HomeMy WebLinkAboutMINUTES - 01261999 - C92 CC
Housing Authority of the County of Contra Costa
TO: BOARD OF COMMISSIONERS
FROM: Robert McEwan, Acting Executive Director
DATE: Tuesday, January 26, 1999
SUBJECT: RECEIVE AUDIT REPORT DATED DECEMBER 17, 1998 ON THE DRUG ELIMINATION
PROGRAM (DEP) FROM U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
OFFICE OF INSPECTOR GENERAL(OIG).
SPECIFIC REQUEST(S) OR RECOMMENDATION(S)AND BACKGROUND AND JUSTIFICATION
i. RECOMMENDED ACTION:
RECEIVE for Commissioner review the U.S. Department of Housing and Urban Development Office of Inspector
General Drug Elimination Audit Report dated December 17, 1998.
II. FINANCIAL IMPACT:
Three years of DEP grants totalling $906,895 were recently audited by the OIG. Certain costs totalling$24,106 were
determined by the auditor to be ineligbile.
The OIG is recommending to HUD that the Housing Authority return these funds to the grant by re-programing them
into the existing Housing Authority Drug Elimination Program grant. The reallocation will be paid from Housing
Authority Conventional Budget and Management Fund.
III. REASONS FOR RECOMMENDATION/BACKGROUND
The Housing Authority has operates a Drug Elimination Program that provides supplementary community policing
and drug education activities targeted to public housing developments. This program is funded by the U.S.
Department of Housing and Urban Development.
The Housing Authority recently received the referenced audit report from the OIG. This report covers DEP activities
of the 1994, 1995, and 1996 grants. The DEP program has been funded at the Housing Authority of the County of
Contra Costa since 1991. Although the report showed that a high proportion of DEP funds were used for eligible
purposes, it notes that a portion (about 3%)of the DEP funds were used for ineligible purposes. Housing Authority
staff concurred with some of the findings and took exception to others. The Housing Authority presented its response
to the draft audit and this response is included at the end of the audit report included herewith.
IV. CONSEQUENCES OF NEGATIVE ACTION:
None.
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CONTINUED ON ATTACHMENT: YES SIGNATURE
—_ RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURES) .
ACTION OF BOARD ON Jasi " 26; 1999 APPROVED AS RECOMMENDED _- OTHER ---------
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A TRUE AND
---UNANIMOUS (ABSENT--- - ® � _ } CORRECT COPY OF AN ACTION TAKEN AND
AYES: - NOES: _ _-_-- ENTERED ON THE MINUTES OF THE BOARD OF
ABSENT: _ ABSTAIN: COMMISSIONERS ON THE DATE SHOWN.
ATTESTED - , 26Y_1999
PHIL BATCHELOR, CLERK OF THE BOARD
OF COMMISSIONERS AND COUNTY
ADMINISTRATOR
a
Rp'50 B DEPUTY
*s Issue Date
December 17, 1938
U ci I Audit Case:Number
'" Dort I � 99-SF-209-1002
OFPCE OF I INSPEC70P GENEPAL
TO: Joyce Lee, Director, Office of Public Housing, 9APH
FROM: Glenn S. garner, District Inspector General for Audit, 9AGA
SUBJECT: Housing Authority of the County of Contra.Costa
Drug Elimination Program
Martinez., California
As part of the Inspector General's nationwide review of HUD's drug elimination program, we
conducted an audit of that program at the Housing Authority of the County of Contra Costa.
The report's four findings present recommendations to improve compliance and effectiveness of
the housing authority's drug elimination efforts. Within 60 days, please furnish us a status report
on the corrective action taken, the proposed corrective action and the date to be completed, or
why action is not considered necessary, for each recommendation. Also, please furnish us with
copies of any correspondence issued because of the audit.
If you or your staff have any questions, please contact Assistant District Inspector General Mark
Pierce at (415)436-8101.
Executive Summary
We audited the drug elimination program at the .Housing Authority of the County of
Contra Costa (HACCC). The audit covered the activities of the 1994, 1995, and 1996
grants through March 31, 1998. The objective was to review how the housing authority
managed its drug elimination grants to obtain expected outcomes and determine if grant
funds were used in conformance with applicable requirements.
Our tests showed that a high proportion of DEP funds were used for eligible purposes. The
law enforcement and most of the drug prevention and treatment activities were providing
sorely needed resources to the housing authority's most crime ridden housing
developments. Further, tests indicated that the sheriff performed fully under its contracts
with the housing authority to provide supplemental police services to selected housing
developments. (Approximately two-thirds of AEP funding was used for policing.)
Nevertheless, we noted that a portion of the DEP funds was used for ineligible purposes.
Also, the housing authority made substantial changes to its program without informing
Hifi), and its program evaluation and reporting functions need to be substantially
improved. Further, its accounting records did not adequately separate activities among its
several DEP grants.
The HACCC charged ineligible casts totaling $24,106 to
Cost Eligibility the DEP grants. The ineligible casts included $14,986 for a
summer arts program which did not meet program
guidelines, $3,110 for indirect casts, and $6,010 in
consulting fees for preparing a grant application. This
occurred because responsible officials were not sufficiently
knowledgeable of program requirements or were not fully
aware of how DEP funds were used. The ineligible charges
reduce the amount of funds available for drug elimination
activities.
The HACCC made substantial changes to its IEP program
Pro rano Changes without notifying HUD and obtaining required approval.
The changes included redirecting $68,831 earmarked for its
prevention and treatment programs to law enforcement and
providing $49,078 in services to non-targeted housing
developments. This occurred because HACCC staff did not
believe that HUD was required to be informed. The
changes reallocated funds away from activities and
residents targeted-for DEP assistance.
Program Evaluation and The HACCC did not adequately evaluate the progress of its
Reporting IEP. It' also included some unreliable and incomplete
Page iii 99-SF-209-1002
Executive Summary
information in its semiannual reports submitted to HUD.
This occurred because the housing authority had not placed
a priority on these; Functions. As a result, the I-IACCC,' and
HUD cannot properly assess the program's effectiveness.
The HACCC's accounting records did not distinguish
Accounting Records transactions among the DEP grants. This apparently
occurred because the housing authority was not aware of
the need to maintain this information. As a result, the
accounting system does not provide reasonable assurance
that expenses and income are matched to the appropriate
grant and that grant funds are used in accordance with
requirements.
HACCC's acting executive director Robert McEwan pro-
Auditee Comments vided a written draft response to our preliminary audit con-
clusions. We also discussed the audit's conclusions and the
response on November 5, 1998 at a meeting with the acting
executive director, director of operations, and the acting
financial director. The written response is contained in
Appendix B.
The housing authority generally disputed most of she
audit's conclusions, except for ineligibility of the financial
audit costs and the grant application preparation fee
(discussed in finding 1). Nevertheless, the HACCC gen-
erally concurred with the recommendations from the pro-
gram evaluation and accounting findings (numbered 3 and
4.)
q%SSF-2C`<' 002 Page iv
_..
Table of Contents
Management Memorandum
Executive Summary
Introduction
Findings
1 Ineligible Costs Were Charged to Grants 3
2 Program. Ganges Were Made 'without Infornning HUD 9
3 The Housing Authority Did Not Adequately Assess or Report
on Its DEP 19
4 Accounting Records Need to Identify Individual Transactions
to Particular Grants 31
Management Controls 33
.prior Audit Findings 35
Appendices
A Schedule of Ineligible and Unsupported Amounts 37
B Auditee Comments 39
C Distribution 47
Page v 99-SF-209-1002
Table of Contents
Abbreviations
CFR Code of Federal Regulations (a codification of federal requirements)
DEP Dr=ag Elimination Program (the federal grant program for eliminating drug-related.
crime in public housing)
HACCC Housing Authority of the County of Contra Costa (a recipient of drug elimination
grants and the subject of this audit)
HUD U.S. Department of Housing and Urban Development (the grantor for the drug
elimination program)
NOl~A Notice of Funding Availability (a public notice that describes procedures for
applying for grants and identifies program requirements)
DIC Office of Inspector General, U.S. Department of Housing and Urban
Development (the organization that performed the subject audit)
OMB Office of Management and Budget(the executive agency that establishes uniform
federal policies)
PAL Police Activities League (a volunteer organization which provides activities and
assistance for youth)
99-Sr-209-1002 Page vi
Introduction
HUD manages the public housing drug elimination program (DEP) to provide grant funds
addressing drug-related crime and associated problems in and around public housing
developments. The Housing Authority of the County of Centra Costa (HACCC) has
received DEP grants from HUD annually since 1990.
The 1994, 1995, and 1996 DEP grants to the HACCC
The Housing Authority totaled $906,895. As of March 31, 1998, the 1994 and
1995 grant funds were completely drawn Clown and only
$32,377 of the 1996 grant had yet to be drawn.
The 1994 and 1995 grants called for continuing the drug
elimination program at the Las Deltas development in
?forth Richmond, California. This included funding for
additional law enforcement and the Project Pride drug
intervention and prevention program.
The 1996 grant expanded the program to the Bayo 'Nista
development in Rodeo, California. The program at Bayo
Vista included additional law enforcement and funding for
a computer center to be established and operated. HUD
continued funding for both Las Deltas and Maya Vista with
the 1997 DEP grant.
The housing authority was established in 1941. It is
governed by a board of commissioners which is the county
board of supervisors. The commissioners establish policies
and appoint the executive director, who is responsible for
policy implementation. HACCC has its central office in
Martinez, California.
For its fiscal year ended in March 31, 1997, HACCC had
federal expenditures totaling $51.1 million. Its largest
programs consisted of Section 8 rental certificate ($33.6
million), Section 8 voucher ($6.8 million), low-income
housing operations ($4.5 million), and modernization ($2.9
million). The DEP funds disbursed ($307,469) represented
less than one percent of the total federal expenditures
during the year.
