oversight

The Housing Authority of the City of Pittsburgh, PA, Did Not Always Make Payments for Outside Legal Services in Compliance With Applicable Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2015-09-30.

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 30, 2015
                                                                                            MEMORANDUM NO:
                                                                                                 2015-PH-1808


Memorandum
TO:           Jacqueline A. Molinaro-Thompson
              Director, Office of Public Housing, Pittsburgh Field Office, 3EPH

              //signed//
FROM:         David E. Kasperowicz
              Regional Inspector General for Audit, Philadelphia Region, 3AGA

SUBJECT:      The Housing Authority of the City of Pittsburgh, PA, Did Not Always Make
              Payments for Outside Legal Services in Compliance With Applicable
              Requirements


                                          INTRODUCTION

We conducted a review of the Housing Authority of the City of Pittsburgh’s payments for
outside legal services in conjunction with an ongoing internal audit of the U.S. Department of
Housing and Urban Development’s (HUD) oversight of public housing agencies’ expenditures
for outside legal services. Our review objective was to determine whether the Authority made
payments for outside legal services in compliance with applicable requirements.

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 review.

The Inspector General Act, Title 5 United States Code, section 8M, requires that the Office of
Inspector General (OIG) post its publicly available reports on the OIG Web site. Accordingly,
this report will be posted at http://www.hudoig.gov.

                              METHODOLOGY AND SCOPE

The Authority was one of three Moving to Work public housing agencies selected for review as
part of our ongoing internal audit. We conducted our review from January 2014 to August 2015
at our office in Philadelphia, PA. To accomplish our review objective, we identified payments
that the Authority made from October 1, 2007, through September 30, 2012, for outside legal
                                                    Office of Audit Region 3
                                             The Wanamaker Building, Suite 10205
                                      100 Penn Square East, Philadelphia, PA 19107-3380
                              Visit the Office of Inspector General Web site at www.hudoig.gov.
expenses.

We determined that the Authority made $2.9 million in payments related to 978 invoices for
outside legal services during the review period. We statistically selected 86 sample invoices
totaling $758,165 and requested that the Authority provide documentation supporting its
payment of the sample invoices. In addition, we obtained and reviewed the following:

       •    Relevant HUD regulations and requirements.

       •    Invoices, canceled checks, contracts, general journal entries, and purchase orders
            related to payments that the Authority made to 11 outside law firms.

       •    The Authority’s procurement policy and record retention policy.

       •    The Authority’s Moving to Work agreement, annual plans, and annual reports.

We also held discussions with HUD program officials and Authority officials.

We relied in part on computer-processed data provided by the Authority. This consisted of a
disbursements register listing invoices for outside legal services during the review period.
Although we did not perform a detailed assessment of the reliability of the data, we performed a
minimal level of testing and found the data to be adequate for our purposes. The testing entailed
matching information from the Authority’s data to source documentation, including invoices and
cancelled checks.

We used statistical sampling procedures to estimate the potential unsupported payments related
to the universe of payments based on issues identified.

Our review covered transactions and events that occurred during the period October 1, 2007,
through September 30, 2012. This was a limited scope review. Therefore, it was not performed
in accordance with generally accepted government auditing standards. For example, we did not
perform an assessment of internal controls as it relates to the objective.

                                        BACKGROUND

The U.S. Housing Act of 1937, as amended, initiated the Nation’s public housing program. That
same year, the City of Pittsburgh established the Housing Authority of the City of Pittsburgh
under Pennsylvania laws to address housing issues affecting low-income persons. The
Authority’s main administrative office is located at 200 Ross Street, Pittsburgh, PA. The
Authority is governed by a six-member board of commissioners. The board is responsible for
establishing goals, approving policy and budgets, and providing general direction to the
Authority’s executive director. The Authority manages approximately 4,000 public housing
units and oversees an additional 900 mixed-finance units, serving about 20,000 people in
Pittsburgh, PA.

The Authority is a participant in HUD’s Moving to Work Demonstration program. In 1996,




                                                 2
Congress authorized the Moving to Work Demonstration program as a HUD demonstration
program. This program allowed certain public housing agencies to design and test ways to
promote self-sufficiency among assisted families, achieve programmatic efficiency, reduce costs,
and increase housing choice for low-income households. Congress exempted participating
agencies from much of the Housing Act of 1937 and associated regulations as outlined in the
Moving to Work agreements. Participating agencies have considerable flexibility in determining
how to use Federal funds. In 1999, the Authority was specifically named and authorized to be a
Moving to Work program participant by the 1999 Appropriations Act. In January 2009, it
entered into a new 10-year Moving to Work agreement with HUD. The agreement expires in
December 2018. The Authority’s fiscal year begins on January 1.

