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HomeMy WebLinkAbout054-2001 LTC CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami~beach.fl.us L.T.C. No,,)l.-f -J{J5a')/ LETTER TO COMMISSION March 12, 2001 TO: Mayor Neisen O. Kasdin and Members of the City Commission FROM: Jorge M. Gonzalez \. I ~ City Manager 0 YV. a INSPECTOR GENERAL AUDIT REPORT ON THE HOUSING AUTHORITY OF THE CITY OF MIAMI BEACH SUBJECT: Attached is copyofa letter, dated March 1, 2001, from the u.s, HUD Office of Public Housing to the Housing Authority of the City of Miami Beach, regarding the Inspector General Audit of the Housing Authority issued on October 20,2000. The letter lists audit findings and recommendations. A meeting has been scheduled on Tuesday, March 27, 2001, for the Administration and Housing Authority officials to discuss and address the contents of the letter. JMG/C~IMDC a-. Attachment c: Christina M. Cuervo, Assistant City Manager Miguel! Del Campillo, Housing Director MBlWGA.LTC Mar 6,1001 12:30PM No,5320 P 1,6 .' .>-'i""iNTIO~ "'0 (* ~I *) ""~" o~ lli-1NO'E.~\:: U.S. Department of Housing and Urban Development Flonda State OffIce. Southe.st/Caribbean 909 S,E, First Avenue, room 500 Miami,FL 33131 March 1,2001 NIx, Larry Shoeman Executive Director Housing Authority of the City of Miami Beach 200 Alton Road Miami Beach, FL 33139-6742 1 -:-:::= I' " rr ."'=1 :--, : --- ...-=, .r;..... ,-' I" \.- I , I j'lSl ~,"" "/, <,,'-' I ~ i"" ~ ~ '"f 1'_ !..; '. / t-~ 11 ) II' II i..:t':l -..;.'1.,;..._ - ll, i l~ !.; 1 . . I;": iln'.':' c I'il. \" i ,.' ' Il/ Ii I\U U '-- i , :jflice of E~ecutlve Drrectoi _1"- Dear Mr, Shoeman: This is in reference to the District lnspector General for Audit-Southeast Canbbean's (IG's) Audit Report and attaclunents on the Housing Authority of the City of Miami Beach (HAC.M:B), Audit Report No, 01-AT-202-1001, issued October 20,2000, This report contains four controlled audit Findings and 14 Recommendations. This Office has reviewed and evaluated the following Documents: (1) AudIt Report Number 01-AT-202-1001, HACMB, Issued October'2TI'; 2000 (2) Letter respondmg to the draft Audit Report dated September 27, 2000, from the HACMB to Ms, Nancy H. Cooper, District lnspector General for AudIt. Our commentS are as follows: Recommendation lA: The IG found that the HACMB had unsupported costs of $795,178 pald to the City of Miami Beach (City) for police protection, recreation and code enforcement activities. The HACMB must obtain reimbursement from tbe City for these costs, Based on language at page 6 of the IG's report, the City has contractually agreed to reimburse the HACMB if HUn should take exception to these costs, Wben the City reimburses the HACMB, it must submit to this Office documentary eVldence in the fonn of copies of checks or wire transfers of payments of the funds by the City to the HACMB. In the alternative, the HACMB may present adequate documentation tothis Office to support these costs. The adequacy of the documentation will be determined by this Office with advice from the IG, As we understand the situation, the IG examined documentation at, not only the HACMB, bui: at the City, Supporting documentation should be documents not previously examined by the IG. Within 60 <jays, the HACMB must submit any additional supporting data on which it relies to support these costs, In the event that adequate supporting documentation is not found, the HACMB must take appropriate action to obtain reimbursement from the City. If litigation is necessary, the HACMB must obtain pennission from the Hun Office of Counsel poor to filing SUIt. ~ar 6. 2001 1231PM No,5820 p, 3/6 2 Also, the HACMB must termmate current contracts of this type. if any. or any similar contract(s) With the Cit-I The HACMB may not enter into any new contract of a like or similar nature with the City unless pnor written approved IS obtained from tlllS Office. Federal funds may not be used to pay the City for any existing or future contract of a hke or slUular nature unless written approval is obtamed from this Office, Based on the September 27, 2000, letter the HACMB cUITently does not have an inter-local agreement wnh the City for servIces, However, 'Within 60 days, tbe HACMB must provide assurance to this Office by letter that it currently has no contract(s) of this type or any simIlar contract(s) with the City, If this is correct. Recommendation tB: The IG found that the HACMB did not currently have proper general ledger accounts to control inter-local projects and properly monitor expenditures for future activities funded With Section 8 Administrative Fee reserves, Based on the HACMB's September 27, 2000, letter it