type: other

jurisdiction: US

text: b'OFFICE OF AUDIT\nREGION 10\nSEATTLE, WA\n\n\n\n\n Yakama Nation Housing Authority\n Wapato, WA\n\n Native American Housing Block Grant,\n American Recovery and Reinvestment Act\n\n\n\n\n 2014-SE-1002 April 29, 2014\n\x0c Issue Date: April 29, 2014\n\n Audit Report Number: 2014-SE-1002\n\n\nTO: Ken A. Bowring, Administrator, Office of Native American Programs, 0API\n\n //signed//\nFROM: Ronald J. Hosking, Regional Inspector General for Audit, 0AGA\n\n\nSUBJECT: The Yakama Nation Housing Authority Did Not Always Spend Its Recovery Act\n Funds in Accordance With Requirements\n\n\n Attached is the U.S. Department of Housing and Urban Development (HUD), Office of\nInspector General\xe2\x80\x99s (OIG) final results of our review of the Yakama Nation Housing Authority\xe2\x80\x99s\nNative American Housing Block Grant under the American Recovery and Reinvestment Act of\n2009.\n\n HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on\nrecommended corrective actions. For each recommendation without a management decision,\nplease respond and provide status reports in accordance with the HUD Handbook. Please furnish\nus copies of any correspondence or directives issued because of the audit.\n\n The Inspector General Act, Title 5 United States Code, section 8L, requires that OIG post its\npublicly available reports on the OIG Web site. Accordingly, this report will be posted at\nhttp://www.hudoig.gov.\n\n If you have any questions or comments about this report, please do not hesitate to call me at\n(913) 551-5870.\n\n\n\n\n Office of Audit Region 10\n 909 First Avenue, Suite 126, Seattle, WA 98104\n Phone (206) 220-5360, Fax (206) 220-5162\n Visit the Office of Inspector General Web site at www.hudoig.gov\xc2\xa0\n\x0c What We Audited and Why unnecessary materials, (3) charged the grant for routine\n maintenance staff meetings, (4) did not always pay the\n prevailing Davis-Bacon wages, and (5) paid employees\nWe audited the Yakama Nation for hours not worked.\nHousing Authority because it received a\nnearly $4.9 million Native American In addition, it split purchases that would have required\nHousing Block Grant under the it to obtain multiple price quotations and did not\nAmerican Recovery and Reinvestment properly report the project activity descriptions, the\nAct of 2009. This was the largest grant number of homes it planned to repair, the amount of its\nof its kind in the State of Washington vendor payments, and the number of jobs created in\nand fourth largest in Region 10 (Alaska, FederalReporting.gov.\nIdaho, Oregon, and Washington). Our\nobjectives were to determine whether\nthe Authority properly spent its\nRecovery Act funds, correctly obtained\nsmall purchases, and properly reported\nRecovery Act information in\nFederalReporting.gov.\n\n What We Recommend\n\nWe recommend that the Administrator\nof the Office of Native American\nPrograms require the Authority to\nprovide support showing that almost\n$1.2 million was spent on the projects\nor reimburse HUD for transmission to\nthe U.S. Treasury from non-Federal\nfunds for expenditures it is unable to\nsupport and provide support showing\nthat $372,000 worth of materials\npurchased was the best value possible\nor reimburse HUD for transmission to\nthe U.S. Treasury from non-Federal\nfunds.\n\n\n\n What We Found\n\nThe Authority did not always properly\nspend its Recovery Act funds. It (1)\nspent $1.2 million in Recovery Act\nfunds without being able to show that\nthe funds were used on the projects, (2)\npurchased more than $177,000 worth of\n\x0c TABLE OF CONTENTS\n\n\nBackground and Objectives 3\n\nResults of Audit\n Finding 1: The Authority Did Not Always Properly Spend Its Recovery Act 4\n Funds\n\n Finding 2: The Authority Split Purchases That Would Have Required It To 11\n Obtain Multiple Price Quotations\n\n Finding 3: The Authority Did Not Properly Report Its Recovery Act 13\n Information\n\nScope and Methodology 16\n\nInternal Controls 18\n\nAppendixes\nA. Schedule of Questioned Costs 20\nB. Auditee Comments and OIG\xe2\x80\x99s Evaluation 21\nC. Criteria 46\nD. Multiple Purchases From Vendors 52\n\n\n\n\n 2\n\x0c BACKGROUND AND OBJECTIVES\n\nThe Yakama Nation, by exercise of the power of self-government, has designated the Yakama\nNation Housing Authority as a tribally designated housing entity under the Native American\nHousing Assistance and Self-Determination Act at 25 U.S.C. 4101, et seq. As a tribally\ndesignated housing entity, the Authority owns and manages a variety of low-income housing\ndevelopments to provide and promote safe and sanitary housing on a subsidized basis for\nqualifying members of the Yakama Nation.\n\nThe American Recovery and Reinvestment Act of 2009 included a $510 million appropriation\nfor the Native American Housing Block Grants, also known as the Indian Housing Block Grant.\nOf that amount, $255 million was disbursed based on a formula, and more than $242 million was\nallocated competitively. The U.S. Department of Housing and Urban Development (HUD)\nawarded almost $4.9 million to the Authority, of which almost $1.9 was formula based and $3\nmillion was competitively granted. The Authority received the largest award in Washington and\nthe fourth largest in Region 10 (Alaska, Idaho, Oregon, and Washington).\n\nThe Authority used its Recovery Act funding to modernize front porches, install gutters, renovate\nhomes for low-income families, and purchase modular homes used for housing families whose\nhomes were undergoing renovation. This work was performed on its own housing stock and for\nprivate homeowners.\n\nThe Recovery Act required the Authority to obligate its grant funds within 1 year of the date\nfunds were available. The Authority was also required to expend at least 50 percent of the grant\nfunds within 2 years and 100 percent within 3 years.\n\nOur objectives were to determine whether the Authority properly spent its Recovery Act funds,\ncorrectly obtained small purchases, and properly reported Recovery Act information in\nFederalReporting.gov.\n\n\n\n\n 3\n\x0c RESULTS OF AUDIT\n\n\nFinding 1: The Authority Did Not Always Properly Spend Its Recovery\nAct Funds\nThe Authority did not always properly spend its Recovery Act Native American Housing Block\nGrant funds. This condition occurred because the Authority disregarded its control procedures,\nlacked review processes, and failed to employ appropriate management techniques and\noversight. As a result, it could deprive its low- and very low-income families of needed benefits\nbecause it might be required to reimburse HUD for transmission to the U.S. Treasury up to $1.2\nmillion. In addition, more homeowners could have benefited from the unnecessary materials\nstored in its warehouse.\n\n\n The Authority Did Not Always\n Properly Spend Its Grant\n Funds\n\n The Authority (1) spent $1.2 million in Recovery Act funds without\n demonstrating that the funds were used on the Recovery Act projects, (2)\n purchased more than $177,000 worth of unnecessary materials, (3) charged the\n grant for routine maintenance staff meetings and maintenance operations, (4) did\n not always pay the prevailing Davis-Bacon wages, and (5) paid employees for\n hours not worked.\n\n In accordance with 24 CFR (Code of Federal Regulations) 85.20(b)(2), grantees\n and subgrantees must maintain records which adequately identify the source and\n application of funds provided for financially-assisted activities. In addition,\n according to 24 CFR 85.20(b)(4), the Authority\xe2\x80\x99s financial information must be\n related to performance or productivity data including the development of unit cost\n information whenever appropriate. However, it recorded materials (purchased\n mostly in bulk), goods and services, permit, environmental review, and\n assessment costs under the general category of construction rather than showing\n how they were used in the activities performed on the project. In addition, labor\n expenditures were recorded as \xe2\x80\x9cother task\xe2\x80\x9d under a common project work order\n entitled \xe2\x80\x9c60 Units Renovation\xe2\x80\x9d rather than being related to performance on the\n project.\n\n The Authority did not maintain adequate records identifying the application of\n more than $1.2 million in grant funds. It spent almost $731,000 on materials and\n supplies that it could not demonstrate were spent on the projects through source\n documents such as purchase orders, requisition slips, invoices, work order system,\n or financial and reporting system.\n\n\n 4\n\x0c In addition, the Authority paid its vendors almost $198,000 without obtaining\n proof that it received all the materials ordered. It did not always obtain signed and\n dated receiving reports and match them to the invoices and purchase orders as\n required by its policy. Receiving reports are confirmations that the Authority\n received the materials and goods and that they were acceptable in quantity and\n quality. Comparison of these reports identifies discrepancies between the amount\n ordered and the amount received.\n\n Further, the Authority recorded more than $289,000 in its financial and reporting\n system on labor costs that were not adequately supported as spent on the projects.\n Of this amount, timesheets showed that the Authority paid for time worked as\n \xe2\x80\x9cother\xe2\x80\x9d task on the timesheets under \xe2\x80\x9c60 Units Rehab\xe2\x80\x9d and \xe2\x80\x9c60 Units Renovation\xe2\x80\x9d\n in its accounting system. There was no documentation to support that the work\n performed was for the projects. Timesheets showed that the Authority paid two\n construction employees a total of more than $53,000, at the regular carpenter rate\n of $31.79 and overtime carpenter rate of $47.69 for these unidentified tasks. In\n contrast to the rest of the construction crew\xe2\x80\x99s timesheets, these timesheets did not\n identify the specific tasks performed or that those tasks applied to the projects.\n The table below shows the two employees\xe2\x80\x99 compensation for the undefined task.\n\n Regular Regular Overtime Total\n Task rate per time rate per Overtime amount\nEmployee performed hour paid hour paid paid\n A Other $31.79 $41,542 $47.69 $1,955 $43,497\n B Other 31.79 9,251 47.69 453 9,704\n Total $50,793 $2,408 $53,201\n\n The Authority purchased more than $177,000 in unnecessary materials. As of\n July 19, 2013, almost a year after the date on which it was required to expend 100\n percent of its grant funds, the Authority had more than $82,000, or 15 percent of\n the materials purchased for its formula grant, and more than $95,000, or 40\n percent of the materials purchased for its competitive grant, stored in its\n warehouse. According to 2 CFR Part 225, appendix A, costs charged to Federal\n grants must be reasonable and necessary. In addition, only materials and supplies\n used for the performance of a Federal award may be charged as direct costs. The\n Authority\xe2\x80\x99s policy also states that materials will be procured only for the specific\n job purpose.\n\n The Authority charged the grant for routine maintenance staff meetings and\n maintenance operations performed by maintenance staff. The Authority charged\n its competitive grant more than $5,000 for staff meetings and maintenance\n operations that were not related to Recovery Act projects. The time was charged\n to the grant in the Authority\xe2\x80\x99s accounting system as \xe2\x80\x9c60 Unit Rehab.\xe2\x80\x9d According\n\n\n\n 5\n\x0cto the timesheets, these charges were for maintenance staff meetings and\nmaintenance operations.\n\nThe construction manager stated that these meetings covered safety issues, so they\napplied to all workers. However, these employees did not work on Recovery Act\nprojects, so their time should not have been charged to Recovery Act grants.\nAccording to the Native American Housing Assistance and Self-Determination\nAct, since these hours were related to the Authority\xe2\x80\x99s maintenance program, they\nshould have been charged to the Authority\xe2\x80\x99s operating account, not to Federal\ngrants for rehabilitation or new construction.\n\nThe Authority did not always pay the prevailing Davis-Bacon wages. The\nAuthority paid one of its concrete workers $15.50 per hour instead of the\nprevailing Davis Bacon wage rate of $29.32. It also paid some of its employees\nbelow the prevailing wage rate for various other tasks. The following table shows\nthe hourly wage rate differences of the underpayment for the various tasks\nperformed by the affected employees. For the timesheets reviewed, the Authority\nunderpaid its employees $176.\n\n Davis- Wage rate\n Bacon Paid wage difference per\n Task wage rate rate hour\nBackhoe operator $ 39.39 $ 39.27 $ .12\nCarpenter (full time) 27.45 27.33 .12\nConcrete work 29.32 15.50 13.82\nHeating, ventilation, 30.28 20.36 9.92\nand air conditioning\nRoofing 30.17 28.78 1.39\nPlumbing 20.25 15.91 4.34\n\nThe Authority paid employees for hours not worked. The table below shows the\namounts paid to two employees for time not worked (that is, time paid for but not\nreflected on the employees\xe2\x80\x99 timesheets).\n\n Excess hours\n Employee paid Task performed Rate Excess pay\n C 7.75 Roofing $ 31.34 $242.89\n D 1 Plumbing 27.33 27.33\n Total $270.22\n\n\n\n\n 6\n\x0cThe Authority Did Not\nConsistently Adhere to its\nControl Procedures\n\n The Authority did not always adhere to its policy requiring staff to complete an\n issue slip for the materials taken from inventory and to prepare necessary journal\n entries to charge the cost of issuance to the specific unit. Although staff submitted\n the warehouse requisition form, completing the fields identifying the unit and the\n materials taken, staff failed to complete the field for the price of the materials.