                                       RESULTS OF REVIEW

The Authority did not always make payments for outside legal services in compliance with
applicable requirements. It paid for legal services that were not within contract terms and did not
always maintain adequate documentation to support payments for legal services. These
problems occurred because the Authority lacked controls to ensure that it adequately verified
invoices before payment and followed Federal requirements and contract terms. As a result, the
Authority made $141,164 1 in unsupported payments for outside legal services using its Moving
to Work program funds.

The Authority Paid for Legal Services That Were Not Billed in Accordance With Federal
Requirements and Contract Terms

The Authority made $141,164 in payments for legal services that were not billed in accordance
with Federal requirements and contract terms. It paid for services based on block-billed entries,
services rendered by unapproved personnel, and unreasonable and unnecessary charges. It also
paid for services that were not identified in its contracts with its outside law firms. Regulations
at 2 CFR (Code of Federal Regulations) Part 225, appendix A, required that costs be necessary,
reasonable, and adequately documented. Also, Office of Management and Budget (OMB)
Circular A-133, subpart C.300(c), required the Authority to comply with laws, regulations, and
the provisions of contracts or grant agreements related to each of its Federal programs. In
addition, regulations at 24 CFR 85.36 required the Authority to ensure that contractors
performed in accordance with the terms, conditions, and specifications of their contracts. The
Authority lacked controls to ensure that it adequately verified invoices before payment and
followed Federal requirements and contract terms and as a result, made $141,164 in payments
for legal services that were not billed in accordance with Federal requirements or the contract.
The following paragraphs provide details.




1
 Some invoices had more than one deficiency. Appendix C contains a summary of payments to law firms by
deficiency identified.




                                                     3
The Authority Paid for Legal Services Based on Block Billing

Regulations at 2 CFR Part 225 required that costs be necessary, reasonable, and adequately
documented. We identified 39 invoices totaling $508,347, which included $118,707 in block-
billed entries. This type of billing does not identify the nature of the work performed; therefore,
it was impossible to know how much time was spent on an activity to determine the necessity
and reasonableness of the work performed and the accuracy of the billing. During our review,
the Authority contacted the associated law firms to obtain additional details. Several of the firms
provided revised invoices, which included a breakdown of the hourly charges that were not
included on the original invoices. However, since the Authority made payments to the firms
based on block-billed time entries, the amounts paid were unsupported. Appendix D provides a
sample excerpt from an invoice showing block billing. To resolve this issue, HUD needs to
assess whether the documentation the Authority provided and any additional documentation it
provides after the review are sufficient to support the payments totaling $118,707 or require the
Authority to repay its program for costs that it cannot support.

The Authority Paid Outside Law Firms To Respond to an OIG Audit

The Authority paid $40,223 to two outside law firms to assist it in preparing a response to a
HUD Office of Inspector General (OIG) audit report 2 in which we recommended that it provide
documentation to support $58,470 in housing assistance payments, reimburse its leased housing
program $16,991 for ineligible payments, and reimburse applicable tenants $1,708 for housing
assistance underpayments. The Authority paid the outside law firms more than twice as much as
needed 3 and more than 50 percent of the total questioned costs to handle a matter routinely
handled in-house at other agencies. The legal expenses were not necessary or reasonable,
especially since the audit findings were sustained and the Authority repaid $44,725. Regulations
at 2 CFR Part 225 required that costs be necessary, reasonable, and adequately documented. It
was unnecessary and unreasonable for the Authority to pay the outside law firms at least
$40,000 4 to respond to the audit report. Appendix E provides a sample excerpt from an invoice
showing charges for assistance in preparing the Authority’s response to the audit report. To
resolve this issue, HUD needs to assess whether the documentation the Authority provided and
any additional documentation it provides after the review are sufficient to support the payments
totaling $40,223 or require the Authority to repay its program for costs that it cannot support.