As part of a HUD Office of Inspector General (GIG) review
The 01G Audit of the drug elimination program, the subject audit is one of
several covering different housing authorities" drug elim-
Page I 99-SF-209-1002
Introduction
ination programs. While OIG's San Francisco office per-
formed the audit of the l lousing Authority Of the COUnty of'
Contra Costa, OIt3's Boston, Massachusetts office is con-
ducting the overall review of the program.
Audit Objective and The objective of the audit was to review hove the housing
authority managed its drug elimination grants to obtain:
Scope expected outcomes and determine if grant funds were spent
in conformance with requirements.
The audit examined activities of the three drug elimination
grants awarded from 1994 to 1996 for the period January 1,
1995 to March 31, 1998. The primary methodologies for
the audit included:
Consideration of the Dousing authority's management
control structure and the assessment of risk,
V Tests of selected financial activities and transactions.
Analysis of the housing authority's grant applications
and reports to IUD on the program's activities.
./ Review of the,Contra Costa County Sheriff Depart-
ment's costs to perform under its contracts with the
housing authority for additional law enforcement.
Interviews of selected housing authority, sheriff depart,
mens, and HUD officials, and residents at targeted
housing developments.
This report reflects our consideration of auditee comments.
We obtained and evaluated written comments from the
housing authority as well as verbal comments made by its
officials on November 5, 1998.
We conducted the review in accordance with generally
accepted government auditing standards.
99-SF-209-1002 Page 2
Finding 1
Ineligible Costs Were Charged to Grants
The HACCC charged ineligible costs totaling $24,106 to the DEP grants. The ineligible
costs included $14,986 for a summer arts program which dict not meet program guidelines,
$3,1.10 for indirect audit costs, and $6,010 in consulting fees for preparing a grant applica-
tion. This occurred because responsible officials were not sufficiently knowledgeable of
program requirements or were not fully aware of how DEP funds were used. The ineligible
charges reduce the amount of funds available for the drug elimination activities.
The notices of funding availability (=UFAs) for the drug
Program La
Unapproved La 'Youthcked Drug elimination program state "...The dissemination of drug
education information, the development of peer leadership
Education Component skills, and other drug prevention activities must be a
component of youth services." Thus, if any expenditures of
DEP funds are made for youth services including recre-
ational, cultural, and other activities involving housing au-
thority youth,the services must include drug education.
In addition, the NOFAs state "...the causes and effects of
illegal drug usage must be discussed in a formal setting to
provide both young people and adults the working
knowledge and skips they need to make informed decisions
to confront the potential and immediate dangers of illegal
drugs."
HACCC charged the 1996 grant $14,986 for a summer arts
program for youth that did not include a drug education
component. The Arts Alive program, organized by the Arts
and Culture Commission of Contra Costa County, was
designed to provide art and drama classes to teenage resi-
dents of the HACCC housing developments. Classes were
held in the summer of 1996 at the Martinez Police Activi-
ties League (PAL) Center and at a park in the Bay Point
area.. The Arts Alive program did not include drug preven-
tion activities or disseminate drug education information to
the participants as required. Both the Arts Alive site super-
visor and the executive director of the :Martinez PAL ad-
vised that they were not aware of the requirement that DEP-
funded youth activities provide drug education to partic-
ipants.
The HACCC director of housing operations, who manages
HACCC's DEP, said that funding of the Arts Alive
Page 3 99-SF-209-1002
Finding 1
program helped to prevent the use of drugs by keeping the
young residents busy during the summer, Nevertheless, the
Arts Alive program did not provide drug education to its
participants as required by the NOIFA. l°urdher, the pro-
gram was not part of the approved grant application and
most of the participants did not come from the targeted
housing developments with the more serious drug
problems. (See Finding 2 - program changes made without
informing HUD.)
The NOFAs permit only direct costs under this program.
Indirect Audit Costs and prohibit indirect costs as defined in OMB Circular A�-
Charged to DEI' 87. A-87 defines direct costs as those that can be identified
specifically with a particular final cost objective; and
indirect costs as those incurred for a common or joint
purpose benefiting more than one cost objective, and not
readily assignable to the cost objectives specifically bene-
fited. Therefore, costs charged to the grants must be incur-
red specifically to accomplish DEP objectives.
The I-IACCC charged a total of$3,110 to its DEP grants for
its financial audits for the fiscal years ending March 31,
1995, 1996, and 1397. This amount represents approx-
imately 7.4% of the total audit fees for the three audits.
These audits covered the housing authority's overall opera-
tions and were incurred for a common purpose not readily
identifiable to a specific cost objective. Thus, the audit fees
are ineligible as they are indirect costs benefiting the hous-
ing authority as a whole.
The director of housing operations advised that the
allocation of the audit cost was made by the fiscal director.
(The fiscal director was not available to comment as she
was on extended medical leave during the audit.) The
director also advised that she did not review the allocation
of the auditing expense to the DEP before it was booked.
The NOFAs also do not allow funding for costs incurred
DEP Funds Used to prior to the effective date of the grant agreements including
Prepare Grant consulting fees related to the development or actual writing
Application of a grant application. These charges are also ineligible
under subpart 761.15 of Title 24 of the Code of Federal
Regulations. Additionally, the NOFAs state that Circular
A-87 must be followed in determining the reasonableness
and allocability of costs charged to the program. A-87
99-SF-209-1002 Page
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Finding I
allows grant funds to be used for the preparation of grant
proposal costs, but only as indirect costs. Thus, they are
also not eligible since indirect costs are prohibited.
The HACCC used $6,010 of 1996 DEP funds to pay a
consulting firm to prepare the application for the 1996
grant. Since the cost for the preparation of the grant
application was incurred prior to the awarding of the grant
and is an indirect cost under A-87, it is an ineligible use of
DEP funds.
The director of Dousing operations said that she was aware
that the cost for the grant application was not eligible. She
explained that the charge to the 1996 grant was made by the
fiscal director who may not have been aware this was
inappropriate.
Auditee Comments The HACCC concurred that the audit and grant application
and OIG Evaluation costs were inappropriately charged to the DEP, but did not
concur with the exception with the summer arts program.
The HACCC response states that the summer arts program
contained a minimal amount of drug education. However,
our review of the program did not show any indications of
drug education having been provided to the youth
participants.
The housing authority believes that, since drug education
was being provided with its other DEP North Richmond
recreation activities, they did not have to provide additional
drug education specifically within the summer arts pro-
gram. We disagree. The ten-week summer arts program
was separate from the other recreation facilities provided to
the targeted residents of Las Deltas. Further, the contracted
program was held in a different city and the majority of the
participants (69%) were not from the original North
Richmond and Rodeo target sites. As a result, most of the
youth would not have been exposed to any education
information that may have been provided as part of the
North Richmond recreation program.
Page S 99-SF-209-1002
Finding I
The housing authority refers to the requirements for
midnight basketball and other physical recreation programs.
However, these programs have no bearing on the grant
requirements for the DEP. In addition, the NOFA criteria
referenced by the housing authority do not mitigate the
need for drug education. The housing authority is citing
passages that list additional DEP prevention requirements.
The drug education requirement was to be provided in
addition to meeting the criteria noted by the housing
authority.
The HACCC response implies that the summer arts
program was provided at a DEP target site. However, the
summer arts program was held in Martinez, an area not
identified by HACCC on the DEP applications as a targeted
area requiring drag elimination assistance. The housing
authority response also implies that all participants were
part of the population targeted by the DEP. However, only
31% of the participants were from either of the two sites
targeted by the DEP: the Las Deltas housing project in
North Richmond and the Mayo Vista housing project in
Rodeo. In addition, only the ?`forth Richmond youth were
transported to Martinez by the recreation supervisor from a
drug-infested community.
At the exit conference, the housing authority stated that the
recreation supervisor provided drug prevention education
and information to the participants from North Richmond.
This was performed while he was driving the North
Richmond youth from the Las Deltas housing project to
Martinez, There was no support available to show that this
occurred. The recreation supervisor had previously
informed us that he provided drug education to the North
Richmond residents every two weeks during group forums
held at the Las Deltas recreation facility. It is unlikely that
he would have been providing drug education during the
transport between North Richmond and Las Deltas. Also,
the HACCC's response does not address the other 69% of
participants in the program.
HACCC states that the drug education component was
evident by the North Richmond youth painting a `mural' to
a friend of theirs who had been slain (the painting is
currently being kept in storage by the housing authority).
99-SF-209-1002 Page 6
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Finding 1
The program coordinator indicated the youth were not
instructed to paint an anti-drug theme.
During the exit conference with the housing authority, the
HACCC indicated that the youth from Martinez and
Baypoint received a form of drug education because the
instructors in the program acted as role models. This does
not constitute sufficient drug education as required, by the
NOTA. It requires drug prevention information to be
disseminated along with other drug prevention activities.
The NOFA also indicates that the causes and effects of
illegal drug usage must be discussed in a formal setting to
provide both young people and adults the working
knowledge and skills needed to make informed decisions to
confront the potential and immediate dangers of illegal
drugs. Our discussions with the program coordinators
indicated they were not even aware that a drug education
component was a required part of the program.
Thus, we concluded that the youth participants from Bay-
point and Martinez did not receive any drug education dur-
ing the summer arts program. Also, there was no substan-
tive evidence that the North Richmond youth received drug
education as part of the summer program.
The housing authority took exception to the cause given in
the finding. It did not believe the problems arose due to
staff not being knowledgeable about program requirements
and not knowing how DEI' funds were used. At the exit
conference, HACCC officials expressed the belief that the
issues concerning the ineligible audit report costs and grant
preparation occurred due to an "internal control problem."