\n Since the forms lacked price data from the time the materials were purchased,\n many of the materials used for the respective units were not entered into the\n Authority\xe2\x80\x99s accounting system, assigning the materials to specific units.\n\n In addition, the Authority disregarded its policy requiring a signed and dated\n receiver\xe2\x80\x99s report for vendor payment. The construction staff did not forward the\n required reports to either the accounting staff or warehouse staff so the accounting\n and warehouse staff made a verbal agreement with the vendor, in which the\n vendor would invoice only for items that were delivered to the jobsites or picked\n up by Authority construction staff. The accounting staff believed that this\n procedure canceled the requirement for a separate receiver\xe2\x80\x99s report. Further,\n management told the accounts payable clerk to pay the vendor without obtaining\n the receiving report.\n\n The Authority also disregarded its policies to procure materials only for specific\n identified units worked on and not allow materials in its inventory to exceed its\n $5,000 threshold. It should have reviewed its inventory stock before approving\n additional purchases to avoid unnecessary or duplicative materials and excess\n inventory nearly a year after the grant activities were completed.\n\n The Authority lacked review processes. The warehouse requisition forms\n identifying the unit and the materials taken were neither reviewed for accuracy\n and completeness nor approved by an approving authority. In addition, the\n Authority\xe2\x80\x99s management did not review the rates and the hours for which it paid\n its employees to ensure that the correct project rates were selected and the hours\n were entered correctly.\n\n Management failed to employ appropriate management techniques and oversight.\n The Authority did not have a system in place to demonstrate that all costs were\n spent on the project. It used its own employee labor to conduct the scope of work\n assessments of the eligible units to be renovated, but it did not require its\n employees to identify these assessments on the employees\xe2\x80\x99 timesheets or require\n supervisor review and approval of time charged.\n\n\n\n\n 7\n\x0c In addition, management did not provide budgetary and expenditure reports\n regarding its projects to the program managers. If the maintenance supervisor had\n received these reports, he would have noticed that maintenance meetings were\n charged to the grant. This matter could have been resolved by reversing the\n charges and charging these costs to the operations account.\n\nHUD Lacked Assurance That\nFunds Were Used\nAppropriately and The\nAuthority Could Have Served\nMore Homes\n\n The Authority could deprive its low- and very low-income families of needed\n benefits because it might be required to reimburse HUD for transmission to the\n U.S. Treasury up to $1.2 million. It could have applied the funds it spent for\n unnecessary materials, which were being warehoused, on rehabilitating more\n private homes and its own housing stock. It also could not ensure that it received\n all the materials for which it paid and that the materials were received in good\n condition.\n\nConclusion\n\n The Authority did not track $1.2 million of Recovery Act funds adequately to\n ensure funds were spent on the projects. It should have followed the policies and\n procedures it had in place, reviewed documents for accuracy and completeness,\n and employed appropriate management techniques. If the Authority had\n adequately tracked the bulk purchases and other materials and labor, it would not\n have expended more than $177,000 on unnecessary materials and HUD would be\n assured that the materials and labor were used on the project and were used to\n benefit low-income participants.\n\nRecommendations\n\n We recommend that the Administrator of the Northwest Office of Native American\n Programs require the Authority to\n\n 1A. Provide support showing that $711,528 of materials, supplies and labor\n charges were spent on the projects and benefited eligible low-income\n participants or reimburse HUD for transmission to the U.S. Treasury from\n non-Federal funds for any expenditures it is unable to demonstrate were\n used on the projects. (Note: the total amount to be supported is\n $1,131,381. However, the following amounts appear in other\n recommendations and were, therefore, removed from this recommendation\n\n\n\n\n 8\n\x0c to avoid double counting: $111,283 from recommendation 1B, and\n $308,527 from recommendation 2A.)\n\n1B. Provide support showing that materials costing $197,836 were received\n and in acceptable condition or reimburse HUD for transmission to the U.S.\n Treasury from non-Federal funds for invoices paid without corresponding\n receiving reports ($111,283 of this amount was not shown to have been\n used on the project and will also need to be supported under\n recommendation 1A).\n\n1C. Review all other Recovery Act Native American Housing Block Grant\n invoices not reviewed as part of this audit and provide the results to HUD\n for review and approval. The Authority should reimburse HUD for\n transmission to the U.S. Treasury for any additional invoices found that\n are not supported by a proper receiving report.\n\n1D. Use its excess inventory on Native American Housing Assistance and\n Self-Determination Act of 1996 (NAHASDA)-eligible activities within a\n reasonable time or reimburse HUD for transmission to the U.S. Treasury\n $177,133 from non-Federal funds.\n\n1E. Reimburse the U.S. Treasury from its operating account $5,150 for\n ineligible maintenance staff meetings and maintenance operations charged\n to the grant.\n\n1F. Review all other payroll charges to the grants not reviewed as part of this\n audit and provide the results to HUD for review and approval. The\n Authority should reimburse the U.S. Treasury from its operating account\n for any additional maintenance staff meetings charged to the grant.\n\n1G. Provide supporting documentation showing that restitution was made to\n employees who were paid less than the Davis-Bacon wage determination\n rate or compensate the employees $176 for the unsupported wages cited in\n this report.\n\n1H. Reimburse HUD for transmission to the U.S. Treasury $270 from non-\n Federal funds for hours paid but not worked.\n\n1I. Review all payments to its employees, who charged time to the grants not\n reviewed as part of this audit, to determine whether additional wage\n restitution is owed and provide the review results to HUD for review and\n approval. If wage restitution is required, the Authority should make\n restitution to the employees affected from non-Federal funds.\n\n1J. Implement policies already in place to ensure that all costs of labor and\n materials used and charged to the projects were used on the projects.\n\n\n 9\n\x0c1K. Implement policies already in place to ensure that the receiver signs and\n dates the receiver\xe2\x80\x99s report confirming that materials have been received\n and are in acceptable condition.\n\n1L. Implement policies already in place to ensure that the value of materials\n on hand does not exceed $5,000.\n\n1M. Develop and implement policies to ensure that the unrelated grant\n activities, such as maintenance staff meetings and maintenance operations,\n are charged to its operating fund and not to Federal grants for\n rehabilitation or new construction.\n\n1N. Develop and implement policies to ensure the Authority pays employees\n at the (Davis-Bacon) rates that are applicable to work performed.\n\nWe also recommend that the Administrator of the Northwest Office of Native\nAmerican Programs\n\n1O. Conduct future monitoring to verify that the Authority follows its policies.\n\n\n\n\n 10\n\x0cFinding 2: The Authority Split Purchases That Would Have Required It\nTo Obtain Multiple Price Quotations\n\nThe Authority split purchases that would have required it to obtain multiple price quotations.\nThis condition occurred because the Authority\xe2\x80\x99s policy contradicted itself and incorrectly\npermitted it to make multiple purchases from a single source and not obtain a price quotation as\nlong as each purchase order was less than $5,000. As a result, the Authority could not\ndemonstrate that it received the best value for more than $372,000 worth of materials purchased.\n\n\n The Authority Split Purchases\n\n\n The Authority split purchases that would have required it to obtain and document\n price quotes. The Authority made multiple purchases of related items from one\n vendor on 1 day or within 1 business day of less than $5,000 each, which when\n combined, ranged from about $5,100 to almost $39,000 (see appendix D for\n details). HUD\xe2\x80\x99s Office of Public and Indian Housing Notice 2009-14 allowed\n Indian Housing Block Grant recipients to purchase goods and services costing\n less than $5,000 without obtaining and documenting price quotes to reduce the\n burden of complying with the Federal procurement process for goods and services\n of minimal cost. However, the Notice also prohibited recipients from breaking\n down a purchase into multiple purchases to meet the threshold.\n\n Based on review of the Authority\xe2\x80\x99s 2010-2012 purchase order logs of more than\n $1.1 million, the purchase orders were split on 32 separate occasions with a total\n of 112 single purchases. The table below summarizes the number of occasions on\n which the Authority split its purchases from each vendor on 1 day or within 1\n business day. The specific approval dates for each occasion for each vendor are\n shown in appendix D.\n\n Total % of % of total\n Vendor Occasion(s) purchases occasions purchases\n A 27 $302,815.83 84.4% 81.4%\n B 2 14,664.92 6.3% 3.9%\n C 1 38,956.00 3.1% 10.4%\n D 1 6,219.59 3.1% 1.7%\n E 1 9,564.50 3.1% 2.6%\n Total 32 $372,220.84 100% 100%\n\n\n\n\n 11\n\x0cThe Authority\xe2\x80\x99s Procurement\nPolicy Permitted This\nApproach\n\n The Authority\xe2\x80\x99s procurement policy permitted it to make multiple purchases from\n a single source and not obtain price quotations as long as each purchase order was\n less than $5,000. However, the Authority ignored the part of its policy stating\n that it was not to break down the purchases, under any circumstances, to meet the\n threshold.\n\nThe Authority Could Not\nDemonstrate That It Received\nthe Best Value\n\n Since the Authority split its purchases, it did not always obtain an adequate\n number of price quotations to demonstrate that it received the best value for more\n than $372,000 worth of materials purchased. The Authority could not show that it\n took the most economical approach. It should have combined purchase orders to\n one vendor for related items, which were approved on the same or the next\n business day, to determine whether it should have obtained additional quotes to\n obtain the best possible pricing.\n\nRecommendations\n\n We recommend that the Administrator of the Northwest Office of Native American\n Programs require the Authority to\n\n 2A. Provide support showing that it received the best value for $372,221 paid\n for materials it purchased or reimburse HUD for transmission to the U.S.\n Treasury from non-Federal funds for any amount that is not supported\n ($308,527 of this amount was not adequately documented as used on the\n projects and will also need to be supported under recommendation 1A if\n the costs are found by HUD to be of best value under this\n recommendation).\n\n 2B. Amend its policy to require that it combine its purchases from a single\n source, within a reasonable timeframe, to determine whether the sum\n exceeds the $5,000 threshold as this is not currently a part of their policy;\n if the sum exceeds $5,000, we recommend that the Authority be required\n to follow its policy to obtain additional price quotations to obtain the best\n pricing possible for its small purchases.\n\n\n\n\n 12\n\x0cFinding 3: The Authority Did Not Properly Report Its Recovery Act\nInformation\n\nThe Authority did not properly report its project activity descriptions, the number of homes it\nplanned to repair, the amount of its vendor payments, the total amount of payments to vendors\nper award, and the number of jobs created in FederalReporting.gov. This condition occurred\nbecause the Authority lacked review procedures and misunderstood the requirements for\ncalculating the number of jobs created. As a result, the public did not have access to an accurate\ndescription of project activities, vendor payment information, the total amount of payment to\nvendors per award, or the number of jobs created.\n\n\n The Authority Did Not Properly\n Report Information in\n FederalReporting.gov\n\n The Authority did not properly report its project activity descriptions in\n FederalReporting.gov. The project descriptions stated that the Authority provided\n grants as well as zero percent loans to homeowners. However, it renovated the\n homes by providing only grants.\n\n The Authority overstated the number of homes it planned to repair under the\n competitive grant. It originally planned to repair up to 60 units. However, on\n June 3, 2011, it amended its original application to repair 25 to 30 units, and to\n purchase and install 10 to 15 modular units to be used for relocation of residents\n while their houses were being rehabilitated. Although the Authority revised its\n reporting to reflect the purchase and installation of the modular units, it did not\n reduce the number of units to be rehabilitated as shown in its amended\n application. It also failed to report the correct number of units it repaired and the\n number of modular units it purchased and installed. The Authority rehabilitated\n 19 units and purchased and installed 12 modular units under the competitive\n grant.