. We disagree the Authority has corrected the issue. The Authority will
            need to provide the San Antonio Office of Public Housing documentation and
            general ledger adjusting entries to support its various fixed asset account balances.

Comment 7   The Authority said it provided support for 38 out of 43 checks. For the others, it
            could not locate a receipt. As the Authority provided the information after our
            field work and because some additional information needs to be obtained, the
            Authority needs to work with the San Antonio Office of Public Housing to ensure
            that it can properly support these checks. Additionally, it only provided support
            for 37 checks.

Comment 8   The Authority said it located some missing credit card receipts. It has also
            restricted access to the credit cards, and it detailed new procedures for credit card
            use. We acknowledge the Authority’s actions. However, the Authority must
            provide the receipts to the San Antonio Office of Public Housing who will
            determine if those charges are supported. The Authority must repay any other
            unsupported or ineligible charges. Its board also needs to create and adopt new
            policies governing credit card usage.




                                             15
Appendix C

                                        CRITERIA

2 CFR Part 225
Cost Principles for State, Local, and Indian Tribal Governments (OMB [Office of
Management and Budget] Circular A–87)

Appendix A to Part 225—General Principles for Determining Allowable Costs
A. Purpose and Scope…
   2. Policy guides.
      a. The application of these principles is based on the fundamental premises that:
          (1) Governmental units are responsible for the efficient and effective administration
               of Federal awards through the application of sound management practices…

C. Basic Guidelines
   1. Factors affecting allowability of costs. To be allowable under Federal awards, costs must
      meet the following general criteria:
      a. Be necessary and reasonable for proper and efficient performance and administration
         of Federal awards.
      b. Be allocable to Federal awards under the provisions of 2 CFR part 225.
      c. Be authorized or not prohibited under State or local laws or regulations…
      j. Be adequately documented.
   2. Reasonable costs. A cost is reasonable if, in its nature and amount, it does not exceed that
      which would be incurred by a prudent person under the circumstances prevailing at the
      time the decision was made to incur the cost. The question of reasonableness is
      particularly important when governmental units or components are predominately
      federally-funded. In determining reasonableness of a given cost, consideration shall be
      given to:
      a. Whether the cost is of a type generally recognized as ordinary and necessary for the
          operation of the governmental unit or the performance of the Federal award…
      d. Whether the individuals concerned acted with prudence in the circumstances
          considering their responsibilities to the governmental unit, its employees, the public
          at large, and the Federal Government.

Appendix B to Part 225—Selected Items of Cost
14. Entertainment. Costs of entertainment, including amusement, diversion, and social activities
    and any costs directly associated with such costs (such as tickets to shows or sports events,
    meals, lodging, rentals, transportation, and gratuities) are unallowable…
16. Fines and penalties. Fines, penalties, damages, and other settlements resulting from
    violations (or alleged violations) of, or failure of the governmental unit to comply with,
   Federal, State, local, or Indian tribal laws and regulations are unallowable except when
   incurred as a result of compliance with specific provisions of the Federal award or written
    instructions by the awarding agency authorizing in advance such payments…

                                               16
23. Interest.
    a. Costs incurred for interest on borrowed capital or the use of a governmental unit’s own
       funds, however represented, are unallowable except as specifically provided in subsection
       b. or authorized by Federal legislation.

24 CFR Part 85
Administrative Requirements for Grants and Cooperative Agreements to State, Local and
Federally Recognized Indian Tribal Governments