We agree that there was an internal control problem which
led to the inappropriate costs being charged to the grant.
However, we also believe that the director of finance was
not sufficiently aware of the program. requirements. She
was the person primarily responsible for determining where
the housing authority's costs would be charged, including
amounts charged to the DEIN grant. Although the
operations staff knew the audit and application preparation
costs should not be charged to the grant, they were unaware
that these costs had been charged to the grant. As a result,
we believe the cause listed in our finding is consistent with
the information available.
Page 7 99-SF-209-1002
Finding 1
In addition, we believe that the NOPA clearly indicates that
drug education should have been provided as part of the
youth recreation program. Since the housing authority
believes that this was not required, in our opinion the staff
misinterpreted the NOFA requirements. Thus, we con-
cluded that they were not sufficiently knowledgeable con-
cerning the program requirements.
We recommend you:
Recommendations
1A. Require the housing authority to return $24,106 and
appropriately adjust its accounting records and
reports to HUD on status of DEP funds.
113. Require the housing authority to improve
management procedures by requiring the
appropriate progra-n manager, who is responsible
for being aware of specific program regulations, to
review and approve uses of funds for programs
under his or her control.
1 C. Provide technical assistance to HACCC officials on
what activities and costs are ineligible under the
program.
99-SF-209-1002 Page 8
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Finding 2
Program Changes Were Made Without
Informing in HUD
The HACCC made substantial changes to its DEP program without notifying HUD and
obtaining required approval. The changes included redirecting $68,831 earmarked for its
prevention and treatment program to law enforcement, and providing $49,078 in services
to non-targeted Dousing developments. This occurred because staff slid not believe that
HILL was required for be informed. The changes reallocated funds away from activities and
residents targeted for IEP assistance.
Part 761 of Title 24 of the Code of Federal Regulations,
i
Implementation ante n with
t Be drug elimination program grant, and the NOFA state that
in Accordance with the each application must include a plan for addressing drug-
Approved Ulan related crime at the housing development(s). If the grant
plan, approved budget, and timetable, as described in the
approved application, are not operational within 60 days of
the grant agreement date, the grantee must report the
revised plan and timetable to HUD for approval. The
grantee is responsible for ensuring that grant funds are
administered in accordance with the approved budget,
budget narrative, plan, and activity timetable. The grantee
roust submit semiannual reports discussing any problems
encountered in implementing the plan and how they were
addressed. They must also describe ether programs that
may have been initiated, expanded, or deleted as a result of
the plan:. HUD may impose sanctions if the grantee
proposes substantial changes that may have affected the
original selection for funding.
Prevention. and The HACCC incurred expenses exceeding the available
Treatment Funds budgets for law enforcement applicable to the 1995 and
Redirected to Law 1996 IEP grants. As a result, HACCC inappropriately
Enforcement reclassified law enforcement expense of $6,264 as the
prevention and treatment activity. In addition, the HACCC
withdrew grant funds budgeted for prevention and treat-
ment totaling $62,567 for expenses which were not incur-
red to cover the excess lave enforcement expense. These
program changes represent 20% of the total funds requested
under the 1996 grant.
The HACCC contracted with the local sheriff's office for
additional law enforcement services over the normal
I'age 9 99-SF-209-1002
Finding 2
baseline services provided. Both the 1995 and 1996 grants
were supposed to fund an entire year of law enforcement
costs. The fixed contract amount ($268,974) exceeded the
amount budgeted and requested from HUD on the 1996
DEP grant ($204,434) by $64,540. Similarly, the previous
year's contract ($184,936) with the sheriff's department
exceeded the budget ($170,372) by $14,564. In total,
HACCC incurred $79,104 in law enforcement expenses
over the available DEP budget.
These problems occurred because HACCC staff prepared
the DEP application using unreasonable cost estimates,
despite the HACCC having previously contracted with the
sheriff's department for services. The previous contract;
applicable to the 1994 grant, included $85,186 for each
deputy for an' entire year. This amount increased to
$92,468 on the contract applicable to the 1995 grant.
However, on the 1995 application the HACCC only bud-
geted $85,186 for each deputy, not taking into account the
increase in the salaries. Then for the 1996 grant, HACCC
only budgeted $68,145 for each deputy.
The HACCC should have been aware at the inception of
the contracts with the sheriff s office that the grant funds
could not cover the costs. The contract applicable to the
1996 grant was signed and went into effect on January 7,
1997. The 1996 grant application had been submitted to
HUD in June 1996. The contract applicable to the 1995
grant was signed on August 9, 1995, The 1995 grant appli-
cation had been submitted in April 1995.
By October 1997 the HACCC ran out of law enforcement
funding applicable to the 1996 grant, even though the
contract with the sheriff department ran through December
1997. Since funds were available in prevention and treat-
ment from the 1995 and 1996 grants, they were used to
cover the law enforcement expenses incurred.
As a result, in September 1997 HACCC reclassified $6,264
of recorded law-enforcement expense to other contract costs
and subsequently withdrew these amounts from the preven-
tion and treatment budget.
Further; the HACCC withdrew an additional $159,875
from the prevention and treatment budget during 1997
99-SF-209-1002 Page 10
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Finding 2
which exceeded expenses by $62,567. According to the
request for withdrawal submitted to HUD, these with-
drawals were applicable to the period of March 27, 1997 to
January 27, 1998. However, the actual expenditures incur-
red by the HACCC for prevention and treatment for that
period were only $97,308. Actual expenses matched the
amounts requested from the grant for the period of March
27, 1997 to August 1997, but the amounts requested be-
tween September 1997 and January 27, 1998 exceeded the
actual expenses by $62,567. Although the director of
finance was not available for comment, the acting director
of finance agreed that the funds were withdrawn to cover
law enforcement expenses.
HUD was never informed that the law enforcement costs
are reallocated to the prevention and treatment urograms.
The funds were not used to support the youth recreation
center and drug prevention center as originally intended. In
addition, if the housing authority does not inform HUD of
program changes or difficulties, HUD cannot determine
whether the DEP funds were being used effectively, or
providing timely assistance.
SerThe HACCC redirected $49,078 from housing develop-
Non-Targeted
geted ted #° ments targeted in its 1995 and 1996 DEP grant applications
:tievelop gent to other developments, in areas not identified by HACCC
Developments as having high drug-related crime. This included $34,092
for a skills training coordinator and a summer arts program
costing $14,986.
The 1996 grant provided for the hiring of a skills training
Computer Training coordinator to develop and run a computer training center
Services at the Bayo Vista development in Rodeo. The coordinator
position was also included in the 1997 application. The
position was filled by members of the local Police
Activities League (PAL) that maintains an office at
HACCC's Alhambra Terrace development in Martinez,
California, near HACCC's central office.
The coordinator position was primarily used to provide
administrative and training duties to the PAL center in
Martinez. The first coordinator informed us that he spent
only about four of his thirteen months at the Bayo Vista
facility. During those lour months he estimated that only
20% of his time was actually devoted to the .Bayo Vista
Page d 1 99-SF-209-1002
Finding 2
center. So only about 7% ($2,007) of his time benefited
Bayo Vista. further, the current coordinator has not per-
formed any activity at the Rodeo center during her four
months in the position, so none of her salary benefited
Bayo Vista. As a resalt, approximately $34,092 (94%) of
the $36,099 charged to the DEP grant, for services between
October 1996 and April 1998, did not benefit the Bayo
Vista facility. The HACCC had not notified HUD of its
intention to use these DEP funds at the Martinez facility.
Although a basic computer center was established at Bayo
Vista, at the time of our review the facility was not in
operation, and apparently had not been in use for several
months. further, the computers that were available were
generally outdated and not fully operational. The director
of operations believed that the skills training coordinator
was on track with the development of the Bayo Vista train-
ing program and that setbacks were caused by turnover in
the position. HACCC staff also indicated that they were
waiting for new computers to be supplied before continuing
with the training program in Rodeo.
Arts Program The HACCC spent $14,986 on a summer arts program in
Martinez without obtaining HUD's approval. The ap-
proved 1995 grant application did not include this program,
and said that drug prevention activities were to be at Las
Deltas in :North Richmond. The program was charged to
the 1995 DEP grant as other contract costs, even though
there were no funds budgeted in this cost category in the
grant application. Further, the program did not focus on
Las Deltas residents. Most participants came from the
Martinez and Bay Point developments. Only 31% of the
participants were from Las Deltas.
The HACCC briefly mentioned the program in one of the
semiannual reports, stating that the Las Deltas youth were
invited to participate in the housing authority and PAL
collaboration. However, the report did not mention that the
DEP grant funded the program.
(As discussed in finding 1, we also considered the summer
arts program to be ineligible because it did not include a
required drug education component.)
99-SF-209-1002 Page 12
Finding 2
HACCC believed that it was acceptable to lake changes to
the approved program without notifying HUD of the
changes. As a result, the funds used for activities in Mar-
tinez reduced services to residents of developments identi-
fied as having high drug-related crime.
Auditee Comments Summer Arts Program
and 01G Evaluation
The Dousing authority indicated that the audit report
questioned the location of the summer arts program.. The
issue with the summer arts program, however, was not that
the program was held at Martinez. `Rather, the program
mainly serviced participants from areas which had not been
targeted on the grant application or identified as areas
having high drug-related crime. In addition, HUD was not
properly informed about the DEP funding services for
participants from non-targeted areas.
Regardless, the housing authority should not have charged
the grant for the entire cost of the program even if the
program had contained a drug education component. Since
only 31% of the youth in the program were from targeted
areas, we believe that the DEP should only have funded
31% of the cost, unless HUD was properly informed that
the program would mainly serve non-targeted participants.
Reallocation of Funds
The HACCC indicated that the intervention program did
not suffer as a result of the reallocation of$62,000 from the
prevention and treatment activity funds to cover law
enforcement expenses because it claims there were no
reductions in staff and all significant activities were
sufficiently performed.