\n\n The Authority did not properly report the amount and number of payments to its\n vendors. The Authority overstated its payments made to four vendors by more\n than $657,000 and understated the amount paid to another vendor by almost\n $561,000 for a net overstatement of more than $96,000.\n\n Expenditures Expenditures\n Vendor incurred reported Overstated (Understated)\n A $ 410,473 $ 478,726 $ 68,253\n B 17,792 25,772 7,980\n C 61,109 81,433 20,324\n D 390,264 951,163 560,899\n\n\n 13\n\x0c E 760,912 200,013 (560,899)\n Total $1,640,550 $1,737,107 $657,456 $ (560,899)\n\nIn addition, the Authority overstated the total amount of payments it made to\nvendors that were awarded more than $25,000 and to those that were awarded less\nthan $25,000. These overstatements totaled more than $1.2 million from the\nAuthority\xe2\x80\x99s formula grant for all vendors and about $1 million from its\ncompetitive grant for vendors that were awarded more than $25,000. The\nreported vendor amounts incorrectly included salaries and benefits relating to the\nAuthority\xe2\x80\x99s in-house force account labor. The tables below show the amounts in\nthe Authority\xe2\x80\x99s accounting records and the amounts of the total vendor payments\nit reported.\n\n Total\n Total\n payments\n payments Salaries &\n Formula to vendors Total vendor\n to vendors related\n grant greater payments\n less than costs*\n than\n $25,000\n $25,000\n QuickBooks $506,567 $175,741 $682,309 $1,217,522\n Recovery Act\n reporting 620,017 1,278,914 1,898,931\n\n Difference $113,450 $1,103,173 $ 1,216,622\n*Grantees were required to report only amounts spent on vendors in FederalReporting.gov.\n\n\n Total\n Total\n payments\n payments Salaries &\n Competitive to vendors Total vendor\n to vendors related\n grant greater payments\n less than costs*\n than\n $25,000\n $25,000\n QuickBooks $1,658,848 $325,248 $1,984,096 $1,015,946\n Recovery Act\n reporting 1,658,848 1,341,152 3,000,000\n\n Difference $0 $1,015,904 $1,015,904\n*Grantees were required to report only amounts spent on vendors in FederalReporting.gov.\n\n\nThe Authority overstated the number of jobs created by reporting the number of\nemployees it hired for the projects. However, according to Office of Management\nand Budget, Memorandum M-09-21, it should have reported its job estimate totals\nby dividing the hours worked in the reporting quarter by the hours in a full-time\nschedule in that quarter.\n\n\n\n\n 14\n\x0cThe Authority Lacked Review\nProcedures and Misunderstood\nRequirements\n\n The Authority lacked review procedures. The reporting information was\n compiled and submitted by the same individual and was not reviewed by the\n supervisor to ensure that the information reported was correct. The Authority\n should have had a different individual review the information to ensure that the\n data were accurate before and after submitting the data in FederalReporting.gov.\n In addition, the Authority misunderstood the requirements for calculating the\n number of jobs created.\n\nThe Authority\xe2\x80\x99s Reporting\nLacked Transparency\n\n Because the Authority did not properly report its information in\n FederalReporting.gov, the public did not have access to accurate project activity\n descriptions, vendor payment information, or the number of jobs created.\n\nRecommendation\n\n We recommend the Administrator of the Northwest Office of Native American\n Programs require the Authority to\n\n 3A. Make the necessary changes to the project activity descriptions and all\n fields relating to final vendor payment figures in FederalReporting.gov.\n Note that the reporting system allows only the final totals to be changed;\n the quarterly jobs figures cannot be adjusted.\n\n\n\n\n 15\n\x0c SCOPE AND METHODOLOGY\n\nWe conducted fieldwork at the Yakama Nation Housing Authority, located at 611 South Camas\nAvenue, Wapato, WA, from January 15 through July 19, 2013. The audit covered the lifespan of\nthe grants from September 2009 through December 2012. To accomplish our objectives, we\n\n \xef\x82\xb7 Interviewed Authority and HUD staff;\n \xef\x82\xb7 Reviewed related laws, regulations, and requirements; a HUD monitoring report; and the\n Authority\xe2\x80\x99s general ledgers, work orders, purchase order log, Indian housing plan, annual\n performance report, Recovery Act reporting submission documentation, single audit\n reports, and policies and procedures;\n \xef\x82\xb7 Conducted site visits; and\n \xef\x82\xb7 Sampled expenditures and payroll records.\n\nFor the formula grant, we identified nearly $1.9 million in grant expenditures. Of this amount,\nmore than $638,000 was not attributed to specific units. From this population, we randomly\nselected and reviewed 60 invoices classified as materials-other consisting of fuel, materials, and\nother costs from various vendors, ranging from $300 to $6,000, totaling more than $178,000, or\n28 percent of the population and did not find any discrepancies between the source documents\nand what was reported in the Authority\xe2\x80\x99s financial and reporting system.\n\nOf the $1.9 million in expenditures, more than $1.2 million was assigned to specific units,\nmaking this population of less risk. We selected the two units with the highest labor dollars\nincurred to review. We reviewed the unit with the second highest labor expenditure of more than\n$42,000, or 4 percent of the $1.2 million. We did not review the unit with the highest labor\ndollars because the source documents were not provided in a timely manner. For this also, we\ndid not find any discrepancies between the source documents and what was reported in the\nAuthority\xe2\x80\x99s financial and reporting system.\n\nFor the competitive grant, we identified $3 million in grant expenditures. Of this amount, we\nselected and reviewed all expenditures that were classified as \xe2\x80\x9c60 Unit Rehab\xe2\x80\x9d and \xe2\x80\x9c60 Units\nRenovation.\xe2\x80\x9d This amount was more than $219,000, or 29 percent of the $761,000 in\nexpenditures not attributed to specific units. We also selected for review the two units with the\nmost expenditures and the 12 modular homes purchased totaling nearly $1.2 million, or 53\npercent of the more than $2.2 million in expenditures assigned to specific units.\n\nWe also reviewed the Authority\xe2\x80\x99s 2009, 2010, 2011, and 2012 purchase order logs of more than\n$1.1 million and selected and reviewed all of the more than $415,000 in purchase orders to one\nvendor that were issued on 1 day or a few days apart, when each of those purchase orders was for\nless than $5,000.\n\nThe Authority used QuickBooks. We did not test the reliability of the Authority\xe2\x80\x99s computer-\nprocessed data as QuickBooks is a small accounting software system that is widely accepted by\nthe accounting industry and we verified hardcopy documents to QuickBooks and found no\n\n\n 16\n\x0cexceptions. Also our testing confirmed the Authority\xe2\x80\x99s accounting staff statement that if\nQuickBooks did not show the information, then the information was not available from the\nhardcopy source documents to be recorded in QuickBooks. Our testing of the source documents\nnoted above proved this to be true. Thus we relied on QuickBooks to support our audit\nconclusions.\n\nWe conducted the audit in accordance with generally accepted government auditing standards.\nThose standards require that we plan and perform the audit to obtain sufficient, appropriate\nevidence to provide a reasonable basis for our findings and conclusions based on our audit\nobjectives. We believe that the evidence obtained provides a reasonable basis for our findings\nand conclusions based on our audit objectives.\n\n\n\n\n 17\n\x0c INTERNAL CONTROLS\n\nInternal control is a process adopted by those charged with governance and management,\ndesigned to provide reasonable assurance about the achievement of the organization\xe2\x80\x99s mission,\ngoals, and objectives with regard to\n\n \xef\x82\xb7 Effectiveness and efficiency of operations,\n \xef\x82\xb7 Reliability of financial reporting, and\n \xef\x82\xb7 Compliance with applicable laws and regulations.\n\nInternal controls comprise the plans, policies, methods, and procedures used to meet the\norganization\xe2\x80\x99s mission, goals, and objectives. Internal controls include the processes and\nprocedures for planning, organizing, directing, and controlling program operations as well as the\nsystems for measuring, reporting, and monitoring program performance.\n\n\n Relevant Internal Controls\n\n We determined that the following internal controls were relevant to our audit\n objectives:\n\n \xef\x82\xb7 Policies and procedures implemented to reasonably ensure that funds were\n spent on goods, materials, and labor for specific units that the Authority\n worked on.\n \xef\x82\xb7 Policies and procedures implemented to reasonably ensure that reliable data\n were obtained, monitored, and reported to adequately support procurement\n and contracting activities.\n \xef\x82\xb7 Policies and procedures to ensure that payments made to vendors and\n procurement activities complied with applicable laws and regulations.\n\n We assessed the relevant controls identified above.\n\n A deficiency in internal control exists when the design or operation of a control does\n not allow management or employees, in the normal course of performing their\n assigned functions, the reasonable opportunity to prevent, detect, or correct (1)\n impairments to effectiveness or efficiency of operations, (2) misstatements in\n financial or performance information, or (3) violations of laws and regulations on a\n timely basis.\n\n Significant Deficiencies\n\n Based on our review, we believe that the following items are significant deficiencies:\n\n\n\n 18\n\x0c\xef\x82\xb7 The Authority did not have controls in place to ensure that it followed its policies\n to\n o Maintain records identifying the application of funds (finding 1).\n o Obtain, sign, and date receiving reports for purchased materials (finding\n 1).\n o Purchase materials for a specific job purpose and keep extra materials of\n no more than $5,000, provided that the material could be used on other\n federally funded projects in the near future (finding 1).\n\n\xef\x82\xb7 The Authority lacked procedures to ensure that\n o Maintenance staff meeting time was charged to its operating fund and\n not to the Recovery Act projects (finding 1).\n o It paid employees the prevailing Davis-Bacon wage for the tasks they\n performed (finding 1).\n o Staff obtained additional price quotations to obtain the best pricing\n possible for the Authority\xe2\x80\x99s small purchases (finding 2).\n o Filing of required information was complete and accurate (finding 3).\n\n\n\n\n 19\n\x0c APPENDIXES\n\nAppendix A\n\n SCHEDULE OF QUESTIONED COSTS\n\n Recommendation Ineligible 1/ Unsupported Unreasonable or\n number 2/ unnecessary 3/\n\n 1A $711,528\n 1B 197,836a\n 1D $177,133\n 1E $5,150\n 1G 176\n 1H 270\n 2A 372,221b\n\n1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity\n that the auditor believes are not allowable by law; contract; or Federal, State, or local\n policies or regulations.\n\n2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program\n or activity when we cannot determine eligibility at the time of the audit. Unsupported\n costs require a decision by HUD program officials. This decision, in addition to\n obtaining supporting documentation, might involve a legal interpretation or clarification\n of departmental policies and procedures.\n\n3/ Unreasonable or unnecessary costs are those costs not generally recognized as ordinary,\n prudent, relevant, or necessary within established practices. Unreasonable costs exceed\n the costs that would be incurred by a prudent person in conducting a competitive\n business.\n\n\n\n\na\n Of the $197,836, documentation of $111,283 did not demonstrate the items purchased were used on the projects.\nTherefore, these costs will also need to be supported under recommendation 1A.\nb\n Of the $372,221, documentation of $308,527 did not demonstrate the items purchased were used on the projects.\nIf these funds are found by HUD to be the best value, they will also need to be supported under recommendation 1A.\n\n\n 20\n\x0cAppendix B\n\n AUDITEE COMMENTS AND OIG\xe2\x80\x99S EVALUATION\n\n\nRef to OIG Evaluation Auditee Comments\n\n\n\n\n January 6, 2014\n\n Ronald J. Hosking\n Regional Inspector General for Audit\n U.S. Department of Housing and Urban Development\n Office of Inspector General\n Office of Audit Region 10\n 909 First Avenue, Suite 126\n Seattle, WA 98104\n\n RE: Yakama Nation Housing Authority Comments to HUD-OIG Draft Audit Report\n\n Dear Mr. Hosking:\n\n The Yakama Nation Housing Authority (the \xe2\x80\x9cAuthority\xe2\x80\x9d) submits these written comments to\n the U.S. Department of Housing and Urban Development (\xe2\x80\x9cHUD\xe2\x80\x9d) Office of Inspector General\xe2\x80\x99s\n (\xe2\x80\x9cOIG\xe2\x80\x9d) Draft Audit Report on its audit of the Authority\xe2\x80\x99s 2009 federal stimulus grants under the Native\n American Housing and Self-Determination Act of 1996 (\xe2\x80\x9cNAHASDA\xe2\x80\x9d) and the American Recovery and\n Reinvestment Act of 2009 (\xe2\x80\x9cARRA\xe2\x80\x9d).\n\n We appreciated the opportunity to meet with the HUD-OIG auditors and the Grants\n Management Division Director of the Northwest Regional Office of Native American Programs\n (\xe2\x80\x9cONAP\xe2\x80\x9d) for an exit conference on December 23, 2013, in Wapato, Washington. The Authority\n consults regularly with ONAP Grants Management staff to ensure that the Authority is following HUD\n guidelines and policy in administering its grants under NAHASDA. These comments restate and\n supplement the verbal comments we shared at the exit conference.