Subpart C - Post-Award Requirements
Financial Administration
Subsection 85.20 Standards for financial management systems
(b) The financial management systems of other grantees and subgrantees must meet the
following standards:
…
    (3) Internal control. Effective control and accountability must be maintained for all grant
          and subgrant cash, real and personal property, and other assets. Grantees and
          subgrantees must adequately safeguard all such property and must assure that it is used
          solely for authorized purposes…
    (5) Allowable cost. Applicable OMB cost principles, agency program regulations, and the
          terms of grant and subgrant agreements will be followed in determining the
          reasonableness, allowability, and allocability of costs.
    (6) Source documentation. Accounting records must be supported by such source
          documentation as cancelled checks, paid bills, payrolls, time and attendance records,
          contract and subgrant award documents, etc.
…
Changes, Property, and Subawards
Subsection 85.32 Equipment
…
(d) Management requirements. Procedures for managing equipment (including replacement
equipment), whether acquired in whole or in part with grant funds, until disposition takes place
will, as a minimum, meet the following requirements:
    (1) Property records must be maintained that include a description of the property, a serial
          number or other identification number, the source of property, who holds title, the
          acquisition date, and cost of the property, percentage of Federal participation in the cost
          of the property, the location, use and condition of the property, and any ultimate
          disposition data including the date of disposal and sale price of the property.
    (2) A physical inventory of the property must be taken and the results reconciled with the
          property records at least once every two years.
    (3) A control system must be developed to ensure adequate safeguards to prevent loss,
          damage, or theft of the property. Any loss, damage, or theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the property in good
          condition.



                                                 17
Housing Authority of the City of Victoria, Texas, and Its Related Entities, Personnel Policy
Section 4.7 Timekeeping
       Each employee is to punch a time clock when their work day begins and again when their
work day ends. Each employee is required to fill out a request for vacation days prior to taking
the days off and have their immediate supervisor sign off on the form. Each employee is
required to fill out a sick leave form the morning or afternoon they return to work after being
sick and have their immediate supervisor sign off on the form. If the immediate supervisor is
unavailable, go to the Deputy Director/Financial Supervisor or the Executive Director. If an
employee misses more then [sic] three consecutive days of work for the reason of illness, they
must produce a written statement from their physician before returning to work. If you have a
pre scheduled appointment, you must fill out the appropriate form and get your supervisor’s
approval when the appointment is made. Anytime you leave the building, you must punch out
and back in when you return, unless you are leaving the building for Housing Authority business.

        Every employee with the exception of the Executive Director and the Deputy Director
shall be required to use a time clock and sign and leave their time cards semi-monthly in the
timecard holder to be picked up by the appropriate staff.
...
        This will replace Section 8.1 VACATION, of Personnel Policy which was originally
Board approved on October 13, 2004. The change is effective January 1, 2011.

        Only regular full-time employees may receive paid vacation leave. Employees who have
been with the Housing authority less than 6 months continuously may accrue but shall not be
entitled to any vacation leave. Employees who have been with the Housing Authority 6 months
or more shall be eligible for vacation according to the following:

        One to Nine Years            10 days
        Ten to Fourteen Years        15 days
        Fifteen Years Plus           20 days

        Your immediate supervisor must approve all leave and vacation schedule requests with
primary consideration given to the continued operation of the Housing Authority and the needs
of residents. If the immediate supervisor is unavailable, go to the Deputy Director or the
Executive Director.

        Vacation leave is accrued on the anniversary date of the employee’s employment start
date.

        Employees are encouraged to use all vacation leave within one year after accrual.
Vacation time may be paid to the employee at the employee’s regular salary or wage rate.
Effective January 1, 2011 the limit an employee can be paid in vacation time will be a maximum
of 160 hours per calendar year, but never to exceed their accrual.

       Effective January 1, 2011, an employee cannot accrue more than 640 hours (4 months) of
vacation time. There is no grandfather clause to this. It will affect all current and future
employees as of January 1, 2011. Anything over 640 hours will be forfeited.

                                               18
…
Vacation leave may not be advanced to employees until the Financial Supervisor shows the
Executive Director documentation that the vacation time accrued does not exceed the request
made by the employee for the paid vacation time and to ensure that the employee has not been
paid for more than 160 hours within the calendar year.…