It is true that there were no reductions in the staff working
in prevention and treatment. However, this does not mean
that there was no effect on the program. The 1994 to 1996
DEP grants requested over $16,000 for training and travel.
Our analysis of the DEP expenses attributable to those
years indicated that the PHA only spent $993 in travel and
training for its .DEP staff: Also, the 1995 and 1996 grants
requested a combined $24,675 for recreation and program
Page 13 99-SV-209-1002
Finding 2
supplies, equipment, and stipends while the housing
authority only spent $10,547 in these areas. Tlie equipment
at the recreation facility mainly appeared to be composed of
worn, donated equipment. The (ands used to finance the
law enforcement could have been used to rourchase new
equipment and supplies for the youth or provided training
for the employees.
In addition, removing funds from prevention and treatment
effected the period in which the North Richmond Project
Pride center was able to operate on the funding left
available. The housing authority had to begin drawing
from the succeeding year's grant sooner than previously
anticipated. The housing authority began applying IEP
prevention and treatment expenses to the 1996 grant for
September 1997 (based on the LOCCS requests for funds).
Ey March 31, 1998 the housing authority had already
withdrawn or expensed $131,100 from prevention and
treatment applicable to the 1996 grant. This only left
$3,755 remaining in the 1996 grant to cover April 1998
prevention and treatment expenses. The period of Septem-
ber 1997 to April 1998 is only eight months while the
funding had been intended for an entire year. Only $69,034
of the $134,856 budgeted for prevention and treatment
under the 1996 grant was actually spent on those activities.
Most of the reallocation, $65,977, came from the $126,956
budgeted for payroll costs. In addition, the prevention
funds for the 1995 grant only lasted ten months, between
November 1996 to August 1997. If the PHA had not
reallocated the funds, the prevention staffs' payroll could
have been maintained for over half a year. As a result, we
believe there was an effect to the prevention and treatment
program.
The housing authority indicated that the budget problems
occurred due to a higher rank of deputy having been
assigned by the sheriff to the targeted projects. however,
for the 1996 DEP grant, the housing authority significantly
underbudgeted the benefits attributable to the deputy
sheriffs, using only a 30% rate when it should have been
about 59%. The estimate also did not anticipate any
operational costs for the deputies which typically ran
between $6,000 to $7,000 for each deputy.
99-SF-209-1002 Page 14
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Finding 2
The HACCC stated that HUD was aware of what the
housing authority was doing since contracts and agreements
with the sheriff were included in the DEP applications.
Nevertheless, we noted that the DEP application did not
have the contract applicable to the grant in question. The
application included the contract applicable to the prior
grant. The prior law enforcement contract did not provide
HUD with sufficient information to know that the PHA was
having problems with its proposed law enforcement budget.
In addition, even the applicable contract would not have
provided HUD with sufficient information to show the
housing authority was planning to use prevention and
treatment funds to make up fore underbudgeted law
enforcement.
The request for withdrawal from LOCCS submitted to
HUD listed expenses for prevention and treatment activities
when they were actually law enforcement expenses. There
was also no mention on the semiannual reports indicating
that law enforcement costs were being paid from prevention
and treatment funds. Finally, HUD staff informed us that
they were unaware of the reallocation of the fends.
The housing authority should have specifically informed
HUD of its intention to use prevention funds for law
enforcement. HUD could then make the determination
whether the transfer was appropriate.
Skips Training Coordinator
The housing authority maintained that no DEP funds were
redirected to non-targeted developments. However, the
DEP application requested funds to establish and operate a
learning center in Rodeo at the Bayo Vista housing project,
not in Martinez as the housing authority indicated. Also,
the 1996 DEP grant application did not mention the
coordinator would provide services to both Martinez and
North Richmond. In fact, the Martinez and North
Richmond centers were supposed to act as a model for the
facility at Bayo Nista. The position description included in
the 1996 DEP grant application listed Rodeo as being the
only work-site. The subsequent grant application for 1997
did list Rodeo and Martinez as the work sites, but nowhere
in the document did the HACCC properly inform HUD that
the program was going to be primarily operated out of
Page 15 t}()-Sl'--209-110417
Finding 2
Martinez and principally service residents in those areas.
The information the HACCC referenced in its response did
not provide sufficient information to indicate that services
were to be principally provided at the Martinez facility.
The HACCC stated that the staff turnover led to the Rodeo
facility shutting down. However, this does not explain why
the initial coordinator wormed primarily at Martinez and the
current coordinator had not even visited the Rodeo site after
months in the position, if the skills training coordinators
were not providing services to only the Rodeo facility,
HACCC should not have been paying for their entire
salaries out of the grant funds without informing HUD,
The housing authority did not inform HUD of the problems
it was experiencing staffing the position. If the housing
authority wanted to provide a paid position for Martinez,
then it should have obtained HUD's permission or used
non-DEP funds.
We found no evidence that the current coordinator was
providing continuing resources to the Rodeo computer
facility. Also, it is not apparent how the current
coordinator could have been providing technical assistance
to Rodeo when the facility was not in operation and the
resident manager was not familiar with the program. There
were no indications that training was being provided to
Bayo Vista residents offsite.
The housing authority argued that there are no limitations
in the ' O A as to where services can be provided, which
they believe allowed them to provide the services in
Martinez. however, we do not believe that the targeted
residents were receiving any benefit by the HACCC having
provided services to residents of a non-targeted area
(Martinez) . The housing authority was required to identify
targeted developments and show that these areas have high
drug-related crime as part of its,,grant application. In this
respect, there were restrictions on where and to whoa; the
services were provided. Based on the grant applications
approved by HUD, the services funded by the grant needed
to be provided to the targeted residents of Bayo Vista.
The housing authority has indicated that participants will
receive services off-site. We believe, however, that the
housing authority and HUD need to evaluate whether it is
99-SF-249-1002 Page 16
Finding 2
more beneficial for the targeted project residents to go off-
site
ffsite to receive services, or if residents can be served more
effectively by bringing the facilities to the targeted
community.
The housing authority will Need to inform HUD about the
development of the coordinator position so that HUD can
determine whether activities are being provided for the
appropriate participants. It is unclear from the response
what activity will take place at the Rodeo computer center
if the coordinator spends the majority of her time in
Martinez.
J
Recommendations e recommend you:
2A. Require the housing authority to establish
procedures to ensure HUD is notified before
changes are made to programs and activities
described in the approved DEI' application, and to
not proceed with the changes until HUD approval is
obtained. Impose appropriate sanctions or, the
housing authority if in the future it does not obtain
HUD approval prior to implementing revised plans.
2B. Determine the propriety of law enforcement costs in
excess of the approved grant application, and have
the HACCC return any funds not approved.
2C. Determine the propriety of the PAL personnel costs
not used to service the targeted developments, and
have the housing authority return funds not
approved.
Page 17 99-SF-209-1002
Finding 2
(BLANK WAGE}
99-SF-209-1002 Page 18
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Finding 3
The Housing Authority Did NotAdequately
Assess or Report on Its DEP
The HACCC did not adequately evaluate the progress of its program. It also included
some unreliable and incomplete information in its semiannual reports to HUD. This
occurred because the housing authority had not placed a priority on these functions. As a
result, the HACCC and HUD cannot properly assess the program's effectiveness.
The objective of the drug elimination program is to reduce
Program Assessment drug-related crime in and around public housing. Appli-
cants for grant funds must develop a comprehensive pro-
gram to eliminate drug-related crime in their developments.
To help achieve this desired outcome, sound management
practices roust be implemented. Management needs to use
a system to measure program effectiveness. The elements
of such a system include the setting of performance
standards. These standards are quantifiable expressions of
program objectives. Such a system also requires
monitoring progress in achieving these objectives. This
involves the collection of data and evaluation of actual
versus desired results. DEP requirements are based on
these principles.
The NOFAs require applicants to develop performance
measurements and describe evaluation methods, including
types of data to be tracked. They also require semiannual
reports to be submitted to IJUD evaluating the grantee's
overall performance against its plan. The reports need to
discuss. (1) changes or lack of change in crime statistics or
other indicators, (2) successful completion of the strategy
components in the plan; (3) any problems encountered in
implementing the plan and how they were addressed; (4) an
evaluation of the rate of progress to expectations; (S) the
grantee's efforts to encourage resident participation; and (6)
descriptions of any other programs that may have been
initiated, expanded, or deleted. The evaluation is to be used
to modify activities to make there more successful or to
identify unsuccessful strategies.
The HACCC was not providing adequate information to
11rog
Inadequate to I11til)ing of l 11 l) concerning its DDI' programs. The l IAC"CC° was not
iBr���►rc�sw to l l ti 13
Page 19 99-SF-209-1002
Finding; s
evaluating its progress or reporting changes, additions, and
deletions,
No Formal Evaluation HACCC staff indicated that they had not performed a
Provided formal evaluation of the DEP plan's progress. This is
despite requesting funds in the 1994 DEP grant application
for an evaluation to be performed. (These funds were
actually used to prepare a succeeding year's grant applica-
tion: see finding 1). Nevertheless, in the program's design,
HUD intended that the grant application and reporting
processes would serve this purpose.
The grant applications submitted to HUD stated that the
housing; authority would evaluate the progress of the DEP
based on the quantifiable goals and objectives listed in the
applications, resident surveys, and discussions with staff
and resident councils. Several of the quantifiable goals
were based on comparing the results of the successive resi-
dent surveys,
Nevertheless, the semiannual reports applicable to the 1994
to 1995 grants described activities, but did not show if the
quantifiable goals contained in the application were
achieved. This was principally due to the housing; authority
not collecting information which could show whether the
goals were achieved. When information was obtained, it
was not compared to the objectives. further, data included
in the DEP applications and semiannual reports was not
consistent enough to :make an accurate evaluation.