2
  2008-PH-1014, dated September 30, 2008, The Housing Authority of the City of Pittsburgh, Pennsylvania, Did
Not Adequately Administer Its Housing Assistance Payments for Leased Housing
3
  The audit report recommended that the Authority pay $18,699, including $16,991 to reimburse its program and
$1,708 to reimburse applicable tenants. The Authority paid outside law firms at least $40,223 to respond to the
audit, which is more than twice the $18,699 recommended in the report.
4
  This amount is related to 3 of the 86 invoices reviewed as part of the statistical sample. There could be additional
invoices the Authority paid that contained legal fees to respond to HUD OIG audits.




                                                           4
Outside Legal Services Were Not Always Performed by Approved Personnel

The Authority failed to comply with OMB regulations and its own contractual agreement when it
paid for services that were performed by personnel not listed in the contract. Of the 86 invoices
reviewed, 4 invoices totaling $137,941 showed $2,245 in legal services that were performed by
unapproved personnel. The personnel listed on the invoices were not listed in the contract(s) or
the law firm’s fee proposal submitted in response to the Authority’s request for proposal. During
our review, the Authority contacted the associated law firm about the unapproved personnel.
The law firm stated that the employees were members of its legal opinion committee and it
would be impractical to expect every employee of the firm to sign the contract. Ensuring that
personnel performing services were authorized to do so is an important control to safeguard
funds spent in relation to the contract. Therefore, the Authority should have ensured that the
services for which it paid were performed by authorized personnel. To resolve this issue, HUD
needs to assess whether the documentation the Authority provided and any additional
documentation it provides after the review are sufficient to support the payments totaling $2,245
or require the Authority to repay its program for costs that it cannot support.

The Authority Paid for Legal Services That Were Not Identified in the Contract

The Authority failed to comply with OMB regulations and its own contractual agreement when it
paid for legal services that were not identified in the contract. The Authority paid $2,816 for
legal research included in three invoices. This type of service was not identified or covered in
the contract. To resolve this issue, HUD needs to assess whether the documentation the
Authority provided and any additional documentation it provides after the review are sufficient
to support the payments totaling $2,816 or require the Authority to repay its program for costs
that it cannot support.

Conclusion

The Authority did not always make payments for outside legal services in compliance with
applicable requirements. It lacked controls to ensure that it adequately verified invoices before
payment and followed Federal requirements and contract terms. As a result, it paid unsupported
costs totaling $141,164 5 for outside legal services. However, based on our review, at least
$743,899 of the $2.9 million in payments for outside legal services could be unsupported. 6




5
  Some invoices had more than one deficiency. Appendix C contains a summary of payments to law firms by
deficiency identified.
6
  For the 978 invoices with payments totaling $2.9 million, the weighted average per invoice was $1,684.74.
Deducting for a statistical margin of error, we can say – with a one-sided confidence interval of 95 percent – that the
average amount of unsupported funds paid per invoice is $760.63 based on the 86 sample invoices reviewed.
Extrapolating the $760.63 average unsupported amount to the universe of 978 invoices indicates that at least
$743,899 of the $2.9 million in payments for outside legal services could be unsupported.




                                                           5
                                  RECOMMENDATIONS

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

       1A.    Determine whether the documentation the Authority provided and any additional
              documentation it provides in response to the review are adequate to support the
              $141,164 in unsupported payments identified by the review or require the
              Authority to reimburse its program from non-Federal funds for costs that it cannot
              support.

       1B.    Require the Authority to develop and implement controls to ensure that invoices
              for legal services are adequately verified and its payments for outside legal
              services are made in accordance with the terms of the related contracts and other
              applicable requirements.




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APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS

                           Recommendation
                                                  Unsupported 1/
                               number

                                  1A                $141,164



1/   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.