                                              19
Appendix D

     INELIGIBLE CHECKS ISSUED BY THE CHIEF FINANCIAL
                         OFFICER
     Count     Check no.          Date                        Payee                        Amount
         1          10773      09/11/2007     Chief financial officer                      $    320.10 16
         2          10844      10/08/2007     Chief financial officer                           1,120.35
         3          10953      11/19/2007     Chief financial officer                           1,120.35
         4          11064      12/20/2007     Chief financial officer                           2,774.00
         5          11318       3/26/2008     Chief financial officer                           2,800.00
         6          11468       5/19/2008     Chief financial officer                           1,456.25
         7          11560       6/26/2008     Chief financial officer                           1,456.25
         8          11380       7/08/2008     Chief financial officer                           1,233.20
         9          11686       8/14/2008     Chief financial officer                             806.64
        10          11695       8/28/2008     Chief financial officer                           1,456.25
        11          11838      10/22/2008     Chief financial officer                             806.64
        12          11907      11/13/2008     Chief financial officer                           1,075.52
        13          11910      11/20/2008     Chief financial officer                           1,142.74
        14          12017      12/23/2008     Chief financial officer                             941.08
        15          12167       2/19/2009     Chief financial officer                             806.64
        16          12168       3/03/2009     Chief financial officer                           2,800.00
        17          12260       3/27/2009     Chief financial officer                             941.08
        18          12268       3/30/2009     Chief financial officer                             500.00
        19          12297       4/09/2009     Chief financial officer                           3,028.50
        20          12363       5/20/2009     Chief financial officer                             978.32
        21          12497       6/25/2009     Chief financial officer                           1,048.20
        22          12519       6/29/2009     Chief financial officer                           3,028.50
        23          12544       7/20/2009     Chief financial officer                           3,028.50
        24          12689       8/19/2009     Chief financial officer                           1,222.90
        25          12688       8/21/2009     Chief financial officer                           3,028.50
        26          12758       9/10/2009     Chief financial officer                           3,028.50
        27          12821       9/28/2009     Chief financial officer                           1,222.90
        28          12851      10/01/2009     Chief financial officer                           1,118.08
        29          12850      10/05/2009     Chief financial officer                           1,514.25
        30          12883      10/13/2009     Chief financial officer                           1,327.72
        31          12886      10/16/2009     Chief financial officer                           1,118.08
        32          11776      10/19/2009     Chief financial officer                           1,048.20
        33          12888      10/22/2009     Chief financial officer                           1,153.02
        34          12921      10/28/2009     Chief financial officer                           3,028.50


16
      The check totaled $1,088.34; however, the above amount represented the amount the chief financial officer was
      not entitled to receive.

                                                         20
Count   Check no.     Date                       Payee     Amount
   35       12979   11/12/2009   Chief financial officer      1,514.25
   36       12993   11/16/2009   Chief financial officer      1,514.25
   37       13063   12/02/2009   Chief financial officer      1,118.08
   38       13076   12/04/2009   Chief financial officer      3,028.50
   39       13122   12/21/2009   Chief financial officer      1,514.25
   40       13149   12/23/2009   Chief financial officer        978.32
   41       10332   12/30/2009   Chief financial officer      1,118.08
   42       13204    1/07/2010   Chief financial officer      1,118.08
   43       11030    1/08/2010   Chief financial officer      1,118.08
   44       11068    1/09/2010   Chief financial officer      1,118.08
   45       10243    1/11/2010   Chief financial officer      1,118.08
   46       13129    1/14/2010   Chief financial officer      2,900.00
   47       13130    1/20/2010   Chief financial officer        650.00
   48       13133    1/26/2010   Chief financial officer      1,118.08
   49       13281    2/02/2010   Chief financial officer        838.56
   50       13310    2/09/2010   Chief financial officer      3,028.50
   51       13354    2/16/2010   Chief financial officer      1,118.08
   52       13355    2/16/2010   Chief financial officer      3,028.50
   53       78968    3/05/2010   Chief financial officer      3,028.50
   54       13459    4/20/2010   Chief financial officer        650.00
   55       75555    4/23/2010   Chief financial officer      3,149.50
   56       74348    5/03/2010   Chief financial officer      1,574.75
   57       74349    5/07/2010   Chief financial officer      1,162.88
   58       73461    5/11/2010   Chief financial officer      1,162.88
   59       13612    5/12/2010   Chief financial officer      1,574.75
   60       13652    5/24/2010   Chief financial officer      1,383.20
   61       13653    5/25/2010   Chief financial officer      1,199.22
   62       13654    6/02/2010   Chief financial officer      1,017.52
   63       13732    6/17/2010   Chief financial officer      1,574.75
   64       13744    6/23/2010   Chief financial officer      1,017.52
   65       13763    6/29/2010   Chief financial officer      3,149.50
   66       13756    7/16/2010   Chief financial officer      1,162.88
   67       13757    7/28/2010   Chief financial officer      1,162.88
   68       13877    8/03/2010   Chief financial officer      1,574.75
   69       13878    8/06/2010   Chief financial officer      1,574.75
   70       13936    8/23/2010   Chief financial officer      1,235.56
   71       13949    9/07/2010   Chief financial officer      3,149.50
   72       79616    9/23/2010   Chief financial officer      3,149.50
   73       79620   10/19/2010   Chief financial officer      1,574.75
   74       14117   10/25/2010   Chief financial officer      1,574.75
   75       79617   10/30/2010   Chief financial officer      3,149.50
   76       79619   11/05/2010   Chief financial officer      3,149.50
   77       14211   11/18/2010   Chief financial officer      1,574.75
   78       14299   12/22/2010   Chief financial officer        650.00