\n\n COMMENTS TO BACKGROUND AND OBJECTIVES (P. 3)\n\n The Authority is the Tribally designated housing entity of the Confederated Tribes and Bands\n of the Yakama Nation, which is the largest Indian Tribe in the Pacific Northwest. The Yakama Nation is\n comprised of descendents of 14 tribes and bands that were federally recognized under the Yakama Treaty\n of 1855. The 1.3 million acre Yakama Reservation is located in south central Washington, along the\n eastern slopes of the Cascade Mountain Range.\n\n According to the 2012 American Community Survey, the poverty rate nationally for American Indians is\n 29%, twice the average for all Americans. About 40% of on-reservation housing in this country is\n considered inadequate, compared to 6% of all housing nationwide (2003, National American Indian\n Housing Council). There are approximately 10,000 enrolled members of the Yakama Nation, of which\n about 60% reside on the Yakama Reservation. On this Reservation, 24% of Indian households live below\n the poverty line, and 34% are unemployed. Over 40% of the\n\n\n\n\n 21\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 2 of 17\n\n households have income of less than $25,000. The Authority houses 2,884 persons in units under\n management, or nearly half of the Yakama Nation\xe2\x80\x99s members who live on the Reservation.\n\n There is a great need for housing on the Yakama Reservation and the funding that was\n made available in 2009 through the ARRA appropriations for the Indian Housing Block Grant\n (\xe2\x80\x9cIHBG\xe2\x80\x9d) program was put to good use. The IHBG program is authorized under the Native\n American Housing and Self-Determination Act of 1996, as amended (\xe2\x80\x9cNAHASDA\xe2\x80\x9d). The\n Authority received two IHBG grants from the ARRA appropriations: a formula grant of\n $1,899,831, and a competitive grant of $3,000,000. The formula grant was based on the Authority\xe2\x80\x99s\n Fiscal Year (\xe2\x80\x9cFY\xe2\x80\x9d) 2008 IHBG allocation and was spent to replace defective steel steps on 77\n housing units with poured in place concrete steps and railings, and to improve the indoor air quality\n and weatherization of 54 housing units. The competitive grant was awarded based on a competitive\n grant proposal the Authority submitted to HUD, and was spent on the extensive repair and\n rehabilitation of 19 privately owned homes and the purchase and set up of 12 modular units, which\n were used to relocate families during the rehabilitation efforts and have since housed many Indian\n families as rental units.\n\nComment 1 The report recognizes that the Yakama Nation exercises powers of self-government, but\n leaves out that Tribal self-determination is a guiding principle of NAHASDA. The NAHASDA\n statute and regulations were terms of the Grant Agreements, as stated on the Funding\n Approval/Agreement Forms HUD-52734-B that the Authority signed to receive the grants.\n NAHASDA states that federal assistance\n\n shall be provided in a manner that recognizes the right of Indian self-\n determination and tribal self-governance by making such assistance available\n directly to the Indian tribes or tribally designated entities under authorities\n similar to those accorded Indian tribes in Public Law 93-638 (25 U.S.C. 450 et\n seq.).\n\n In Public Law 93-638, Congress declares its commitment to\n\n the establishment of a meaningful Indian self-determination policy which will\n permit an orderly transition from the Federal domination of programs for, and\n services to, Indians to effective and meaningful participation by the Indian\n people in the planning, conduct, and administration of those programs and\n services.\n\n In recognition of self-determination, NAHASDA allows a Tribal grantee to self-determine\n the specific uses of IHBG funds as long as those funds are used to \xe2\x80\x9ccarry out affordable housing\n activities,\xe2\x80\x9d as defined in NAHASDA and in the grantee\xe2\x80\x99s Indian Housing Plan (\xe2\x80\x9cIHP\xe2\x80\x9d).\n NAHASDA, Section 102. A Tribe may adopt its own Tribal prevailing wage ordinances in lieu of\n Davis Bacon wages, NAHASDA 104(b)(3). Procurements of less than $5,000 are exempt from\n \xe2\x80\x9cany otherwise applicable competitive procurement rule or procedure.\xe2\x80\x9d NAHASDA, Section\n 203(g). In these ways and others, NAHASDA recognizes Tribal self-determination in how IHBG\n grants are administered.\n\n The auditors conducted fieldwork on site at the Authority\xe2\x80\x99s offices for 7 months (p. 16), and were\n still requesting documents from the Authority in December 2013. In the exit conference the\n auditors affirmed that they had not found any spending under either of the grants that was not for\n the benefit of eligible households. The funds were spent on affordable housing activities under\n\n\n\n\n 22\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 3 of 17\n\n NAHASDA. Only two of the questioned costs were determined to be \xe2\x80\x9cineligible costs\xe2\x80\x9d under the\n grants: $5,150 paid to workers who attended safety meetings and $270 paid to workers for hours\n they did not list on their timesheets. The other questioned costs in the report are based primarily on\n the auditors\xe2\x80\x99 interpretations of regulations and the Authority\xe2\x80\x99s own policies (interpretations with\n which the Authority disagrees, as discussed in these comments), and on opinions about reasonable\n wages or the amount of materials stored in inventory.\n\n COMMENTS TO RESULTS OF AUDIT\n\n RESPONSE TO FINDING NO. 1: THE AUTHORITY DID NOT ALWAYS PROPERLY\n SPEND ITS RECOVERY ACT FUNDS. (PP. 4-10)\n\nComment 2 In the first paragraph on page 4, the report states that the Authority disregarded its control\n procedures, lacked review processes and failed to employ appropriate management techniques and\n oversight and that \xe2\x80\x9cAs a result, it completed only 19 of 60 planned units with its competitive grant.\xe2\x80\x9d\n We believe this is an unfair characterization of the Authority\xe2\x80\x99s performance and we will respond to\n each of the statements in turn. The conclusion that as a result, only a third of the planned units\n were completed is directly contradicted by the facts and should be removed from the report.\n\n At the exit conference, the auditors seemed not to have reviewed the Amended Grant\n Application, although they referred to it later in the meeting. The Amended Grant Application was\n approved by HUD and contemplated between 20 to 30 repaired units and 10 to15 modular units.\n The completion of 19 repaired units was only one short of that estimate. The grant application was\n amended so that some of the funds could be used to purchase modular units to be used to relocate\n the families whose homes were being repaired under the grants. The Authority had originally\n intended to utilize FEMA mobile units for relocation purposes, but a disastrous fire destroyed 20\n homes on the Yakama Reservation and all of the awarded FEMA mobile units were redirected to\n the fire victims.\n\n Also on page 4, the report states that \xe2\x80\x9cmore homeowners could have benefited from the\n unreasonable pay for labor and unnecessary materials stored in [the YNHA] warehouse.\xe2\x80\x9d The\nComment 3 inference is that this was a large amount, but less than $7,000 in wages has been identified as\n \xe2\x80\x9cunreasonable\xe2\x80\x9d in the view of the auditors, and that would not have covered even one additional\n unit. The stored materials are primarily metal roofing that will be used to benefit eligible families.\n This conclusion is misleading and should also be removed from the report.\n\n A. Comments to \xe2\x80\x9cThe Authority Did Not Always Properly Spend Its Grant Funds.\xe2\x80\x9d (p.\n 4)\n\n 1. Comment to \xe2\x80\x9cRecovery Act funds were not always assigned to eligible units.\xe2\x80\x9d\n (p. 4).\n\nComment 4 The report states that the auditors identified $1.3 million in costs that were not assigned to\n specific units and are, therefore, treated as unsupported costs.1 The Authority will need to review\n this number, but the auditors\xe2\x80\x99 reliance on 24 C.F.R. Section 85.20(b)(2) as requiring the Authority\n to assign all of its expenditures to specific units is misplaced.\n ________________________\n 1\n Unsupported costs include those that \xe2\x80\x9cmight involve a legal interpretation.\xe2\x80\x9d (p.20)\n\n\n\n\n 23\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 4 of 17\n\n The financial recordkeeping requirements for IHBG projects are found in 24 C.F.R.\nComment 4 Section 1000.26, which states that recipients \xe2\x80\x9cshall comply with the requirements and standards of\nComment 5 OMB Circular No. A-87, \xe2\x80\x98Principles for Determining Costs Applicable to Grants and Contracts\n with State, Local and Federally Recognized Indian Tribal Governments,\xe2\x80\x99\xe2\x80\x9d and with particular\n sections of 24 C.F.R. Part 85.\n\n Section 85.20(b)(2) states:\n\n Grantees and subgrantees must maintain records which adequately identify the\n source and application of funds provided for financially-assisted activities. These\n records must contain information pertaining to grant or subgrant awards and\n authorizations, obligations, unobligated balances, assets, liabilities, outlays or\n expenditures, and income.\n\n The auditors interpret \xe2\x80\x9crecords which adequately identify the source and application of\n funds\xe2\x80\x9d to mean that the Authority must maintain records per unit that would enable the auditors to\n visit each home and count the boards and nails in the unit against those that were purchased for that\n unit. We disagree that the plain language of Section 85.20(b)(2) or NAHASDA mandates that level\n of specificity.\n\n OMB Circular No. A-87, Item 26.a. of Attachment B, \xe2\x80\x9cMaterials and Supply Costs\xe2\x80\x9d\n states: \xe2\x80\x9cCosts incurred for materials, supplies, and fabricated parts necessary to carry out a Federal\n award are allowable.\xe2\x80\x9d OMB Circular A-87 does not require that the recipient identify each item of\n material that goes into a particular unit. The Inspector General has not found any noncompliance\n with OMB Circular A-87. OMB Circular A-133 applies to audits of IHBGs, including formula and\nComment 5 competitive grants from ARRA funds, and does not state that expenditures for affordable housing\n must be allocated to specific, individual units.\n\n Each of the grants was a source of funds for an affordable housing project, as described in\n the amended IHP (for the formula grant) and in the Amended Grant Application (for the\n competitive grant). The Authority complied with acceptable accounting practices by maintaining\n records which showed that the funds under each grant were applied to pay for materials, labor, and\n related costs incurred to carry out the award. The Authority also maintained records which\n demonstrated that the beneficiaries were eligible for the program, inventory records for materials\n purchased and stored in the warehouse, and payroll records for the work.\n\n The auditors said at the exit conference that if some of the expenditures were allocated to\n specific units then all of the expenditures should have been allocated this way. Some procurements\n were structured to apply purchases to specific units; however, absent a published standard that\n requires a per unit allocation of costs, the Authority disagrees with treating expenditures as\n unsupported because they are not allocated to specific units.\n\n Further, the standard method in construction for accounting for performance of work on a project is\nComment 6 a percentage of completion. The construction industry does not account to a particular board or\n nail. Had YNHA contracted the work on these projects, the contractor would not have the\n\n\n\n\n 24\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 5 of 17\n\n type of records the auditors are requiring. It is not reasonable to treat the Authority differently\n simply because the Authority utilized its own Tribal workforce.2\n\n 2. Comment to \xe2\x80\x9cThe Authority paid its vendors almost $196,000 without obtaining\n proof that it received all the materials ordered.\xe2\x80\x9d (p. 4)\n\n We have not yet been able to determine the basis for the $196,000. While the auditors\n have said that the documents they reviewed are in the Authority\xe2\x80\x99s conference room, the auditors\n pulled apart the documents and putting them back together will take time, according to accounting\nComment 7 staff. We understand that the auditors did not consider other types of documentation as being\n acceptable to verify deliveries. The Authority\xe2\x80\x99s policy does not prescribe the format of a receiver\xe2\x80\x99s\nComment 8 report or prohibit other methods, and the delivery of materials may be verified by a packing slip or\n invoice that is signed by an employee of the Authority.\n\n 3. Comment to \xe2\x80\x9cThe Authority purchased more than $177,000 in unnecessary\n materials. (p. 5)\n\n The majority of the materials remaining in the warehouse as of July 29, 2013 (the date\n specified in the report), were metal roofing materials. These materials were purchased in bulk to\nComment 9 obtain the best price, but due to the fire on the Reservation and the need to reprogram some of the\n competitive grant to purchase modulars for relocation, the Authority had roofing materials that it\n did not use for the home repairs. The Authority would generally return unused materials, but metal\n roofing materials cannot be returned and it would have been wasteful to dispose of the materials.\n The Authority disagrees that the materials were unnecessary. There is a regular need for roof\n repairs, and the materials will be used for affordable housing consistent with the purposes of the\n grants.