                                              7
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




Comment 1



Comment 2



Comment 1




                          8
Ref to OIG Evaluation   Auditee Comments




Comment 1



Comments 1 and 3


Comment 4




Comment 5




Comment 6


Comment 7




                          9
Ref to OIG Evaluation   Auditee Comments




Comment 7


Comment 8




Comment 9




Comment 10




Comment 10




                         10
Ref to OIG Evaluation   Auditee Comments




Comment 11




Comment 12




Comment 13




Comment 14




                         11
Ref to OIG Evaluation   Auditee Comments




Comment 15




                         12
                         OIG Evaluation of Auditee Comments


Comment 1   The Authority stated that there was no regulation, HUD policy, HUD procedure,
            Authority contract, or procurement policy that prohibited block billing. We agree.
            Further, for the contracts related to the invoices in question, we did not identify
            any provisions that prohibited block billing. However, as detailed in the report,
            regulations at 2 CFR Part 225 required that costs be necessary, reasonable, and
            adequately documented. The block-billed entries for the 39 invoices in question
            did not identify the specific nature of the work performed; therefore, it was
            impossible to know how much time was spent on an activity to determine the
            necessity and reasonableness of the work performed and the accuracy of the
            billing. As a result, we classified the related costs as unsupported. As part of the
            audit resolution process, HUD will need to determine whether the documentation
            the Authority provided and any additional documentation it provides after the
            review are sufficient to support the payments totaling $118,707 or require the
            Authority to reimburse its program from non-Federal funds for costs that it cannot
            support.

Comment 2   The Authority stated that we had not clearly defined and consistently applied a
            definition of the term “block billing.” It further stated that this was at least the
            third time OIG had cited a housing authority for block billing and that in each
            instance, we used a different definition. The Authority also indicated that if the
            definition from the 2011 Philadelphia audit report was used in this audit, it would
            have been in compliance.

            The Authority referred to two previous OIG audit reports, as well as the current
            report. The previous reports related to the Philadelphia Housing Authority (report
            number 2011-PH-1007, dated March 10, 2011) and the Chicago Housing
            Authority (report number 2015-PH-1805, dated April 20, 2015). In the
            Philadelphia Housing Authority report, we defined block billing as, “the act of
            billing more than one activity in a single line item while billing only one
            aggregate amount for multiple activities.” In the Chicago Housing Authority
            report, we defined block billing as, “a single time charge for multiple activities.”
            While the language in these two reports was not identical, the overall meaning
            was the same. In these two cases, the related contracts included terms addressing
            block billing. Because there were specific criteria prohibiting the practice in these
            cases, we cited the contract terms as the criteria. The regulations at 2 CFR Part
            225 also applied. Although the Pittsburgh Housing Authority’s contracts for the
            invoices in question did not contain language prohibiting block billing, it was still
            required to comply with requirements at 2 CFR Part 225.

Comment 3   The Authority stated that we equated block billing with a failure to comply with 2
            CFR Part 225. As stated in the report, the Authority failed to comply with 2 CFR
            Part 225 which required that costs be necessary, reasonable, and adequately
            documented. The block-billed entries for the 39 invoices in question did not




                                             13
                  identify the specific nature of the work performed; therefore, it was impossible to
                  know how much time was spent on an activity to determine the necessity and
                  reasonableness of the work performed and the accuracy of the billing.

Comment 4         The Authority stated that we had not given direction on the use of “task based
                  billing,” “clumped task based billing,” or “line item pricing” as possible
                  alternatives. As indicated during the exit conference, rather than evaluate a
                  specific billing practice, we compared documentation against applicable
                  requirements, including 2 CFR Part 225. The Authority needs to work with HUD
                  to update its policies and procedures to ensure that payments for outside legal
                  services are made in accordance with requirements.

Comment 5         The Authority stated that there was no regulation, HUD policy, HUD procedure,
                  or Authority contract that prohibited the use of outside counsel to address an
                  audit. We agree that there was no regulation, HUD policy, HUD procedure, or
                  Authority contract that prohibited the use of outside counsel to address an audit.
                  However, regulations at 2 CFR Part 225 required that costs be necessary,
                  reasonable, and adequately documented. The Authority paid at least $40,223 7 to
                  two outside law firms to assist it in preparing a response to an OIG audit report in
                  which we recommended that it repay $18,699. The Authority paid the outside
                  law firms more than twice as much as the $18,699 and more than 50 percent of
                  the total questioned costs of $77,169 8 in the report to handle matters routinely
                  handled in-house at other agencies. We believe the $40,223 paid was unnecessary
                  and unreasonable. Since $21,371 of the charges were block billed they were not
                  adequately documented as well. As part of the resolution process, HUD will need
                  to determine whether the documentation the Authority provided and any
                  additional documentation it provides after the review are sufficient to support the
                  payments totaling $40,223 or require the Authority to repay its program for costs
                  that it cannot support.