                                           21
Count   Check no.     Date                       Payee     Amount
   79       14348    1/11/2011   Chief financial officer      1,574.75
   80       14407    2/01/2011   Chief financial officer      1,574.75
   81       14449    2/17/2011   Chief financial officer        775.00
   82       14549    3/25/2011   Chief financial officer      1,574.75
   83       14634    4/27/2011   Chief financial officer      1,637.50
   84       14468    5/05/2011   Chief financial officer        650.00
   85       14700    5/17/2011   Chief financial officer      1,851.71
   86       14711    5/24/2011   Chief financial officer      3,275.00
   87       14774    6/01/2011   Chief financial officer      3,275.00
   88       14830    6/23/2011   Chief financial officer      1,485.00
   89       14832    6/24/2011   Chief financial officer      3,275.00
   90       14943    7/02/2011   Chief financial officer      3,275.00
   91       14944    7/08/2011   Chief financial officer      3,275.00
   92       14945    7/15/2011   Chief financial officer      3,275.00
   93       14946    7/29/2011   Chief financial officer      1,450.00
   94       14947    8/01/2011   Chief financial officer      3,275.00
   95       14948    8/03/2011   Chief financial officer      3,275.00
   96       15092    8/18/2011   Chief financial officer        950.00
   97       74345    8/22/2011   Chief financial officer      2,975.00
   98       15141    9/12/2011   Chief financial officer      2,975.00
   99       15405   12/21/2011   Chief financial officer      3,275.00
  100       15517    1/20/2012   Chief financial officer      1,209.28
  101       15591    2/06/2012   Chief financial officer      1,209.28
  102       15588    2/15/2012   Chief financial officer      1,637.50
  103       15599    2/23/2012   Chief financial officer        604.64
  104       15663    3/21/2012   Chief financial officer      3,275.00
  105       15705    4/05/2012   Chief financial officer      1,300.00
  106       82970    5/29/2012   Chief financial officer      3,257.00
  107       15910    7/05/2012   Chief financial officer      3,407.00
  108       16029    8/23/2012   Chief financial officer      3,407.00
  109       16062   10/20/2012   Chief financial officer        950.00
  110       16307   12/05/2012   Chief financial officer        950.00
  111       16358   12/26/2012   Chief financial officer      3,207.00
  112       16384    1/04/2013   Chief financial officer      1,703.50
  113       16429    1/18/2013   Chief financial officer      1,257.92
  114       16439    1/24/2013   Chief financial officer        800.00
  115       16030    1/25/2013   Chief financial officer      3,107.00
  116       15602    2/02/2013   Chief financial officer      1,329.40
  117       16473    2/07/2013   Chief financial officer      1,415.16
  118       15876    2/15/2013   Chief financial officer      3,407.00
  119       16501    2/20/2013   Chief financial officer      3,407.00
  120       82155    3/07/2013   Chief financial officer      3,407.00
  121       16651    4/16/2013   Chief financial officer      1,297.23
  122       74956    4/20/2013   Chief financial officer      3,207.00