\n\n 4. Comment to \xe2\x80\x9cThe Authority charged the grant for routine maintenance staff\n meetings and maintenance operations performed by maintenance staff.\xe2\x80\x9d (p. 5)\n\nComment 10 The report claims that the Authority paid $5,150 in wages to maintenance workers who\n attended safety meetings but did not work directly on the ARRA projects. The Authority disagrees\n that time spent in safety meetings needed to be assigned to specific units. The Authority will need\n time to review the documentation to be able to prepare a more complete response.\n\n 5. Comment to \xe2\x80\x9cThe Authority did not always pay the prevailing Davis Bacon\n wages.\xe2\x80\x9d (p. 5-7)\n\n The report asserts that the Authority underpaid employees a combined total of $186 below the\nComment 11 prevailing Davis Bacon wages by paying incorrect wage rates. The report does not explain how\n this was calculated, but after the exit conference the auditors provided copies of spreadsheets that\n gave the names of the employees, the pay periods, hourly wages paid for work, etc. The auditors\n also provided copies of the wage rates from March 2010 which they said they used to compute the\n\n\n _______________________________\n 2\n The auditors\xe2\x80\x99 lack of experience with Tribal projects was evident. At their first meeting with the Authority, which\n included the Chairman of the Authority, one of the auditors asked jokingly if those present were going to do a \xe2\x80\x9crain\n dance.\xe2\x80\x9d The auditors said later that this was their first IHBG audit.\n\n\n\n\n 25\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 6 of 17\n\n discrepancies, and said they had not independently determined the rates that applied to the projects.\n The Authority will need more time to review the documentation in order to prepare a complete\n response.\n\n 6. Comment to \xe2\x80\x9cthe Authority paid employees for hours not worked.\xe2\x80\x9d (p. 6)\n\n The report also asserts that the Authority paid two employees a combined total of $270.22\n for hours not worked. The Authority has had time to review its records for one of the employees,\n who the auditor found was overpaid for 8 hours or a total of $254.88. The records show that this\nComment 12 employee did work those hours, but on a different ARRA unit. Due to a miscoding in the\n accounting department, the hours worked on the other unit were mistakenly assigned in the payroll\n records to the unit the auditors reviewed. The employee worked the hours that he was paid. The\n Authority will need more time to identify and review the remaining $15.34.\n\n 7. Comment to \xe2\x80\x9cThe Authority sometimes paid unreasonable hourly rates.\xe2\x80\x9d (p. 6)\n\n The report states that the Authority paid nearly $7,000 in unreasonable hourly rates to its\n construction staff, by paying several construction employees more than the applicable Davis Bacon\n rate. In the opinion of the auditors, that the amount of the wages above the Davis Bacon rate was\n not a \xe2\x80\x9creasonable and necessary\xe2\x80\x9d cost. The Davis Bacon Act prescribes minimum wages, not\n maximum wages. HUD Program Guidance 2009-07 (ONAP) states,\n\n Section 1606 of the Recovery Act requires all laborers and mechanics employed\n by contractors and subcontractors on projects funded directly by or assisted in\n whole or in part by and through the Recovery Act to be paid wages at not less\n than\xe2\x80\xa6(Davis Bacon wages).\n\n The Authority will need more time to review the information the auditors provided after\n the exit conference, but we believe some of the differences may be traced to the wage determination\n the auditors used. If the Authority paid more than it was required to pay under Davis Bacon, that is\n not a violation of the law, as the auditors have tacitly acknowledged by not identifying these\nComment 13 amounts as ineligible costs. If the standard is whether the costs were \xe2\x80\x9cordinary, prudent, relevant or\n necessary\xe2\x80\x9d (p. 20), then we believe this should be considered in the context of NAHASDA and\n Tribal self-determination. If Indian Tribes may adopt Tribal prevailing wages in lieu of Davis\n Bacon wages, NAHASDA, Section 104(b)(3), then paying more than Davis Bacon in some\n instances should not be treated as per se unreasonable. While Yakama has not yet adopted a Tribal\n prevailing wage ordinance, whether or not a cost is \xe2\x80\x9creasonable and necessary\xe2\x80\x9d depends upon the\n circumstances of the payment.\n The report also includes a paragraph about two employees who were paid $31.79 per hour for\n \xe2\x80\x9cundefined tasks\xe2\x80\x9d while another employee performed purchasing functions for $20.65 per hour.\nComment 14 This was discussed at the exit conference and the auditors said they did not know what work the\n higher paid employees performed. The employees performed administrative duties that included\n purchasing but also other functions, such as scope of work assessments, and their compensation\n reflected the value of their construction knowledge and background. The inference that those\n employees were\n\n\n\n\n 26\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 7 of 17\n\n overpaid for their work is without support. We note that this was not included in the schedule of\n questioned costs and request that the paragraph and accompanying table be removed.\n\n B. Comments to \xe2\x80\x9cThe Authority Failed to Employ Appropriate Management\n Techniques.\xe2\x80\x9d (pp. 7-8)\n\n 1. Comment to \xe2\x80\x9cThe Authority disregarded its control procedures.\xe2\x80\x9d (p. 7)\nComment 15\n The report states that the \xe2\x80\x9cAuthority disregarded its policy requiring materials and goods\n to be charged to specific units,\xe2\x80\x9d and that \xe2\x80\x9cIts policy required staff\xe2\x80\xa6to prepare necessary journal\n entries to charge the cost of issuance to the specific unit.\xe2\x80\x9d (p. 7). On Appendix C, the report quotes\n the YNHA Procurement Policy and Procedures, V.A.1(e), which states:\n\n Issuing materials - Charging the cost of materials and supplies to the\n appropriate project for which the materials and supplies are being used is a\n primary goal of the inventory system. An issue slip will be filled and transmitted\n weekly to the Accountant. The Accountant will charge the cost of issuance to\n the appropriate programs and prepare the necessary journal entries to record the\n transaction.\n\n The statement that this policy requires materials to be \xe2\x80\x9ccharged to specific units\xe2\x80\x9d is false.\n The policy requires materials to be charged to \xe2\x80\x9cprojects\xe2\x80\x9d and \xe2\x80\x9cprograms.\xe2\x80\x9d Each of the ARRA\n grants was a project or program under this policy, and the cost of purchased materials and supplies\n was charged to the appropriate grant.\n\n The report further states that the Authority disregarded its policy requiring a signed and\n dated receiver\xe2\x80\x99s report for vendor payments. On Appendix C, the report quotes the YNHA\n Procurement Policy and Procedures, III.C, which states:\nComment 8 Receiver\xe2\x80\x99s responsibilities3 - Upon receipt of the goods, the receiver shall\n prepare the Receiver\'s Report. The report should be signed and dated. Upon\n preparation, the receiver should forward the original receiver\xe2\x80\x99s report and the\n signed copy of the vendor\'s delivery receipt (if available) to the accounting\n office.\n\n There are other methodologies for verifying receipt of purchased materials and supplies, and while\n receiver\xe2\x80\x99s reports are preferred, by using the words \xe2\x80\x9cshould\xe2\x80\x9d we believe the policy does not\n preclude other methods of verification for accounting purposes. The delivery of materials may be\n verified by reference to a packing slip or invoice that is signed by an employee of the Authority\n who receives the goods. If the auditors discounted these type of records as not meeting the\n requirements of the policy, that was an overly narrow interpretation.\n\n Finally, the report states that the Authority disregarded its policies to procure materials\nComment 15 only for specific identified units, and to not allow materials to exceed $5,000 in value. On\n Appendix C, the report quotes the following clause from page 62 of the YNHA Procurement Policy\n and Procedures:\n\n ___________________________\n 3\n The report states \xe2\x80\x9cReceiver\xe2\x80\x99s Report,\xe2\x80\x9d but the actual language in this paragraph is \xe2\x80\x9cReceiver\xe2\x80\x99s Responsibilities.\xe2\x80\x9d\n\n\n\n\n 27\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 8 of 17\n\n Inventory of Materials: The YNHA shall only procure materials for the\nComment 15 specific job purpose. Any extra materials shall be 1. Returned to the supplier\n for credit, 2. Sold as surplus using the procedures included in this section, 3.\n Inventoried at a central location, keeping the material safe and secure, provided\n that the material can be used on other federally funded projects in the near future\n (the value of this material shall not exceed $5,000), or 4. Scrap the material.\n\n The statement that this policy requires materials to be procured for \xe2\x80\x9conly for specific identified\n units\xe2\x80\x9d is false. The policy refers to \xe2\x80\x9cjob purpose,\xe2\x80\x9d and the purpose of the ARRA projects was to\nComment 9 rehabilitate homes. Most of the materials in the warehouse at the end of the project were for metal\n roofing, which cannot be returned to the supplier for credit. It would be wasteful to sell that\n material as surplus or scrap it. The material has been properly inventoried at the warehouse, which\n is a central, safe and secure location, for use on affordable housing, consistent with the purpose of\n the grants.\n\n 2. Comment to \xe2\x80\x9cThe Authority lacked review processes.\xe2\x80\x9d (p. 7).\n\n The report states that the time spent by the Authority\xe2\x80\x99s employees to conduct the scope of\n work assessments was not allocated to specific units on their timesheets and reviewed and approved\nComment 4 by the supervisor. We are not aware of any requirement that scope of work assessments be\nComment 5 allocated to specific units. The report also states that management did not provide budgetary and\n expenditure reports to the program managers, and that if the maintenance supervisor had received\n these reports he would have corrected the charges to the grant for safety meetings. The Executive\n Director of the Authority held regular, weekly meetings with its managers, which the Chief\nComment 16 Financial Officer and the Maintenance Manager attended. The ARRA projects were discussed at\n those meetings. Management provided a reasonable opportunity to its managers to ask questions\n and discuss concerns. If an error was made, it was not due to lack of available information or\n processes.\n\n The report also claims cryptically that management specifically instructed payroll to pay\n two employees $31.79 regardless of the work performed, without identifying the manager, the\nComment 13 payroll employee or the two employees. We assume this refers to the same employees who were\n discussed on pages 6-7 of the report, and for the same reasons as stated therein, this reference\n should also be removed from the report.\n\n A. Comments to \xe2\x80\x9cThe Authority Could Have Served More Homes, and HUD Lacked\n Assurance that Funds Were Used Property.\xe2\x80\x9d (p. 8)\n\n We incorporate our earlier comments.\n\n B. Comments to Conclusion (p. 8)\n\n We incorporate our earlier comments.\n\n C. Comments to the Recommendations (pp. 8-10)\n\n\n\n\n 28\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 9 of 17\n\n Recommendation 1A: Provide support showing that $709,367 (or $1,313,621) was spent\n on eligible units or reimburse the U.S. Treasury from non-Federal funds for expenditures it is\n unable to assign to a specific eligible unit.\n\n Specific per unit accounting was not required by any applicable law, regulation or\nComment 4 standard at the time the funds were spent. The Inspector General has identified no areas of\n noncompliance with OMB Circulars A-87 or A-133. The Authority complied with acceptable\n accounting practices by maintaining records showing that the funds under each grant were applied\n to purchase materials and pay for labor for the affordable housing purposes that were identified in\n the grants. The Authority also maintained occupancy records which demonstrated that the\n beneficiaries were eligible for the program, inventory records for materials purchased and stored in\n the warehouse, and payroll records for work performed.\n\n It would be a waste of resources for the Authority to have to create specific per unit\nComment 17 records for every cost and expenditure of funds under both of the grants. If there needs to be a per\n unit record for accounting purposes, then the bulk purchases and other amounts may be assigned\n based on a reasonable formula. We do not feel that there is a lawful basis to require the Authority\n to reimburse the U.S. Treasury for these amounts. The amounts were expended for affordable\n housing and by taking that amount out of the Authority\xe2\x80\x99s budget, HUD would be hurting families\n who depend on the Authority for housing.\n\n Recommendation 1B. Provide support showing that materials costing $195,793 were\nComment 8 received and in acceptable condition or reimburse U.S. Treasury.