Comment 6         The Authority stated that we were not consistent when citing criteria. It further
                  stated that we alleged that it failed to pay law firms in accordance with contract
                  terms and, in this result, we ignored the contract terms. The Authority also
                  asserted that we advocated payment based on the outcome. We were not
                  inconsistent when citing criteria. We cited the appropriate criteria based on the
                  circumstances related to the legal services we reviewed. As stated in the report,
                  the Authority paid for some services that were performed by personnel not listed
                  in the contract and for some services that were not identified in the contract. We



7
  This amount is related to 3 of the 86 invoices reviewed as part of the statistical sample. There could be additional
invoices the Authority paid that contained legal fees to respond to HUD OIG audits.
8
  $77,169 = $58,470 unsupported costs + $16,991 ineligible costs + $1,708 housing assistance underpayments




                                                          14
              did not advocate for payment based on outcome. However, the Authority should
              have considered the potential outcome before incurring significant costs for legal
              services to handle matters routinely handled in-house at other agencies.

Comment 7     The Authority stated that the decision to use outside counsel to address a previous
              OIG inquiry was appropriate at the time due to the Authority’s legal department’s
              workload, the nature and volume of the OIG request, as well as, the limited staff
              in the legal department at the time of the request. It further stated that it was
              common in the legal industry for bills to exceed the amount in dispute and that the
              Authority does not have the benefit of hindsight to reduce legal costs and
              expenses. Our review objective was to determine whether the Authority made
              payments for outside legal services in compliance with applicable requirements.
              Based on the documentation reviewed, we believe the $40,223 paid did not
              comply with 2 CFR Part 225 which required that costs be necessary, reasonable,
              and adequately documented. As part of the audit resolution process, HUD will
              need to determine whether the documentation the Authority provided and any
              additional documentation it provides after the review are sufficient to support the
              payments totaling $40,223 or require the Authority to repay its program for costs
              that it cannot support.

Comment 8     The Authority stated that we failed to take into account the hundreds of thousands
              of dollars initially in dispute and that the final bill was paid in accordance with
              contract terms. We do not dispute that the Authority paid for legal expenses in
              accordance with the contracts. However, regardless of the total amount in
              dispute, the Authority’s payments for legal services had to comply with
              regulations at 2 CFR Part 225. We believe the amount the Authority paid was
              unnecessary and unreasonable because matters such as these are routinely handled
              in-house at other agencies. Further, since some of the payments were for charges
              that were block billed, they were not adequately documented.

Comment 9     The Authority stated that it appeared we were making an assumption based on a
              contract near the beginning of the review period and applying it to an invoice near
              the end of the review period to justify our finding. The Authority further stated
              that it reviewed and approved firms based on the firm’s qualifications as a whole
              and not on specific individuals in that firm. Regulations at OMB Circular A-133,
              subpart C.300(c), required the Authority to comply with laws, regulations, and
              provisions of contracts or grant agreements related to each of its Federal
              programs. The Authority was required to follow the terms of its contracts. The
              contracts between the Authority and the law firms specifically listed names and
              rates of attorneys who would be performing legal services. However, we
              identified payments totaling $2,245 for personnel that were not listed in the
              contracts.

Comment 10 The Authority stated that it would be impractical to expect every employee of a
           law firm to sign or be named in its contracts. The issue discussed in the report
           addressed only $2,245 in legal services on four invoices from one law firm. Our




                                              15
              review showed that the other law firms included in their contracts the names of
              their personnel approved to perform services and we were able to verify that
              personnel and billing rates identified on invoices were listed in the related
              contracts or the law firm’s fee proposal submitted in response to the Authority’s
              request for proposal.

Comment 11 The Authority provided an example of the challenges it would face if it applied
           the report’s reasoning to one of its service contracts for health care. Our review
           objective was to determine whether the Authority made payments for outside
           legal services in compliance with applicable requirements. We are only reporting
           on the invoices and related contracts that we reviewed, which all relate to legal
           services. Because attorneys advise their clients, act on their behalf in legal
           matters, and charge significant hourly fees for billable hours of service, ensuring
           that the personnel performing and billing for services were authorized to do so is
           an important control to protect the Authority and safeguard its funds.

Comment 12 The Authority stated that corporate law firms and partnerships carry malpractice
           insurance that insures against unapproved or unauthorized practitioners working
           on a case; ensures that attorneys are properly licensed; ensures that attorneys meet
           continuing education requirements; and will compensate the Authority or correct
           errors made by their employees. Although law firms may be held to these
           requirements, the Authority was responsible to comply with OMB regulations and
           its own contractual agreements and pay for services performed by approved
           personnel identified in the contract.