Crime data from the sheriff reports, included in the
semiannual reports, was not adequate to fully evaluate
crime levels and determine whether the goal of reducing
drug-related crime was achieved. The 1995 and 1995 IEP
applications both listed the goal of reducing dr=ug-related
crime 15 to 20%compared to the prior years figures,
The quarterly crime reports provided by the sheriff did not
include overall statistics for the year, and no comparison
was made to the'prior year to answer whether the crime
reduction goal was achieved. Several of the quarterly
reports for 1995 and 1996 were missing an attachment.
These would show some crime rate statistics for the devel-
opment, county, and city. The missing information. makes
99-SF-209-1002 Page 2G
Finding 3
it difficult to compare the data for an entire year and deter-
mine whether the crime reduction goal was achieved.
In addition, the sheriff's reports Compared county and city
crime to a different period than the development's crime.
As a result, it is difficult to determine whether quarterly
changes in the crime rates at the project were merely
reflecting changes in the community at large or if improve-
meet was due to the efforts of the DEP-funded deputies.
There was also no crime rate information for the develop-
ment relating to the period before the IEP-funded deputies
were available, so an overall comparison of the improve-
ment in crime could not be made.
Finally, the 1994 crime related goals included increasing
the resident-reported crimes by 25%, decreasing `spotters'
by 25%, and decreasing gang membership by 10%. Infor-
mation related to these goals was not listed in the sheriff's
report, and the HACCC did not present this information
anywhere else in their semiannual reports or applications.
In addition, resident survey questions did not consistently
relate to the quantifiable goals, so an evaluation of the suc-
cess of the objectives could not be made.
The 1995 and 1996 survey-related goals listed on the
application included.: increase resident confidence in the
DEP-funded deputies by 25-30%; increase resident percep-
tion of deputy effectiveness by 50%; increase youth posi-
tive response for deputies (various percentages listed); and
increase resident perception of prevalence of substance
abuse by 50%.
However, only the prevalence of substance abuse was actu-
ally included in the 1995, 1996, and 1997 survey question-
naire in a manner that would produce a quantifiable meas-
urement. Our analysis of the survey results indicated a
general increase in positive responses between 1995 and
1996. However, there was no significant improvement
between 1996 and 1997. In either case, the goal of improv-
ing the residents perception of substance abuse by 50% was
not met.
The questions relating to the other goals were stated in such
a way that they were not quantifiable and could not be
Page 21 99-SF-209-1002
Finding 3
compared to the successive surveys, such as, "what do you
appreciate about (the deputies') work'?" and "what do you
think could improve their work?"
The HACCC staff stated that they considered obtaining a
contractor to formally evaluate the program; however, the
cost of the evaluation was too great. in our opinion, HDD
expects the grantee to evaluate its performance. The hous-
ing authority needs to address the goals listed in the apply
cation using the methods it identified.
We spoke with 10 residents from Bayo Vista and 10 from
Las Deltas to determine their perception cel the success of
HACCC's DEP'. Most of the residents contacted at the
two housing developments were aware of the drug
prevention and treatment programs being offered by the
Dousing authority, and 20% indicated that they had found
the programs personally beneficial. in addition, at Las
Deltas most of the residents interviewed stated that they
have noticed a decrease in drug-related crime which has
made them feel safer in recent years, and increased their
duality of life. Half of the Las Deltas residents felt
increased satisfaction with the housing authority's DEP
programs. However, half of the Bayo Vista residents we
spoke to felt that crime was increasing at their development
and most felt less safe.
Nevertheless, without the necessary data and proper
evaluation of its DEP programs, the HACCC could not
show whether its use of grant funds resulted in the
reduction of drug-related crime at the two targeted Dousing
developments, or that the funds were used in the most
effective manner, Further, HUD did not receive the
necessary data to properly evaluate the 1 IA.0 CC's per-
formance and compliance with grant objectives.
' Our sample is too small to make a definitive conclusion concerning the perceptions of all residents. residents
were selected on a judgmental basis favoring these that had lived at the developments for several years or more. we
presumed they could provide a more historic perspective than if we selected residents at randorn.
99-SF-209-1002 Page 22
Finding 3
The HACCC was not identifying changes or problems
Ad Additions,
an of Changes, encountered with its DEP program activities. The HACCC
HUD Additiomis, and Deletions did not provide any information concerning problems with
to law enforcement casts, the computer center in Rodeo, or
the re-targeting of DEP funds to Martinez.
• The Dousing authority ander-budgeted the law
enforcement expenses for 1995 and 1996, so it reduced
prevention and treatment activities.
• Although HACCC did establish a basic computer center
in Rodeo, the center was down for several months due
to the loss of its training coordinator. In addition, the
housing authority decided to change focus to its Mar-
tinez housing development.
• The HACCC changed part of its focus from the targeted
developments when it contracted for a summer arts
program. Although the program did service some Las
Deltas residents, it was held in Martinez and mainly
served youth in that area.
(These matters were discussed in more detail in finding 2.)
In addition, the 1995 DEP included $6,145 in its budget for
a computer trainer and resident trainee. The HACCC can-
celed time programa without informing HUD.
Unreliable Information The information that was provided to HUD on the semi-
on
reports was not always reliable. The figures show-
ing Reports resident participation could not be confirmed. In addi-
tion, the crime statistic data was not adequately presented.
The figures reported on resident participation could not be
Unsupported Participation confirmed. The HACCC could not satisfactorily demon-
Figures stratc how it detierniincd the Figures. The reports generally
listed similar figures on each of the semiannual reports,
which made them appear to be estimates. This was con-
firmed by the Project Pride office coordinator, who indi-
cated that the housing authority staff'never requested actual
participation figures.
Page 23 99-SF-209-1002
Finding 3
The HACCC did have intake towns showing what services
were provided to residents. Participation reports were
prepared by the Project Pride office. However, they were
not used in preparing reports submitted to BUD. A com-
parison of these reports and the resident intake lonns shows
that the HACCC was significantly over-reporting the
number of residents participating in several of its drug pre-
vention programs.
We reviewed all the available intake forms for the period of
January 1, 1997 to September 31, 1997. We counted and
classified the services provided to residents which were
related to education, drug counseling, employment services,
and family support. Services applicable to the period of
January 1, 1997 to .lune 30, 1997 were compared to the
participation figures in the semiannual report for January 1,
1997 to June 30, 1997.
The participation reports included in the semiannual report
for the period ending June 30, 1997 stated that 20 residents
participated in drug counseling, 20 in substance abuse
education, 20 in family support, and 30 in adult education.
The housing authority listed "unknown" for adult education
and case management referral. Review of the intake forms
(filled out when residents receive services) at the Project
Pride center indicated five residents received drug
counseling, four received family support, and five received
education services. No other information was available to
support the housing authority's larger participation figures.
1n the 1996 DEP application, the HACCC identified
quantifiable goals of providing drug support services to
fifteen to twenty-five residents and education (computer
and GED classes) to at least fifteen adults during 1997.
The unsupported participation reports included in the
semiannual reports indicate that these two goals were rnet.
However, the intake forms reviewed indicated otherwise.
Residents are participating in prevention, activities.
However, accurate reporting is essential for the HACCC
and HUD to determine whether programs are useful to the
residents and whether additional efforts are needed to
increase participation or to revise program design and.
content.
Problematic Crime Data }gage 24
Provided to HUD
Finding 3
The crime statistics report HUD-52356, provided by the
HACCC, contained inaccurate information. We reviewed
the reports submitted from 1994 to 1997 to HUD. The
HACCC did not properly distinguish crime statistics
between the targeted housing developments and the com-
munity as a whole. The HACCC also dict not obtain all the
relevant crime statistics data available from the sheriff's
office. Although crime reports from the sheriff's office
were included in the semiannual reports, these reports were
insufficient to determine whether the quantifiable goals to
reduce crime were accomplished and did not provide the
information to properly complete the HUD-52356 report.
The HUD-52356 required crime information for develop-
ments receiving funding and the surrounding community.
The specific number of occurrences were required for sev-
eral types of drug-related crime, such as murder and rob-
bery.
The sheriff's report generally showed the activity of the
deputies funded by the grant, such as the number of traffic
enforcements, field interviews, arrest/citations, reports writ-
ten}, etc. Still, it was not readily apparent from reviewing
this information whether crime increased or decreased in
the area. This specific information was not separated
between the development and community wide. It also did
not include information required on the HUD-52356 such
as total calls for service, open-air drug markets observed,
drive-by shootings, and vandalism.
We were able to obtain additional detailed reports from the
sheriff's office, giving individual crime report statistics for
the housing developments and the surrounding commun-
ities. The reports showed specific numbers of incidents.
such as .murders, shootings, vandalism, rapes, robberies.
drug possessions, selling drugs, etc. These reports could
have been used by the HACCC to properly fill out HUD
form 52356 and evaluate whether they were meeting their
crime reduction goals. These crime statistics generally
showed a lack of consistent improvement over the last three
years. However, there were no crime statistics available for
the developments prior to the additional deputies funded bN
the DEP. As a result, the overall effectiveness of this ele-
ment of HACCC"s DEP effectiveness could not be deter-
mined.
Page 25 99-SF-209-1302
Finding 3
Discussions with the residents indicated that the
developments were safer during the day while the extra
deputies were present. However, several indicated a need
for additional law enforcement activity during the night.
when most of the crime takes place. In addition, the 1995
survey conducted by the HACCC showed that the tenants
wanted night patrols. The deputies generally patrol during
the day. The crime statistics and the tenant discussions
indicate that the law enforcement may not have been
provided in the most effective manner to ensure the greatest
reduction in drug-related crime at the developments.