\n\n The Authority does not agree that its policy requires the accounting department to have a\n corresponding receiver\xe2\x80\x99s report for every purchase of materials before paying an invoice. Other\n types of verification than just receiver\xe2\x80\x99s reports should be acceptable. The auditors have not\n identified any instance in which the accounting department paid for materials that were not\n delivered or in acceptable condition. The Authority should not be required to reimburse the grants\n just because there is not a receiver\xe2\x80\x99s report.\n\n Recommendation 1C. Review all other Recovery Act NAHBG invoices not\n reviewed as a part of this audit and provide the results to HUD for review and approval. Reimburse\n HUD for any invoices not supported by a proper receiving report.\n\n If the Authority can verify the purchases that were reviewed with other available\n documentation (Recommendation 1B), then it should not be necessary to review every other\n invoice. If other invoices must be reviewed, then other types of verification than just receiver\xe2\x80\x99s\n reports should be accepted. Again, the Authority should not be required to reimburse the grants just\n because there is not a receiver\xe2\x80\x99s report.\n\n Recommendation 1D. Use its excess inventory on NAHASDA eligible activities\n within a reasonable time or reimburse U.S. Treasury $177,133 from non-Federal funds.\n\nComment 18 The Authority will use the materials still in its inventory for affordable housing activities under\n NAHASDA. We do not understand the statement that this amount must be supported under\n\n\n\n\n 29\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 10 of 17\n\n Recommendation 1A, when the materials have not yet been deployed. If the intent is to require the\n Authority to assign the materials to specific units in its accounting system, then please see our\n earlier comments.\n\n Recommendation 1E. Reimburse the U.S. Treasury from non-Federal funds $5,150\n for ineligible maintenance staff meetings and maintenance operations charged to the grant.\n\n As already stated, the Authority will need time to review the documentation to prepare a\n more complete response on whether these were ineligible costs under the Recovery Act projects,\n including whether the employees worked on those projects. The Authority does not agree,\nComment 19 however, that if there is a reimbursement, it should be from non-Federal funds. The workers were\n employed on affordable housing projects under NAHASDA and time spent attending safety\n meetings benefits the program.\n\n Recommendation 1F. Review all other payroll charges to the grants not reviewed,\n provide results to HUD for review and approval, and reimburse the U.S. Treasury from non-Federal\n funds for any other maintenance staff meetings charged to the grant.\n\n See above. A review of all other payroll charges would be overbroad; if a review is\nComment 20 required, the scope should be on meetings the maintenance staff were paid to attend during the\n relevant period. If it is determined they were paid incorrectly from the Recovery Act grants, then\n the cost was related to a federal program and should not be paid from non-Federal funds.\n\n Recommendation 1G. Provide supporting documentation showing restitution was\n made to employees paid less than Davis-Bacon wages or compensate them $186 from non-Federal\n funds.\n\n The Authority has not yet had the opportunity to review the documentation relied upon by\n the auditors to determine that some employees were paid less than the wages to which they were\nComment 21 legally entitled, but if this occurred and the amount is supported by the documentation, then the\n Authority will properly compensate the employees $186. The Authority does not necessarily agree,\n however, that the compensation should come from non-Federal funds, if the employees were\n working on affordable housing under NAHASDA.\n\n Recommendation 1H. Reimburse U.S. Treasury $270 from non-Federal funds for\n hours paid and not worked.\n\n The Authority can document that one of the employees, who was paid $254.88, did work\nComment 12 on the project, as discussed above. If upon review, the documentation shows that $15.34 was paid\n for time not worked, the Authority will repay that amount.\n\n Recommendation 1I. Reimburse the U.S. Treasury $6,617 for the unreasonable\n wages cited in this report.\n\nComment 13 This recommendation is understood to correspond to the earlier reference to \xe2\x80\x9cnearly\n $7,000.\xe2\x80\x9d We note that this is identified as an unreasonable cost, and not an ineligible or\n unsupported cost. No\n\n\n\n\n 30\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 11 of 17\n\n law was violated. We disagree with having to reimburse the grant solely on the basis that there\n were instances in which the Authority paid more than the minimum required by Davis Bacon.\n\n Recommendation 1J. Review all payments to employees who charged time to the\n grants not reviewed4 to determine whether additional wage restitution is owed or additional\n unreasonable wages were paid. If owed, make restitution from non-federal funds, and if\n unreasonable wages were paid, reimburse the U.S. Treasury from non-federal funds.\nComment 22\n We do not agree that the de minimus amount of wage restitution that has been identified\n warrants a complete and exhaustive review of all payroll records for all employees over the life of\n the two grants. The auditors identified only $186 in underpayments. We also do not agree that an\n exhaustive records review to identify \xe2\x80\x9cunreasonable wages\xe2\x80\x9d is warranted, for reasons already stated.\n\n Recommendation 1K. Implement policies already in place to ensure that all costs are\nComment 23 charged to corresponding units.\n\n We incorporate our earlier comments.\n\n Recommendation 1L. Implement policies already in place to ensure that the receiver\n signs and dates the receiver\'s report confirming that materials have been received and are in\n acceptable condition.\n\n We incorporate our earlier comments.\n\n Recommendation1M. Implement policies to ensure that value of materials on hand\n does not exceed $5,000.\nComment 24\n We incorporate our earlier comments. The Authority owns and operates its own\n warehouse, which can accommodate more than $5,000 of materials safely and securely. If this is\n against policy, then the Authority may consider amending its policy.\n\n Recommendation 1N. Develop and implement policies to ensure that unrelated\n activities are not charged to grants for rehabilitation or new construction.\n\n The Authority will review its policies and consider any necessary amendments.\n\n Recommendation 1O. Develop and implement policies to ensure that YNHA pays at\n Davis Bacon rates or uses appropriate personnel.\n\n The Authority will review its policies and consider any necessary amendments.\n\n Recommendation 1P. ONAP should conduct future monitoring to ensure that the\n Authority follows its policies.\n\n\n\n\n __________________________\n 4\n At the exit conference, the auditors clarified that this means to review the payments that were not reviewed in this\n audit, not the grants not reviewed in this audit.\n\n\n\n\n 31\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 12 of 17\n\n The report has not established that the Authority failed to follow its policies. Any\nComment 15 additional monitoring must be in accordance with NAHASDA.\n\n II. FINDING 2: THE AUTHORITY SPLIT PURCHASES TO AVOID THE $5,000\n THRESHOLD THAT WOULD REQUIRE IT TO OBTAIN MULTIPLE PRICE\n QUOTATIONS. (PP. 11-12)\nComment 25\n The report states that the Authority\xe2\x80\x99s policy \xe2\x80\x9ccontradicted itself and incorrectly permitted it to make\n multiple purchases from a single source and not obtain a price quotation as long as each purchase\n order was less than $5,000,\xe2\x80\x9d resulting in the Authority not being able to \xe2\x80\x9cdemonstrate that it\n received the best value for more than $372,000 worth of materials purchased.\xe2\x80\x9d\n\n Section 203(g) of NAHASDA authorizes micro-purchases utilizing IHBG grants and\n states:\n\n DE MINIMUS EXEMPTION FOR PROCUREMENT OF GOODS AND\n SERVICES. Notwithstanding any other provision of law, a recipient shall not be\n required to act In accordance with any otherwise applicable competitive\n procurement rule or procedure with respect to the procurement, using a grant\n provided under this Act, of goods and services the value of which is less than\n $5,000.\n\n The report does not mention this statute in Appendix C. Nor does it identify any other provision of\n law that the Authority violated when purchasing materials valued at under $5,000.\n\n Appendix C lists 24 C.F.R. Section 85.36(d)1, which pertains to small purchase procedures.\nComment 26 Under the plain language of Section 203(g) of NAHASDA, purchases of less than $5,000 are\n covered by a \xe2\x80\x9cde minimus exemption\xe2\x80\x9d from otherwise applicable competitive procurement rules.\n The only reference we found in 24 C.F.R. Section 85.36 to dividing purchases appears at 24 C.F.R\n 85.36(e)2.iii, which refers to "Dividing total requirements, when economically feasible, into smaller\n tasks or quantities to permit maximum participation by small and minority business, and women\'s\n business enterprises." We have not found a law or regulation that required the Authority to\n aggregate its purchases.\n\n A. Comments to \xe2\x80\x9cThe Authority Split Purchases.\xe2\x80\x9d (p. 11).\n\n The report claims that the Authority split purchases to avoid having to obtain and document\n price quotations. On Appendix D, the report identifies 112 separate purchases from 5 different\nComment 27 vendors and says those purchases should have been combined into 32 purchases based on the dates\n the purchase orders were approved. Even if combined, all of these purchases would have been\n small purchases and the majority would still be under $10,000, even in the aggregate. Under the\n Authority\xe2\x80\x99s policy, small purchases required three quotations by phone or other informal procedure.\n YNHA Procurement Policies and Procedures, par. V.E.\n\n\n\n\n 32\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 13 of 17\n\n Bid splitting by definition is dividing purchases for the purpose of avoiding competition.\nComment 28 Appendix C to the report includes a reference to HUD Notice PIH-2009-14 (TDHEs),5 which\n states:\n\n The Procurement or Contracting Officer should be aware of the prohibition\n against breaking down requirements of a purchase for the purpose of bid\n splitting to avoid the requirements that apply to larger purchases.\n\n The notice does not identify an applicable law or regulation for the \xe2\x80\x9cprohibition,\xe2\x80\x9d but the focus is\n on dividing purchases for the purpose of avoiding competition. The auditors do not consider\n whether there were reasons that the Authority made smaller purchases, but just assume that it was\n to avoid having to obtain three price quotations by phone.\n\n The Authority is not able to respond as to each of the procurements without more\nComment 29 information, but there were many different reasons that the Authority would make smaller\n purchases other than to avoid a phone procurement. Purchase orders were prepared and submitted\n throughout the week, so the fact that they were signed on the same day does not point to bid\n splitting. We note that there is no finding in the report that the prices were not reasonable. The\n Authority is situated in a rural area, so there were a limited number of vendors from which the\n Authority could obtain its materials, and based on its experience with the vendors, the Authority\n could determine the costs to be reasonable. HUD Notice PIH-2009-14 (TDHEs) states:\n\n Under a Micro Purchase, the Procurement or Contracting Officer determines\n reasonableness based on prior purchases of a similar nature or other source of\n information. When the purchase order is signed, it signifies that the cost has\n been determined to be reasonable.\n\nComment 30 Both the Authority and its vendors had limited space to store bulk purchases. It was also not\n always possible to predict the materials that would be required for a repair, because unexpected\n conditions were regularly encountered that required more extensive work than was originally\n anticipated. The Authority made some smaller purchases to help track some of the costs by unit. In\n short, there are many other reasons for making smaller purchases, other than to avoid competition.\n\n B. Comments to \xe2\x80\x9cThe Authority\xe2\x80\x99s Procurement Policy Permitted this Approach.\xe2\x80\x9d (p.\n 12)\n\n The basis for the statement that the Authority\xe2\x80\x99s policy \xe2\x80\x9ccontradicted itself\xe2\x80\x9d is unclear.\n The Authority\xe2\x80\x99s policy on micro-purchases is identical in all relevant respects to the sample policy\n HUD recommended for TDHEs in HUD Notice PIH-2009-14 (TDHEs).6\n\n HUD\xe2\x80\x99s sample policy:\nComment 25\n For purchases of less than $5,000, also known as Micro Purchases, only one price quote is required,\n provided the quote is considered reasonable. Quotes may be\n\n\n __________________________\n 5\n A HUD notice is not adopted under the federal rulemaking process and does not have the force of law.\n 6\n The Authority\xe2\x80\x99s Procurement Policies and Procedures handbook was originally adopted in 2001 and was modeled on\n the HUD Handbook 7460.8 REV 1, \xe2\x80\x9cProcurement Handbook for Public and Indian Housing Authorities\xe2\x80\x9d (1/93).\n\n\n\n\n 33\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 14 of 17\n obtained orally (either in person or by telephone), by catalog, fax, or email. If the\n purchase is made for reasons other than price, the file must clearly describe the\n reason for the purchase. Under no circumstances will a purchase be broken down\n into more than one action in order to meet the Micro Purchase threshold. The\n Micro Purchase must be documented by an authorized purchase order or\n contract.