currently has no inter-local agreement with the City for services, Consequently, the HACMB has no current need to establish general ledger accounts and monitor expenditures for inter-local agreements. However, within 60 days, the Board must pass a formal Resolution agreeing to establish proper general ledger accounts for any future inter-local projects. The Resolution must include a provision for HUn review and approval of all inter-local agreements. The HACMB does have Section 8 Administrative Fee reserves whIch it may use with wntten approval from this Office. Consequently, it must cUITently establish general ledger accounts to monitor expenditures from its Section 8 Administrative Fee reserves. Within 60 days, the Board must pass a formal Resolution estabbshing proper general ledger accounts to monitor expenditures from the Section 8 AdministratIve Fee reserves. The &;,CMB must provide to this Office a chart of accounts showing the establishment of the control accounts and written assurances that the accounts W111 be used by the HACMB, Recommendation 2A: Withm six (6) months from the date of this letter, the HACMB must submit written documentation showmg that it has the financial resources, commitment to complete and ability to complete the center within a two year period. This Office believes that a t\vo year period is a reasonable time for the HACMB to complete the construction of the center, The documentation must include, but not be limited, to a deed to the HAC'MB for the alternative SIte, copies of final architectural plans, a funding conumtment from an approved lender, Federal, State or local conunitrnents for any grants and a City bUIlding permit. Additionally, the HACMB must submit a Board resolution showing its resolve and commitment to complete constructIOn of the center withm the two year period Recommendation 2B: WIthin sixty days, the HACMB must obtam an appraIsal of the eXIsting site conducted by an appraiser acceptable to HUD, Within one year, the HACMB must submit a copy of the recorded deed conveying the eXIsting site to a bona fide purchaser for full value and a copy of the closing statement sho\ving the sale price and the distribution of funds Also, the HACMB must submit to this Office a copy of its bank statement showing the deposit of the net sales proceeds into the bank account of the &;,C~'fB. Additionally, the HACMB must submit a copy of the HACMB's accounting worksheet showing the total funds contributed to the center from the SectIon 8 ~ar, 6',2001 [2:31PM No,5a20 P 4/6 3 administrative fee reserves and the Bond constIUction fund and the percentage contributed from each fund, The Section 8 administrative fee reserves and the Bond construction fund must be reimbursed in the same percentage as the costs paid from each fund. The HACMB must submit to this Office copies of the HACMB' s bank statements showing the deposit of funds to each account or copies of Journal Vouchers allocating the costs to the Section 8 administrative fee reserves and the Bond constIUction funds. The HACMB may not hold the funds in separate accounts pending construction on an alternate srte, Recommendation 2C: Within 90 days from the date of thiS letter, the HACMB must furnish adequate justification for the expenditure or recover the amount of $209,570 paid to the City of Miami Beach (City) for fees associated With the falled jomt venture project. Page 17 of the IG' s report shows that "The project was a joint venture between the City and the HACMB pursuant to an affordable housing Joint venture agreement." Copies of justification for the expenditure or bank statements showing the deposlt of funds in the amount of .$209,570 to a bank account of the HACMB must be submitted to thiS Office within six (6) months. If litigation is necessary, the HACMB must obtain pennission from the HOO Office of Counsel prior to filing suit. Recommendation 2D: Wltltin 90 days, the HACMB must submit a plan to HUD's Office of Multifarmly Housmg for the use of the remaining bond funds and all accumulated interest earned on the bond funds. The plan must be acceptable to the Office of Multifamily Housing Recommendation 3A: Withm 90 days, the HACMB mustrei.mburse HUD $9,267 for the excess HAP payments disbursed to Section Sowners and any additional amounts identified during its rent reasonableness reviews. Also, the HACMB must submit a letter to this Office showing an accounting for the additlonal amounts identified during its rent reasonableness reviews. Additionally, the HACMB must submit copies of checks paid to the U, S, Treasury or evidence of wire transfers to HUD's Accounting Center in Ft. Worth, Texas, in full payment of the $9,267 identified by the IG and any addltlonal amounts identified dunng the rent reasonableness reviews, Recommendation 3B: Within 90 days, the HACMB must procure the services of an IOdependent contractor to calculate the amount of utility reimbursements due tenants for the past five years. The calculations must be completed and the required payments made to tenants within si" (6) months of the date of this letter, The HACMB must submit to this Office a copy of the contract with the independent contractor, Also, the HACMB must submit a letter stating that the computations have been completed and that required payments have been made to all tenants who are entitled to payments, Additionally, in procuring the services of the mdependent contractor, the HACMB must follow the procurement requirement at 24 Code of Federal Regulation (CFR) Section 85..36. Mar, 6. 2001 12:31PM -, . No,5820 P, 5/6 4 Recommendation 3C: The HACMB must resolve its ammmstrative deficlencies in the Secbon 8 Program identified by this audit and other reviews within 6 months (including the Section 8 cost issues discussed in findings 1 and 2 of the 1G's report), This Office expects to perform a field reVlew of the HACMB, prior to September 30, 2001, to confirm that all deficiencies have been corrected, Recommendation 3D: Regulabons at 24 CFR Section 982.1 55(3) authonze HUD to prohibit a PHA from using funds In its Section 8 Administrative Fee Reserves if the PHA has not adequately admirnstered its Section 8 program, Accordingly, the HACMB is prohibited from making any disbursement of funds from its Section 8 Administrative Fee Reserves until it submits a written request to this Office and obtains written permission for the disbursement. This prohibition will continue until this Office determines and gives written notice to the HACMB that the HACMB bas substantially resolved the systemic problems in Its SectIOn 8 Program and the Issues identified in Findings I and 2 of the IG's audit report. Recommendation 3E: As stated In RecommendatlOn 3C above, the HACMB must resolve its admimstratJve deficiencies in the Section 8 Program identified by the audit and other reVlews wIthin six months of the date of this letter (including the Section 8 cost issues discussed in findmgs land 2 of the IG's report). Within 6 months, this Office wi1l assess the HACMB's administration of its Section 8 Program. It the HACMB fails to improve to within acceptable lImits, this Office will consider declaring the authority in substantial default and identifying other enl1ties that can effectively administer the program. At that time, we wi]] consider identifying and referring the responsible officials to HUD's Enforcement Center for consideration of administrative sanctions Recommendation 4A: The IG recommended that thIS Office review and determine If the HACMB properly procured its legal services, Within 60 days, the HACMB must submit to this office all documents related to its recent procurement of legal services so that we may determine whether these services were properly procured, Recommendation 4B: The IG recommended that this Office mOmtor the HACMB's procurement actions to ensure compliance with HUD procurement policies and procedures We plan to monitor the HACMB's procurement actIons remotely and by on-site vlsits, The HACMB must submit all requested documentation such as all the documents relating to recent legal procurement actions. The HACMB must take timely aCl10n to correct any defiCIencies found. Recommendation 4C: The 1G recommended that this Office place the HACMB on a reimbursement baSIS for funding, if the HACMB fails to improve to acceptable levels. Through various monitoring techniques, this Office will determine whether the HACMB's activities have improved to an < 0, Ma:r, 6', 2001 12:31PM , .' No,5820 P, 6/6 5 acceptable level. We may request documentatIon which the HACMB must submIt. Also, the HACMB must take timely actions to bring the operations of the HACMB up to acceptable levels, The HACMB has submitted several documents to thIs Office related to the correctIon of the deficiencies shown in this Report. Pending concurrence by the 10 00 these Management Decisions, this Office has not incorporated responses to this document. The HACMB will receive separate responses on these documents now that concurrence has been obtained, Should you have any questions regarding these matters, please contact me at (305) 536-4443, extension 2275, or Phil Aldridge, Division Director, at (305) 536-4443, extension 2291. Very sinCdrely yours, Ka Cato- Turner Director Office of Public Housmg cc: Ms. Nancy H. Cooper, Disnict Inspector General for AudIt-Southeast/Caribbean