The inadequate reporting issues arose because the housing
authority did not. place a priority on evaluating program
results, obtaining reliable data, or reporting required infor-
mation to HUD concerning its DEP programs. HACCC
relied on staff observations to determine whether the pro-
grams were providing adequate assistance to residents.
This was not in conformance with the grant applications,
which also called for tracking crime and participation data
to determine whether DEP quantifiable objectives «•ere
met. As a result, the HACCC and HUD cannot properly
determine whether, DEP funds have been utilized effec-
tively.
Auditee Comments Participation Figures
and OIG Evaluation
The housing authority contended at the exit conference that
the participation report submitted to HUD was supported
by additional records included in the semiannual reports.
However, these additional records only deal with the
recreation program participation figures, and we did not
question this area in our report. We tested the intake forms
and reviewed the logs produced by the Project Pride coor-
dinator. The additional participation records included in
the semiannual reports could not be used to confirms the
adult drug treatment and intervention figures in question
listed on the participation: report required by HUD. As a
result, HUD and the HACCC did not have accurate
information to determine the progress of the DEP.
99-SF-209-1002 Page 26
Finding 3
Crime Statistics and Evaluation.
The housing authority believed that the community crime
statistics were compared to the previous quarter on the
sheriff reports. However, the sheriff's reports did not
compare the community activity to the previous quarter.
Only the project's statistics were compared to the previous
quarter. The community statistics were compared to the
base year. (As evidenced directly in the response, the
period of July 1, 1989 to June 30, 1990 was the base year.)
Based on this information, we could not determine whether
improvements or increases in crime were due to activities
performed by the deputies or were general changes in the
communities at lame.
No project base year information was available for Las
Deltas or Bayo Vista. The HACCC stated that the project
base year information was not available because tete sheriff
had no reason to track this information. We believe that the
housing authority should have requested the sheriff to track
base year information before the grants were put into
operation. Since the housing authority did not do this, it
cannot show the severity of the drug crime problem at the
targeted projects before the deputies were provided and
compare this to the current level of crime.
The housing authority believed it reviewed and reported
this information to HUD. However, the HACCC never
actually evaluated the results in terms of its quantifiable
goals to show whether they were being accomplished.
Nowhere in the semiannual reports does the housing
authority compare the crime figures to the previous year's
and analyze whether they accomplished their crime-
reduction goals. This defeats the purpose of identifying
goals in the applications and denies both the housing
authority and HUD a key tool in determining the program's
impact.
At the exit conference, the HACC'I indicated the sheriff
reports were sufficiently deta5led since the documents
detailed specific arrest figures or different offenses.
However, this portion of the sheriff reports was not very
specific concerning the location where arrests were being
made. This is evidenced by the housing authority's
inability to distinguish between: project and community
Page 27 99-SF-209-1002
Finding 3
when reporting crime statistics on the summary report
(HUD-52356) provided to HUD. The crime reports were
also not specific enough for the housing authority to
evaluate whether they accomplished their crime reduction
goals.
The housing authority should obtain and analyze available
information from the sheriff so that it can be used to
evaluate the DEP's progress. The housing authority needs
to request data which can be used to properly complete the
semiannual reports submitted to HUD.
Evaluation
The housing authority agreed to perform a formal
evaluation of their DEP program. Proper evaluations need
to be performed consistently and the results reported on the
semiannual reports to HUD.
Previous Audit Finding
The HACCC questioned the need to open the previous
audit report finding. They also interpreted the finding as
having stated that semiannual reports were not provided to
HUD. However, the previous finding was opened because
the housing authority did not provide the proper evaluations
in their semiannual reports. We are not indicating that
semiannual reports were not provided, The previous DIG
audit report had also found that the housing authority had
not properly evaluated its performance. Since this corre-
sponds with the current issue, we have reopened the previ-
ous finding. We have provided a copy of the previous OIG
audit report to the HACCC.
Recommendations We recommend that you assure that the housing,authority:
3A. Establishes a proper method to measure the
effectiveness of its DEP by adopting measurable
and relevant performance goals that allow
evaluation of program success. Evaluations should
be sufficient to indicate if modification of activities
is needed to make them more successful and to
99-SF-209-1002 Page 28
Finding 3
identify unsuccessful strategies. If needed, the
HACCC should obtain support and advice under the
public housing drug elimination technical assistance
program.
Also, we are reopening recommendation 1 D of the
HAD Inspector General audit report 92-SF-209-
1002, dated December 17, 1991, calling for
HACCC to provide HUD with semiannual reports
that include a complete program assessment.
3B. Establishes formal procedures to obtain accurate
and reliable participation figures for its prevention
and treatment activities, and that these records are
properly documented in housing authority records
and the results reported to HUD.
Page 29 99-SF-209-1002
Finding 3
(BLANC PAGE)
99-SF-209-1002 ?age 30
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......... ......... ................................................................ . .. ........ ......... ...._
. _... .......... . ..._._. _ __
Finding 4
Accounting Records Need to Identify Individual
Transactions to Particular Grants
The HACCC's accounting records did not distinguish transactions among the DEP grants.
This apparently occurred because the housing authority was not aware of the need to main-
tain this information. As a result, the accounting system does not provide reasonable
assurance that expenses and income are matched to the appropriate grant and that grant
funds are used in accordance with requirements.
Subpart 85.20 of Title 24 of the Code of Federal
Accounting Records Regulations, standards for financial management systems.
RequirementRegulations,
that grantees must maintain records which adequately
identify the source and application of funds provided for
financial-assisted activities. These records trust contain
information pertaining to grant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays
or expenditures, and income, Thus, the accounting records
must clearly show to which grant individual expenditures
and revenues apply.
The HACCC did not properly identify in its general ledger
Transactions Not or other accounting records to which grant the DEP
Separated Among expenditures and revenues applied. The housing authority
Individual DEP Grants did separate DEP from other programs, but not by the dif-
ferent grants. The only information available to show
which year's grant expenses were being charged, were brief
notations made by the finance director on monthly general
ledger printouts. These notations were insufficient to deter-
mine which expenses were being charged to each grant
since they were total amounts not identifying specific trans-
actions. Therefore, the reports submitted to HUD request-
ing grant funds showing line-item expense amounts by
individual grant were not readily traceable to the
accounting records.
The finance director handled the accounting and allocations
of DEP transactions. However, the director was unavail-
able during the audit. Other accounting staff were unable
to explain the activity within the DEP account or locate any,
detailed notes identifying transactions to specific grants. It
appeared that the housing authority was not aware of the
Page 31 99-SP-209-1002
Finding 4
need to maintain accounting records that identified indi-
vidual transactions among the DEP grants.
As a result, the accounting records did not provide assur-
ance that expenses and income were properly matched to
the correct grant and that funds were used in accordance
with requirements. Thus, extra audit effort was needed to
reconcile DEP expenses and requisitions of HUD funds to
the individual grants and to determine whether the housing
authority adhered to the line item cost budgets.
Auditee Comments The housing authority agreed to improve its accounting
and OIG Evaluation over DEP transactions by identifying the applicable DEP
grant in its general ledger reports,
Recommendation 4A. We recommend that you assure the housing
authority implements a system of accounting and
record maintenance over the DEP grant which will
ensure that expenditures and revenues can be
readily matched to the applicable grant.
99-SF-209-1002 Page 32
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Management Controls
In planning and performing the audit, we considered the management control systems used by
the Housing Authority of the County of Contra Costa to determine the audit procedures and not
to provide assurance on management control. Management control is the process effected by an
entity's board, management, and other personnel, designed to provide reasonable assurance for
achieving objectives for program operations, validity and reliability of data, compliance with
applicable laws and regulations, and safeguarding resources.
Controls Considered The following control systems were relevant to the audit.
objective:
• Expenses
• Revenues
• Payroll
• Program evaluation
• Reporting to HUD
e obtained an understanding of the control structure for
Audit Procedures used the above systems and determined the risk exposure to
on I2isl�Assessment design audit procedures. We concluded that the audit
would be performed more efficiently by doing substantive
tests without reliance on management control. Therefore,
we did not necessarily make a complete assessment of con-
trol design or determine whether policies and procedures
had been placed in operation.
A significant weakness exists if management control does
not give reasonable assurance that control objectives are
met. Observed weaknesses with program evaluation, re-
porting, expenses, and revenues are discussed in the
report's findings.
Page 33 99-SF-209-1002
Management Controls
(SLANT{. PAGE)
99-SF-209-1002 Page 34
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_. _ _ __
Prior Audit Findings
The HUD Office of the Inspector General previously audited the HACCC's drug elimination
program and its comprehensive improvement assistance program for the period of July 1, 1989
through July 31, 1991. The audit report (number 92-SF-209-1002) was issued on December 17,
1991.
Similar Issues Noted The audit raised issues that are similar to those discussed in
findings I and 3 of the report in-hand.
• The HACCC spent DEP" funds of $1,747 for ineligible
or unapproved items, and was about to spend another
$20,000 improperly unless corrected.
• The HACCC's DEP progress reports to HUD were
incomplete and did not include the rewired evaluation
of the grantee's progress against its plan. As a result,
Neither HUD nor HACCC had a timely assessment of
the program..
The prior audit's principal recommendations for these
Prier RecommendationsThe
were for the housing authority to (1) provide HUD
with semiannual reports that would include a complete
program assessment, (2) reimburse HUD for the ineligible
$1,747, (3) and amend its DEP to eliminate the future use
of funds for inappropriate activity. HUD closed these find-
ings when the HACCC submitted a revised budget elimin-
ating the inappropriate activity and agreed to provide semi-
annual progress reports to HUD in conformity with require-
ments.