\n\n The Authority\xe2\x80\x99s policy:\n\n For small purchases of less than $5,000, (except for contracts of $2,000 or more\nComment 31 involving labor), only one price quote is required, provided the quote is\n considered reasonable. Quotes may be obtained orally (either in person or by\n telephone), by catalog, fax, or email. If the purchase is made for reasons other\n than price, the file must clearly describe the reason for the purchase. Under no\n circumstances will a purchase be broken down into more than one action in\n order to meet the Micro Purchase threshold. The Micro Purchase must be\n documented by an authorized purchase order or contract.\n\nComment 32 The report states that the Authority \xe2\x80\x9cignored the part of its policy stating that it was not to\n break down the purchases, under any circumstances, to meet the threshold.\xe2\x80\x9d This assumes that each\n of the purchases identified by the auditors was a single purchase, which was then broken down for\n the purpose of avoiding competition. The policy does not prohibit breaking down purchase orders\n for other reasons, and there is no requirement that smaller purchases be aggregated into larger\n purchases.\n\n B. Comments to \xe2\x80\x9cThe Authority Could Not Demonstrate That It Received the Best\nComment 33 Value.\xe2\x80\x9d (p. 12).\n The report states that the Authority was not able to demonstrate \xe2\x80\x9cbest value\xe2\x80\x9d because it\n did not obtain more than one price quotation for purchases under $5,000. Purchases under $5,000\n do not require documentation of \xe2\x80\x9cbest value.\xe2\x80\x9d As stated in HUD Notice PIH-2009-14 (TDHEs),\n \xe2\x80\x9cWhen the purchase order is signed, it signifies that the cost has been determined to be reasonable.\xe2\x80\x9d\n See also NAHASDA, Section 203(g).\n\n The report states that the Authority \xe2\x80\x9cshould have combined purchase orders to one vendor\nComment 26 for related items\xe2\x80\xa6to determine whether it should have obtained additional quotes to obtain the best\n possible pricing.\xe2\x80\x9d (p. 12) The report does not state any law or rule that requires an IHBG grantee\n to aggregate its purchases and we are not aware of one that would apply here.\n\n C. Comments to the Recommendations (p. 12)\n\n Recommendation 2.A. Provide support showing that the Authority received the best\n value for $372,221 worth of materials it purchased or reimburse the U.S. Treasury from nonfederal\n funds for any amount that is not supported.\n\n\n\n\n 34\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 15 of 17\n\n The auditors explained that the exit conference that the amount they would recommend to\nComment 34 be reimbursed was not the entire $372,221, but the difference between the \xe2\x80\x9cbest value\xe2\x80\x9d cost and the\n actual cost. This should be clarified in the recommendations.\n\n The report does not state how the \xe2\x80\x9cbest value\xe2\x80\x9d is to be determined. It would not be\n appropriate to require the Authority to aggregate the 112 purchases into 32 purchases (as the report\n does in Appendix D) and then evaluate whether there could have been a cost savings, because the\nComment 35 Authority was not required to aggregate its purchases. If there is evidence that any of the purchases\n was intentionally split, there still may have been other reasons for dividing the purchase other than\n to avoid competitive procurement, in which case bid splitting cannot be established. We do not\n believe there is a legal basis for requiring the Authority to document \xe2\x80\x9cbest value\xe2\x80\x9d for a micro-\n purchase or reimburse the grant.\n\n Recommendation 2.B. Amend the Authority\xe2\x80\x99s policy to require that purchases from\n a single source, within a reasonable timeframe, be combined to determine whether they exceed the\n $5,000 threshold, and if so, obtain additional price quotations.\n\nComment 26 The report does not identify any legal basis for requiring the Authority to amend its\n policy. Sometimes aggregating purchases may make sense, but there may be good reasons for not\n aggregating purchases, as recognized in 24 C.F.R. Section 85.36(e)2.iii, and as already discussed.\n\n III. FINDING 3: THE AUTHORITY DID NOT PROPERLY REPORT ITS\n RECOVERY ACT INFORMATION (PP. 13-15)\n\n The Authority acknowledges that some errors occurred in its reporting utilizing the\nComment 36 FederalReporting.gov system. The project descriptions stated that the Authority would offer zero\n percent loans and grants, which was accurate when written. The initial plan was to use zero percent\n loans, secured by mortgages, for some of the homes and that the loans would \xe2\x80\x9cconvert\xe2\x80\x9d to grants\n over a 10-year period. When the Bureau of Indian Affairs was unable to approve trust land\n mortgages in a timely manner, the Authority decided not to use loans.\n\n The report also states that the Authority overstated its payments made to four vendors.\n The ARRA guidance for recording payments to vendors was not very clear and the Authority\n reported certain vendor payments in a cumulative fashion, and reported the number of employees it\nComment 37 hired rather than the FTEs of the jobs that were funded. The Authority\xe2\x80\x99s reporting methodology did\n not cause any general ledger duplication of payments. Given the lack of clear guidance, having the\n reporting information reviewed by the supervisor may not have made much difference. We\n understand these were common reporting errors among ARRA grantees. Any lack of transparency\n was certainly not purposeful.\n\n Recommendation 3A. Make the necessary changes to reports on FederalReporting.gov.\n The Authority agrees with the recommendation to make the necessary changes to the\n project descriptions and fields relating to final vendor payment figures in FederalReporting.gov. If\n it were possible, the Authority would also change the jobs information, but unfortunately those\n numbers cannot be adjusted.\n\n\n\n\n 35\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 16 0f 17\n\n\n COMMENTS TO INTERNAL CONTROLS: SIGNIFICANT DEFICIENCIES (P. 18)\n\n Our comments to the deficiencies and lack of procedures identified in the report are as follows:\n\nComment 4 A. Comment to \xe2\x80\x9cThe Authority did not have controls in place to ensure that it followed\n its policies to\xe2\x80\xa6\xe2\x80\x9d\nComment 15\n 1. Maintain records identifying the source and application of funds. We believe the\n records identified the source and application of funds in compliance with the applicable regulations\n and circulars. We do not believe HUD should find a significant deficiency solely on the basis that\n not all costs were identified to a specific unit.\n\nComment 8 2. Obtain, sign and date receiving reports for purchased materials. We believe\n there are other ways to document and verify the receipt of purchased materials. The Authority\xe2\x80\x99s\n policy does not proscribe the use of other methods, and we do not believe there is a basis for a\n determination of a significant deficiency on the basis that not all purchases have receiving reports.\n\nComment 9 3. Purchase materials for a specific job purpose and keep extra materials of no\n more than $5,000. We believe purchases are made for a job purpose even when they are not\n assigned to a specific identified unit, and under certain circumstances it may be more economical\n for the Authority to store more than $5,000 of materials in its warehouse.\n\n B. Comment to \xe2\x80\x9cThe Authority lacked procedures to ensure that...\xe2\x80\x9d\n\n 1. Maintenance staff meeting time was charged to its operating fund and not to the\nComment 16 grants. If this occurred, then it was an isolated mistake. Managers knew that only the labor costs\n associated with the two projects should be charged to the grant. The Executive Director also held\n weekly managers\xe2\x80\x99 meetings to provide an opportunity for the managers to exchange relevant\n information around a conference table.\n\n 2. It paid employees the prevailing Davis-Bacon wage for the tasks they performed.\nComment 22 The report identifies only $186 in underpayments. The Authority will evaluate the circumstances\n and determine whether it needs to revise its procedures, but given the total amount of wages paid on\n these two projects we do not agree that $186 represents a significant deficiency.\n\n 3. Staff obtained additional price quotations to obtain the best pricing possible for\nComment 26 small purchases. We do not agree that it was a significant deficiency not to have procedures in\n place to aggregate micro purchases, when there was no regulation or circular that required\n aggregation.\n\n 4. Filing of information was complete and accurate. We agree that there were\nComment 36 some errors in reporting, but we do not agree that the reason was a lack of internal procedures.\nComment 37 HUD provided limited guidance in how to report the vendor payments and the job FTEs and many\n grantees were confused.\n\n\n\n\n 36\n\x0c Letter to Ronald J. Hosking\n January 6, 2014\n Page 17 of 17\n\n COMMENTS TO SCHEDULE OF QUESTIONED COSTS (P. 20)\n\nComment 38 The schedule of questioned costs shows that only .3% of the questioned costs are considered to be\n \xe2\x80\x9cineligible costs,\xe2\x80\x9d meaning the auditors believe those costs are not allowable by law. Those are the\n costs of safety meetings and hours not worked. The bulk of the questioned costs, 87.1% are\n identified as \xe2\x80\x9cunsupported costs.\xe2\x80\x9d The report explains that\n\n Unsupported costs are those costs charged to a HUD-financed or HUD-insured\n program or activity when we cannot determine eligibility at the time of the audit.\n Unsupported costs require a decision by HUD program officials. This decision,\n in addition to obtaining supporting documentation, might involve a legal\n interpretation or clarification of departmental policies and procedures.\n\n That includes the costs not assigned to specific identified units, those paid without receiver\xe2\x80\x99s\n reports, split purchases, and de minimus underpayments under Davis Bacon. The remaining 12.6%\n are identified as \xe2\x80\x9cunreasonable costs\xe2\x80\x9d and include the stored materials and payments above Davis\n Bacon.\n\n We have responded to each of the costs in our comments. With 99.7% in costs identified\n as either \xe2\x80\x9cunsupported\xe2\x80\x9d or \xe2\x80\x9cunreasonable,\xe2\x80\x9d we anticipate there will be the opportunity to work with\n the HUD ONAP officials to address the issues we have raised in these comments and others as they\n arise. We have had a positive working relationship with the Regional HUD ONAP staff and we\n anticipate being able to work through these findings. Our comments are, of course, preliminary,\n because we either do not have the source information or we have not had the time yet to analyze it.\n We have been advised that in order to obtain a copy of the auditors\xe2\x80\x99 working papers, we will need\n to submit a Freedom of Information Act (\xe2\x80\x9cFOIA\xe2\x80\x9d) request after the report is published.\n\n We appreciate the opportunity to provide these comments. If there are any questions, I\n may be reached at (509) 877-6171.\n Sincerely,\n\n William Picotte, Executive Director\n Yakama Nation Housing Authority\n\n\n\n\n 37\n\x0c OIG Evaluation of Auditee Comments\n\nComment 1 The Authority stated that the report recognizes that the Yakama Nation\n exercises powers of self-government, but leaves out that Tribal self-\n determination is a guiding principle of NAHASDA. We agree that Tribal\n self-determination is a guiding principle within the constraints of\n NAHASDA.\n\nComment 2 The Authority believed our statement \xe2\x80\x9cAs a result, it completed only 19 of\n 60 planned units with its competitive grant\xe2\x80\x9d was an unfair characterization\n of the auditee\xe2\x80\x99s performance, contradicted the facts, and should be\n removed from the report. We relied on the Authority\xe2\x80\x99s original\n application, its final Recovery Act report submission as of September\n 2012, and its 2011 annual performance plan in which it stated that it\n planned to repair up to 60 homes, and purchase up to 15 modular homes.\n Although the Authority provided a copy of the signed approval for the\n purchase of the 12 modular homes, there was not a signed amended\n application reducing the number of units to be repaired and the HUD\n approval did not mention the decrease in the number of planned units for\n rehabilitation. However, as a result of HUD\'s assertion that the reduction\n in the number of units to be rehabilitated was approved, we changed our\n effect to state that the Authority could not demonstrate that it spent $1.2\n million of grant funds on eligible housing activities.\n\nComment 3 The Authority believed our conclusion that \xe2\x80\x9cmore homeowners could have\n benefited from the unreasonable pay for labor and unnecessary materials\n stored in [the YNHA] warehouse\xe2\x80\x9d is misleading and should be removed\n from the report because less than $7,000 in wages that was identified as\n \xe2\x80\x9cunreasonable\xe2\x80\x9d would not have covered even one additional unit. As a\n result of the auditee\xe2\x80\x99s response and our discussions with HUD, we\n removed the unreasonable wages from the report. However, we also\n identified $177,000 in unnecessary materials that remained in inventory\n and could have been used to benefit eligible families.