                                           22
Count   Check no.     Date                     Payee                   Amount
  123       74346    4/23/2013   Chief financial officer                   3,107.00
  124       16672    4/26/2013   Chief financial officer                   3,407.00
  125       16689    5/01/2013   Chief financial officer                   3,407.00
  126       16688    5/03/2013   Chief financial officer                   1,297.23
  127       16730    5/16/2013   Chief financial officer                   1,375.85
  128       84471    5/17/2013   Chief financial officer                   1,375.85
  129       16740    5/24/2013   Chief financial officer                   3,407.00
  130       84733    6/20/2013   Chief financial officer                   3,407.00
  131       16847    7/01/2013   Chief financial officer                   3,407.00
  132       84789    7/03/2013   Chief financial officer                   3,407.00
  133       16849    7/15/2013   Chief financial officer                   3,407.00
  134       16778    7/23/2013   Chief financial officer                   3,407.00
  135       16741    7/25/2013   Chief financial officer                   3,407.00
  136       84890    8/01/2013   Chief financial officer                   1,800.00
  137       18255    8/05/2013   Chief financial officer                   3,407.00
  138       84891    8/09/2013   Texas Guaranteed Student Loan Corp        2,300.00
  139       18300    8/13/2013   Chief financial officer                   3,407.00
  140       18276    8/16/2013   Chief financial officer                   1,400.00
  141       72022    8/26/2013   Chief financial officer                   1,500.00
  142       85092    9/01/2013   Chief financial officer                   3,407.00
  143       85093    9/05/2013   Chief financial officer                   3,407.00
  144       85094    9/06/2013   Chief financial officer                   1,703.50
  145       85095    9/18/2013   Chief financial officer                   3,407.00
  146       72021    9/30/2013   Chief financial officer                   3,407.00
  147       67147   10/03/2013   Chief financial officer                   3,407.00
  148       16928   10/15/2013   Chief financial officer                   3,407.00
  149       16929   10/18/2013   Chief financial officer                   1,703.50
  150       16939   10/23/2013   Chief financial officer                   3,407.00
  151       67150   11/02/2013   Chief financial officer                   3,407.00
  152       67152   11/06/2013   Chief financial officer                   3,407.00
  153       67151   11/08/2013   Chief financial officer                   1,450.00
  154       73811   11/14/2013   Chief financial officer                   1,580.00
  155       73815   11/22/2013   Chief financial officer                   3,407.00
  156       17087   12/10/2013   Chief financial officer                   3,407.00
  157       17145    1/08/2014   Chief financial officer                   1,336.54
                                                               Total   $ 322,331.41




                                          23
Appendix E

                     UNSUPPORTED VENDOR CHECKS
     Payment       Check
#      date       number                 Vendor                 Description         Amount

1    01/30/2013   84075    CPL Business                Acct # 1034075              $ 5,731.40

2    01/30/2013   84076    Dollar Tree                 Cleaning supplies               150.00

3    03/25/2013   84377    Centro De Alabanza Church   Plates for elderly Easter       210.00
                           Ideal Aluminum Siding &
4    03/28/2013   84281    Roofing                     New roof at #6 building      12,024.00
                                                       Acct: Victoria Housing
5    03/29/2013   84292    Auto Zone                   Authority                       113.90

6    04/16/2013   84515    Guadalupe Villareal         Fixed 4 mowers                  200.00

7    04/26/2013   84565    Guadalupe Villareal         Fixed lawnmowers                200.00

8    04/29/2013   84566    Dollar Tree                 Cleaning supplies               150.00

9    06/21/2013   84472    Dolores Garza               Advance of wages                775.00

10   07/17/2013   84842    Dollar Tree                 Cleaning supplies               150.00

11   08/1/2013    84936    The Nelrod Company          Acct # Victoria                 598.00
                           HD Supply Facilities
12   08/13/2013   84970    Maintenance                 Cust # 59890                  3,121.96

13   11/5/2013    85360    Dollar Tree                 Cleaning supplies               150.00

                                          Total                                    $23, 574.26




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