Page 35 99-SF-209-1002
Prior Audit Findings
(BLANC. PAGE)
99-S!=-209-1002 Page 36
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Appendix A
Schedule of Ineligible & Unsupported amounts
Ineligiblen �"�
F: w
Amounts
$14,986'
$3,110
$6,010
f n
b�
4 µ �
$24,106 7
Ineligible amounts obviously violate law, contract, HUD or local agency policies and regula-
tions.
Unsupported amounts do not obviously violate law, contract.
policy or regulation except for the
absence of evidence to show that the amounts conform with requirements or are subject to further
HUD review to determine their eligibility.
' The summer arts program is discussed under both finding 1 as an ineligible item and under finding 2 as a clues-
tionable program change. However,this item is listed only once on the schedule.
Page 37 99-SF-209-1002
Schedule of Ineligible and Unsupported Amounts
(BLANK.PAGE)
99-SP-209-1002 Page 38
Appendix B
uditee Comments
Housing Authority of the County of Contra Costa
Response to HUD Inspector General Draft Deport Dated September 30, 1998
[electronic mail version]
[Finding 1 - Cost Eligibility]
It is the Housing Authority's belief that the summer arts program for youth was an
eligible expense under the DEP. The statement made in the audit report that any
expenditures of DEP funds made for youth services roust include drug education does
not reflect the complete eligibility standard stated in the NOTA. The summer arts
program for youth only minimally included a drug education component, in the same
manner that Midnite Basketball and other physical recreation programs, it did include
development of peer leadership skills. In fact, the NOTA promotes the development of
groups "coordinated by adults with the active participation of youth to organize youth
leadership, sports, recreational, cultural and other activities involving HA youth". The
summer arts program was precisely such a program. Drug education information and
other drug prevention activities was conducted in other elements of the overall DEP
program such as resistance training and conflict resolution.
The summer arts program was an innovative collaboration of the Housing Authority, the
County Arts Council and the Police Activities League It built upon existing
relationships to broaden opportunities for West County youth residing at DEP target
sites by making available resources at another which would otherwise have been
unavailable to them. The youth participants in this program from the target sites were
transported daily from a drug infested community to participate in a ten-week
interdisciplinary arts program designed for youth from 12 -- 18 at a site in Central
County. This program featured two-dimensional visual art activities and performing
arts. This program is precisely the kind of program drug prevention: activities are build
upon. It included positive role models and alternative activities —the care features of all
DEP efforts. It also included significant involvement of the target site supervisor who
continued to maintain daily programs at the target site while the satellite activity was
occurring. He coordinated transportation to the Martinez site for all of the youth
participants for the daily ten week long program. He also provided verbal reinforcement
of drug prevention education and information. This element of the program was evident
when, at the end of the program art show, the youths unveiled a ',mural to their slain
friend from North Richmond (target site) and included the DEIN staff as VIP's.
We further maintain that the NOFA did not restrict the support of families nor activities
of the youths to a single physical location. The NOFA states "Prevention programs
must demonstrate capacity to provide residents the opportunities for interaction, with or
Page 39 99-SF-209-3002
Auditee Comments
referral to established higher educational or vocational institutions with the goal of
developing or building on the residents skills to pursue educational, vocational and
economic goals."
We further take exception to the statement that these costs were incurred because
housing authority officials "were not sufficiently knowledgeable of program requirements
or were not sufficiently knowledgeable of program requirements or were not fully aware
of how DEP funds were used." Staff was fully aware of how the funds were used for
the summer arts program and believed that the costs were clearly eligible under the
program.
We concur with the IG's recommendation regarding the $3,110 paid for audit services.
We concur with the IG's recommendation regarding the $6,010 paid for grant writing
services.
For the reasons stated above, we take exception to the assertion that the $14,986 paid
for the summer arts program is ineligible under the DEP.
In light of the findings regarding the grant preparation fee and the audit fees, which
were erroneously charged to the DEP program, we believe that internal controls need
to be strengthened. Although the program manager does review and approve uses of
funds for programs under his or her control the coding for each disbursement is not
explicit when received by the Fiscal Director. We intend to develop a periodic financial
report for use by the program manager when approving expenditures prior to any
accounting entry by our fiscal department.
Although we believe that our staff has a good knowledge regarding eligibility of costs
under DEP, we welcome any technical assistance HUD is willing to provide,
[Finding 2 - Program Changes]
The Housing Authority has consistently provided timely reports to HUD on its program
activities The 1996 DEP expanded the program to Rodeo, our largest development,
based on evidence of increased trafficking in that area, north of the initial target site
near 1-80. The expanded program included the addition of a sheriffs deputy at the
Rodeo development (both North Richmond and Rodeo are served by the same Sheriffs
station) and the addition of a Skills Training Coordinator to develop a Computer
Assisted Learning lab at the Senior Center. There was no reduction in the drug
education activities of Project PRIDE in North Richmond. 75% of the program staff
were public housing residents.
The original budget projected entry level pay for the Sheriffs Deputies; subsequently, a
higher rank or salaried person may have been assigned to the project, requiring the
Housing Authority to pay higher than budgeted costs to maintain the same level of
99-SF-209-?002 Page 40
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_ .......... ... ........................................................................... ... ...._...... ... . ... _ _ _
_ ............................................................... .... ._. _
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Auditee Comments
service. In no case was a prevention or treatment program diminished--in fact it was
expanded to include diverse alternative activities away from the drug infested target
areas by collaborating with other agencies and programs.
HUD was informed of the precise scope of service provided by the Sheriffs department
and the casts associated with the scope of services in a Cooperation Agreement
between the dousing Authority and Sheriffs Department for services which were
augmented and detailed by contract through the Drug Elimination Program funds. HUD
was informed of these arrangements as each DEP application contains bath of these
documents.
HUD was informed that funds were being used to establish the Skills Training
Coordinator position and that additional youth program activities would be sought. The
June, 1997 6-month report referenced such activities which includedtickets purchased
at a discount as a result of staff initiative to join the Bass Ticket Foundation . The 10
and under basketball program was cited and specifically noted its preparation to play in
a six team summer league sponsored by the Police Activities' League--another
collaboration. Both the Bass Foundation membership and PAL collaboration formed
after the DEP grant was written and the dousing Authority informed HUD of these new
initiatives through the 6-month report. young girls at the target site',requested special
efforts be made to address their needs: they suggested a Young Women's
Achievement Class and a Winter Ball--both grew out of the direct requests of the young
residents, neither had been referenced in advance. It is the Housing Authority's
position that a recreation program needs to maintain this type of flexibility in order to
continue to be innovative and responsive to resident and site needs.
Services Provided to Non-Targeted Developments
The dousing Authority holds that all the services charged to the grants in question
have been provided to the residents of the target sites, although not necessarily at
those sites. Through DEP, Youths have traveled to several different sites. They have
been to Angel Island, Water world, Marine World. They have attended professional
sporting events The IG stated nearly one third of the total enrollment in the ten- week
Arts Alive program included target site youth. The Housing Authority considers this a
successful collaboration--not a diversion. Again, no DEP funded services designed for
the target sites were diverted away from to non-target developments.
The IG Audit also criticized the dousing Authority assignment of a Skills Training
Coordinator.
This position operates from the Martinez Police Activities League office and was first
included in the 1996 DEP. The Martinez PAL Computer Assisted Learning Lab is one
of six such facilities at Housing Authority sites throughout the county. It is one of the
two facilities with more advanced equipment. It was launched in 1996 and is staffed
primarily by volunteers, including a Martinez Police Officer who serves as its volunteer
Page 41 99-SF-209-1002
Auditee Comments
Executive Director. It operates from a building in the Alhambra Terrace public housing
development in Martinez. In current Justice Department lingo it would be considered a
"Safe Haven" in that it too offers a place for youth and families to seek recreational and
educational information. It offers computer assisted learning services for youth and
adults. In cooperation with a nearby business college, it also added a "repair the
computer" class at the site. It is one of the two more advanced learning labs at Dousing
Authority sites.
When developing the 1996 grant, the Housing Authority decided it would benefit both
the fledging computer lab at Rodeo and the volunteer staff computer lab at North
Richmond to have the regular technical assistance of a skilled training coordinator. The
position was written in to the grant. A position description was included. Letters of
support were included in the 1996 DEP application detailing the relationship of the
Martinez PAL Computer Lab. Also included was as a letter noting that "the Martinez
PAL is a recreational and educational oriented youth program that relies on its activities
to create and cement the bond between Police Officers and the Youth s on the street."
It was an opportunity to grow a program with a partner whose philosophy was
consistent with the goals of the DEP. Also accompanying the 1996 grant application
was a letter from the Boys and Girls Club in Rodeo in which the Housing Authority's
growing partnership was spelled out as follows"...in working with the Housing Authority
staff, it seems clear that the plan to structure a skilled-learning program at the Boys and
girls Club as well as resources of local industry and business has much promise as a
Drug prevention/intervention strategy." HUD has been informed of what our plans
were.
However, staff changes in the Skills Training Coordinator slat (three within 18 months)
and a turnover in the position of the Executive Director at the Boys and Girls Club
resulted in a slower start than; anticipated and a loss of continuity. The Dousing
Authority believes that this program will, in the near future, become a fully functioning
computer lab. In subsequent six month reports we will report more fully on the
continuing challenge to Computer Labs at both North Richmond and Rodeo. It should
be noted that both sites have been utilized to conduct welfare-to-work computer training
and residents have participated in "repair the computer" training sessions at the target
sites.
The IG Audit states that 93% of the Skills Training Coordinator time was inappropriately
charged to DEI?.. in fact, the coordinator with the best lab available is a continuing
resource for the target sites and all other HACCC computer labs. The Housing
Authority believes she is able to provide technical assistance from a variety of locations
. She has a schedule which places her at the target site twice a week, developed in
conjunction with the Resident Council at the target site. In addition, she is providing
direct resident training off site, for residents of the target site. This program is one of
several the 'Housing Authority is building upon in cooperation with other partners,
including the Boys and Girls Club and the U.S. department of Justice/County Social
Services and other Community Based Organizations.