Comment 13 The Authority stated that the report’s proposal would place it at a severe
           disadvantage in litigation because courts typically require an initial response
           within 20 days of being serviced. The Authority indicated that reviewing or
           amending its legal services contracts each time it is served with a complaint could
           cause it to miss such deadlines. However, the issue discussed in the report
           addressed only $2,245 in legal services on four invoices from one law firm. We
           do not believe that adding the names and rates of personnel approved to perform
           legal services under existing contracts would place the Authority at a severe
           disadvantage in litigation.

Comment 14 The Authority stated that we failed to identify or define who is considered
           “authorized” or “approved” personnel. As explained in the report, we considered
           authorized or approved personnel as those personnel identified in the contract or
           in the law firm’s fee proposal submitted with the Authority’s request for proposal.

Comment 15 The Authority stated that with the exception of the specific items totaling $2,816
           that were not identified in the contract(s), it paid for all legal services in
           accordance with Federal requirements and contract terms. We disagree. As
           stated in the report, we determined that payments for legal services totaling
           $141,164 were unsupported because the Authority did not always make payments
           in compliance with requirements. As part of the audit resolution process, HUD




                                              16
will need to determine whether the documentation the Authority provided and any
additional documentation it provides in response to the review are adequate to
support the $141,164 in unsupported payments identified or require the Authority
to reimburse its program from non-Federal funds for costs that it cannot support.




                               17
Appendix C

SUMMARY OF PAYMENTS TO LAW FIRMS BY DEFICIENCY
                 IDENTIFIED




                                                                                                                                  Number of invoices with block
                                              Number of invoices reviewed 9




                                                                                                                                  assistance replying to a HUD




                                                                                                                                   identified in the contract (4)
                                                                                                                                   charges billed that were not
                                                                                                                                    unapproved personnel (3)
                                                                                                                                     Number of invoices with


                                                                                                                                     Number of invoices with

                                                                                                                                     Number of invoices with
                                                                                                        Unsupported amount
                                                                                 Total dollar amount




                                                                                                                                           OIG audit (2)
                                                                                                                                             billing (1)
                  Law firm




    Babst, Calland, Clements, Zomnir,
                                                  2                             $1,159                                       $0    0       0       0       0
    P.C.
    Ballard Spahr Andrews &
                                              15                               130,474                 48,662                      9       2       0       2
    Ingersoll, LLP
    Berry and Associates                       3                                 4,890                    960                       2      0       0       0
    Campbell, Durrant & Beatty, P.C.           8                                20,716                 17,689                       5      0       0       0
    Cohen & Grigsby, P.C.                     28                               498,701                 20,687                      11      0       4       0
    Dickie, McCamey & Chilcote,
                                                  1                              2,955                  2,313                      1       0       0       1
    P.C.
    Grogan Graffam, P.C.                      12                                18,643                    270                      1       0       0       0
    Pepper Hamilton, LLP                       1                                 4,355                  1,860                      1       0       0       0
    Schnader Harrison Segal & Lewis,
                                                  1                             12,334                 12,334                      1       1       0       0
    LLP
    Thomson, Rhodes & Cowie, P.C.              1                                   355        0                                     0      0       0       0
    Tucker Arensberg, P.C.                    14                                63,583   36,389                                     8      0       0
    Totals                                    86                              $758,165 $141,164                                    39      3       4       3




9
    Some invoices had more than one deficiency.




                                                                                 18
(1) Block Billing:

   A single-time charge for multiple activities performed.

(2) Assistance Replying to a HUD OIG Audit:

   Charges for outside law firms assisting the Authority in preparing a response to audit
   findings raised in a HUD OIG audit report.

(3) Unapproved Personnel:

   Lack of supporting documentation to show that a law firm’s staff was authorized (approved)
   to perform legal services according to the contract.

(4) Charges Billed That Were Not Identified in the Contract:

   Charges billed that were not identified in the contract, such as research services.




                                                19
Appendix D

                  EXAMPLE OF BLOCK BILLING




The highlighted example represented multiple activities billed as a single-time charge.




                                         20
Appendix E

     EXAMPLE OF OUTSIDE LAW FIRM ASSISTANCE IN
           RESPONDING TO AN OIG AUDIT




 The example above is from an outside law firm that billed the Authority for assistance in
 preparing a response to a HUD OIG audit report.


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