99-SF-209-1002 gage 42
Auditee Comments
The IC asserts that funds were used for activities at non- target sites and as a result,
reduced services to residents of developments identified as having',high drug related
crime. The Housing Authority believes conducting such activities off-site is a healthy
alternative for the residents of such sites by providing opportunities to engage in
educational, recreational and economically responsible activities away from drug
infested situations.
We concur with the 1C calculation of how much CEP funds were spent on law
enforcement activities. However, we dispute the implication that drug education
activities were reduced. In fact, all of the drug education activities proposed in the
applications were carried out, but carried out at a lower than budgeted cost, allowing for
additional law enforcement activities to be conducted The following activities were
carried out by these funded positions which are all DEP paid slats never reduced. The
stipends for residents ($1200 per year) were the only non-used budgeted funds.:
• Project Pride Center Coordinator (counseling, referrals, liaison to Rubicon,
position continuously filled)
• Project Pride Recreation Coordinator (position continuously filled)
• Project Pride Center Office Aide (Admin Support)
• Project Pride Recreation Aide (rec support)
[Recommendation 2] A. The HA maintains that it has met HUD mandated reporting
requirements.
[Recommendation 2] B. From the IO report, It is unclear who is to determine the
propriety of law enforcement costs and what standard is to be applied to determine their
propriety. The Dousing Authority believes they are proper and eligible DEP costs.
The HA reclassified funds; did not downsize its prevention efforts and expanded
preventive efforts.
[Recommendation 2] C. From the IO report, it is unclear who is to determine the
propriety of law enforcement costs and what standard is to be appliedto determine their
propriety. The Dousing Authority believes they are.proper and eligible DEP costs.
The Skills Training Coordinator is a Housing Authority employee and has provided
training assistance for residents of the target site since her employment with the agency
in January of this year. She is the third person.to assume this role within the last 20
months and there was some lost momentum. However, no where does the IEP NOFA
say that CEP services must be restricted only to a specific site. Such a requirement
would be overly rigid and limit a broad number of youth recreational and educational
activities that are by their nature deterrents to drug related activity.
=Find`ing 3 - Program Evaluation and Reporting]
Page 43 99-SF-209-1002
Auditee Comments
The Housing Authority maintains that, through its normal housing management
activities, it is aware of the type and intensity of the drug-related activities at the target
sites. The Housing Authority management team has both management records on site
(eviction activities) and on-going dialogue with residents and the Project PRIDE
deputies. These sources of information provide guidance on the extent of the problem.
We have met regularly with the local the U.S. Attorney, District Attorney, Sheriffs
Department, residents, local municipal advisory councils school representatives and a
host of community based organizations to ascertain the extent and nature of crime at
our target sites. The data provided by the Sheriffs department has been included in
each application and six-month report. It is not manipulated by the Housing Authority,
We conduct focus groups and survey residents in conjunction with Justice Department
grants as well as each DEP grant--our findings are not unlike those found in the IO
random survey: residents are aware of the drug prevention and treatment programs
being offered by the Housing Authority.
In fact, the close involvement with Housing Authority management has led the DEP
deputies to suggest the use of broader legal tools to suppress illegal drug activity. The
agency has sought aggressive pursuit of temporary restraining orders to keep cleaned-
up areas free of returning problem individuals. After much persuasion, County Counsel
successfully promoted the use of such restraining orders. With the assistance of the
local District Attorney, our first permanent restraining order was obtained at a DEP
target site in October 1998.
The DEP program is staffed on site by four individuals at one target site one individual
at another target site, three law enforcement officers who cover two sites and is
oversee by an Assistant Department Director and Department Director. All of these
individuals contribute to the content of the six-month report. The Recreation
Coordinator maintains the complete participant logs on site and they are included in the
6-month report and annual grant application. The police logs are developed by the
Sheriffs department and are included in the 6-month and annual grant application.
Contrary to the IO auditors finding, they do break down crime stats by EACH
QUARTER similar to previous comparable periods. For example, one six month report
reads "Recorded incidents of narcotics/drug related arrests within the North Richmond
area was 2.96 cases per 1,000. This was a 26.0% decrease as compared to the base
July 1, 1989 through June 30, 1990." The next sentences refers to the target area--for
which data was not kept separately in the base year of 1989, as the area was not yet a
Drug Elimination Program site. It states "Recorded incidents of crime within the Project
Pride [the target DEP site] was 215.6 cases per 1,000 population. There, was no base
in which to make a comparison. This is a 12.20% decrease from the 3" qtr. of
1997."'This report included DEP grants for 1995 and 1996. The fact is that all criminal
activity information provided by the Sheriffs Department was reviewed by the agency,
' Dec 1997 DEP 6-month Report, Section 1, Criminal Statistics Report
99-SF-209-1002 Page 44
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Auditee Comments
determined by program staff: to be adequate to assess the law enforcement services
provided and was reported to HUD.
2. On Page 11 of 18 the IG says: "...Nevertheless, the semiannual reports applicable to
the 1994 to 1996 grants described activities, but did not shad if the quantifiable goals
contained in the application were achieved. This was principally due to the housing
authority not collecting information which could show whether the goal was achieved.
When information was obtained it was not compared to the objectives..,"
In each of the DEP program year, residents were surveyed about their attitudes and
perceptions regarding the program, crime data is collected and reviewed, law
enforcement support of housing management actions such as evictions, and stay away
orders are detailed in the annual grant application and 6-month reports. Included in the
narrative is the actual involvement of the deputies in community meetings and
collaborations such as the National Weed and Seed effort.
The statistics are provided by the Sheriff, not manipulated by the Housing Authority and
are consistent with on site housing manager staff reports of conditions at the target
properties. They are specific in that they detail narcotics and drug related arrests within
the County, the local community and the target Project Pride DEP sites.
The second six-month report for each year tallies the statistics for the entire year.
Since it is reported to HUD on a six-month, not quarterly basis, that appeared adequate
to the DEP program staff. Contrary to the ICS's report, a comparison is made to the prior
year as noted in the response above.
The Housing Authority does not employ forensic statisticians and thus, relies upon our
local law enforcement agencies to provide uniform crime reporting data. While early
IEP six-month reports did not break down the development (project), current reports
carry this level of comparison and have for the past three years. All recent six-month
reports compare county and area crime stats with the target sites. This was an
imorovement made in the reporting during the years covered by the IG Audit. The
annual grant applications also detailed crime statistics with a level of specificity that
should provide a sense of the effectiveness of the program. (see 1996 DEP Grant
Application, Section 6, p. 8) ` Anecdotal information also supports our interpretation of
the crime stats. We have ten-"5 employees working at each of the target sites as well
as tenant councils; community based organizations and other County program offices.
All provide daily accountability and information on site-based activities.
The IG report states: There was no crimp rate information for the development relating
to the period before the DEP-funded deputies were available, so an overall comparison
of the improvement 1 crime could not be made. Before there was a DEP program, the
1996 DEP Grant Application Section 6, p. 8
Page 45 99-SF-209-1002
Auditee Comments
Sheriff's Department did not capture crime data by housing authority boundaries
because they had no reason to.
It is a goal of the HA to conduct an evaluation of the program using the goals cited in
the program grant application approved for the current DEP program. The evaluation
will be useful in malting appropriate program adjustments and in helping design future
collaborations with Justice Department activities such as the Weed and Seed Strategy
now underway at the target developments.
(Finding 4 - Accounting Records}
HACCC maintained all DEP transactions in the General Ledger. At the end of every
month, the DEP accounts were analyzed to identify the transactions by individual grant
awards. This was done because the grant amounts and the line items were relatively
minimal compared to other programs managed by HACCC. This method was sufficient
for the Line of Credit Control (LOCCS) cash drawdown. The ledger and the initial
documents identify DEP transactions and the year to which they apply. The Housing
Authority is able, from records maintained, to assign all DEP expenses to a specific
DEP grant year.
We disagree with the ICS report's statement that "It appeared that the housing authority
was not aware of the need to maintain accounting records that identified individual
transactions among the DEP grants." Staff was aware of this standard but believed the
minimal size of the program activity did not warrant maintaining a separate ledger which
separated the costs by year, because 1) if needed; this ledger could be constructed
from the available records and 2) such a ledger was not needed to conduct day to day
DEP business.
We agree to record all transactions in the general ledger by the year of the DEP grant
award. This will assist program and fiscal staff to further analyze DEP progress and
provide a better audit trail.
99-SF-209-1002 Page 46
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Appendix C
--------------
istribution
Director, Office of Public Housing, California State Office, HUD
Secretary's Representative, California. State Office, HUD
Director, Administrative Service Center, Colorado State Office, HUD
Office of Comptroller, Texas State Office, HUD
Field Accounting Center, Texas State Office, HUD
Comptroller, Office of Public and Indian Housing, HUD
Director, Office of Budget,HUD
Director, Enforcement Center, HUD
Director, Office of Crime Prevention and Security, HUD
Associate General Counsel, Office of Assisted Housing and Community Development, HUD
Assistant to the Deputy Secretary for Field. Management, HUD
Chief Financial Officer, HUD
Deputy Chief Financial Officer, HUD
Deputy Assistant to the Secretary for Labor Relations, HUD
Acquisition Librarian, HUD
Committee on Governmental Affairs, U.S. Senate
Government Reform and Oversight Committee, U.S. House of Representatives
Subcommittee on General Oversight and Investigations, U.S. House of Representatives
Director, Housing and Community Development Issue Area, U.S. General Accounting Office
Housing Authority of the County of Contra Costa
Page 47 99--sF-209-I002