\n\nComment 4 Part 1000.28 of the Native American Housing And Self-Determination\n Act (NAHASDA) requires the Authority, as a self-governance Indian\n tribe, to have administrative requirements, standards and systems that\n meet or exceed the comparable requirements of 24 CFR 1000.26. This\n requires the Authority to meet requirements in 24 CFR 85.20, which\n requires grantees to maintain financial records that are accurate, current,\n and complete and that adequately identify the source and application of\n funds provided for assisted activities. It also requires financial\n information to be related to performance or productivity data, including\n the development of unit cost information whenever appropriate. The\n\n\n 38\n\x0c Authority could not demonstrate that bulk materials purchased and labor\n paid with Recovery Act grant funds were used in the performance of the\n work and to benefit eligible units and recipients.\n\n In addition, Federal Regulations at 24 CFR 1000.156, as clarified by HUD\n Notice PIH 2010-47, maintains that the Authority, \xe2\x80\x9c\xe2\x80\xa6is responsible for\n ensuring that the amount of funds from all sources used to construct each\n unit does not exceed the TDC [total development cost] limits\xe2\x80\xa6\xe2\x80\x9d and that\n units that improperly exceed total development cost limits without\n appropriate HUD approval will not be considered to be \xe2\x80\x9c\xe2\x80\xa6affordable\n housing\xe2\x80\xa6\xe2\x80\x9d All Indian Housing Block Grant funds expended on such\n units will be disallowed. Consequently, it needs to know the amount of\n block grant funds that went into each unit to demonstrate that total\n development cost limits were not exceeded.\n\n Further, Section 205 (a)(2) of the NAHASDA requires each dwelling unit\n to remain affordable according to binding commitments for the remaining\n useful life of the property. The useful life restrictions in the binding\n commitments, according to HUD program guidance No. 2007-07, provide\n that the NAHASDA funds invested in a property be refunded, either in\n full, or as a prorated amount in the event of a default. Consequently, the\n Authority needs to know the amount of block grant funds that went into a\n specific unit to determine the amount to be refunded in the event of\n default.\n\n We modified the finding to include additional information and the\n additional criteria are now included in appendix C. In addition, we\n requested further documentation on the Authority\xe2\x80\x99s calculation of total\n development costs and the useful life of the units it assisted with these\n grants, but it did not provide the support.\n\nComment 5 The Authority stated that we have not found any noncompliance with\n OMB Circular A-87, and that OMB Circular A-133 applies to audits of\n Indian Housing Block Grants and does not state that expenditures for\n affordable housing must be allocated to specific, individual units. It also\n stated that it complied with acceptable accounting practices by\n maintaining records which showed that the funds under each grant were\n applied to pay for materials, labor, and related costs incurred to carry out\n the award. Cost principles in 2 CFR 225 (OMB Circular A-87) state that,\n \xe2\x80\x9conly materials and supplies actually used for the performance of a\n Federal award may be charged as direct costs.\xe2\x80\x9d We did not dispute that\n the Authority complied with acceptable accounting practices. However,\n although the Authority stated that it maintained these records and applied\n the costs to the grants, the Authority could not demonstrate that it used the\n materials purchased and the labor charged on the eligible projects. This\n criterion was added to appendix A. Also, see Comment 4.\n\n\n 39\n\x0cComment 6 Whether the construction industry accounts for its performance of work on\n a project using the percentage of completion method is irrelevant.\n According to 2 CFR 225 Appendix B, Selected Items of Cost, number 26,\n \xe2\x80\x9c\xe2\x80\xa6only materials and supplies actually used for the performance of a\n Federal award may be charged as a direct cost.\xe2\x80\x9d The Authority must show\n the materials were used in the performance of the award.\n\nComment 7 The Authority claimed that it had not had time to determine the basis for\n the $196,000 as it would take time to put together the documents that were\n pulled apart and reviewed by the auditor. The Authority\xe2\x80\x99s documentation\n (purchase orders, invoices, checks, and timesheets) was contained in boxes\n it provided to the auditors. However, because the Authority\xe2\x80\x99s filing\n system within these boxes was a challenge to work with, it was agreed that\n Authority staff would pull the documentation from those boxes and\n provide it to the auditors. Upon completion of the fieldwork, the auditors\n presented the documentation back to the Authority in the condition in\n which it had been received.\n\nComment 8 We did not take exception to documentation of delivery receipts as long as\n there was evidence that the Authority received the materials and goods in\n the correct quantity and quality. For example, a purchase order that was\n stamped, signed, and dated was considered acceptable. We found that use\n of only a vendor\xe2\x80\x99s invoice was unacceptable to document receipt of the\n correct quantity and quality of materials since no one compared the\n vendor\xe2\x80\x99s invoice to what was received.\n\nComment 9 Note the date specified in the report is July 19, 2013, not July 29, as stated\n in the response. The Authority purchased $38,366 of additional inventory\n after it stopped charging labor to the formula grant projects at the end of\n June 2011. Also, the Authority claimed that it purchased roofing materials\n in bulk to obtain the best price, but needed to reprogram some of the grant\n funds due to a fire so did not use all of these roofing materials. However,\n review of its accounting system showed the Authority purchased $21,360\n of roofing materials on March 16, 2011, and $22,800 on August 25, 2011.\n These purchases were made after the February 14, 2011 fire and after it\n knew that it was not going to repair as many homes as shown in its grant\n application. In addition, the second of these purchases was made after the\n Authority received approval of its amended grant application.\n\nComment 10 The Authority disagrees that time spent in safety meetings needed to be\n assigned to specific units. We rephrased the audit report to delete the\n wording, \xe2\x80\x9c\xe2\x80\xa6and was not allocated to particular units\xe2\x80\x9d in this instance\n because it detracted from the issue that these costs should not have been\n charged to the grant.\n\n\n\n 40\n\x0cComment 11 The Authority stated that the report did not explain how we calculated the\n underpayment of the prevailing Davis Bacon wages, and that during the\n exit we stated that we used the March 2010 wage rates. We used the wage\n rates adopted by the Authority at the beginning of the grant period to test\n and recalculate the labor costs. We also corrected this amount to be $176\n as pointed out during the exit conference.\n\nComment 12 The timesheet in question showed 10.25 hours worked on the days in\n question, but 18 hours were entered into the system. When asked about\n the discrepancy, the Authority was not able to provide documentation to\n support this difference. If the Authority is now able to produce the\n documentation, it should work with HUD to resolve the recommendation.\n\nComment 13 The Authority stated that paying more than it was required to pay under\n Davis Bacon was not a violation of the law. We considered the\n Authority\xe2\x80\x99s comment and removed this from the report because the Davis\n Bacon Act addresses the minimum wage rate, not the ceiling rate.\n\nComment 14 One employee told us he worked on administrative tasks such as typing up\n purchase orders and scope of work assessments as well as coordinating\n purchases for the supervisors by calling or faxing for bids, whichever\n means was called for in the particular circumstance. The other employee\n was no longer with the Authority at the time of our payroll review and was\n unavailable to be interviewed. However, although one employee\n described some activities he performed, the Authority did not provide\n documentation of the \xe2\x80\x9cother\xe2\x80\x9d work that was performed. The Authority\n needs to provide documentation to HUD for resolution.\n\n These costs were included in the unsupported costs in Recommendation\n 1A and in the Schedule of Questioned costs.\n\nComment 15 The Authority\xe2\x80\x99s policy requires that costs be charged to the \xe2\x80\x9cappropriate\n project\xe2\x80\x9d or \xe2\x80\x9cappropriate programs.\xe2\x80\x9d However, the Authority\xe2\x80\x99s policy also\n states that an issue slip (requisition form) will be filled and transmitted\n weekly to the accountant. This slip includes detailed information for\n charging the costs to specific units such as the address of the unit, the\n workorder number, and the materials unit cost. This form was not always\n complete.\n\nComment 16 Although the Executive Director of the Authority held regular, weekly\n meetings with its managers and discussed the Recovery Act projects, the\n maintenance program manager said that no budgetary and expenditure\n reports were provided to the program managers for review to identify\n whether maintenance labor was incorrectly charged to Recovery Act\n grants and he was not aware that maintenance costs were charged to the\n grants.\n\n\n 41\n\x0cComment 17 The Authority claimed that it would be a waste of resources for it to have\n to create specific per unit records for every cost and expenditure of funds\n under both of the grants. The Authority had already created and assigned\n accounting codes to each individual unit that it worked on in its\n accounting software as it had for the $3.5 million to which the audit did\n not take exception. It needed to do this to determine the remaining useful\n life of the property it assisted to comply with the criteria cited in comment\n 4.\n\nComment 18 As stated in comment 4, \xe2\x80\x9conly materials and supplies actually used for the\n performance of a Federal award may be charged as direct costs.\xe2\x80\x9d\n Inventory held in the Authority\xe2\x80\x99s warehouse has not been used for the\n performance of a Federal award. Further, the grants were completed about\n 1 \xc2\xbd years ago and all materials purchased should have been used on the\n projects at that time.\n\nComment 19 The Authority does not agree that if there is a reimbursement to be made\n for the maintenance staff meetings and maintenance operations, it should\n be from non-Federal funds. We rephrased the recommendation to state\n that the reimbursement should be made from the Authority\xe2\x80\x99s operating\n account rather than from non-Federal funds.\n\nComment 20 The Authority stated a review of all other payroll charges would be\n overload; if a review is required, the scope should be on meetings the\n maintenance staff were paid to attend during the relevant period.\n Reviewing all payroll charged to the Recovery Act projects should\n identify any ineligible costs charged to the grants in addition to\n maintenance meetings. Also see comment 19.\n\nComment 21 We have rephrased the recommendation to delete the requirement that the\n restitution come from non-Federal funds because the Authority should\n have compensated the employees from its operating account.\n\nComment 22 We reviewed labor charges to two units rehabilitated with competitive\n grant funds. Of the 20 pay periods reviewed, the Authority made errors\n for multiple employees in 14 pay periods or 70 percent of the time. This\n was a pervasive problem on these units for this grant. Therefore, the\n Authority should be required to review all payments charged to the grants\n to determine whether additional wage restitution is owed.\n\nComment 23 After review of the auditee and HUD\'s comments, we removed this\n recommendation from the report because we are emphasizing that the\n costs should be attributed to the project.\n\n\n\n\n 42\n\x0cComment 24 The Authority stated that it owns and operates its own warehouse, which\n can accommodate more than $5,000 of materials safely and securely. If\n this is against policy, then it may consider amending its policy. We\n quoted the policy and made the recommendation based on the policy that\n was in effect during the scope of the audit.\n\nComment 25 The Authority\xe2\x80\x99s policy adopted the provisions of the HUD Office of\n Public and Indian Housing Notice 2009-14. Its policy states, \xe2\x80\x9cunder no\n circumstances will a purchase be broken down into more than one action\n in order to meet the Micro Purchase threshold.\xe2\x80\x9d This is contradicted by\n the statement in the Authority\xe2\x80\x99s policy, which states, \xe2\x80\x9cSingle purchases for\n the purpose of this policy and procedure shall be considered to mean the\n total cost of one or more similar items to be obtained at any one time from\n a single source and listed on a single purchase order.\xe2\x80\x9d Consequently, by\n creating multiple purchase orders under $5,000 each, the Authority was\n able to circumvent the requirement for obtaining 3 price quotations.\n\nComment 26 Regulations at 24 CFR 85.36(b)(4) state, \xe2\x80\x9cGrantee\xe2\x80\xa6will provide for a\n review of proposed procurements to avoid purchase of unnecessary or\n duplicative items. Consideration should be given to consolidating or\n breaking out procurements to obtain a more economical purchase.\xe2\x80\x9d This\n criterion has been added to appendix C.\n\nComment 27 We agree that the purchases listed in appendix D if combined would still\n be under $10,000 even in aggregate. However, since they would be over\n $5,000, the Authority would have been required by its policy to obtain\n three quotations, documented in writing or by fax for each.\n\nComment 28 We identified specific evidence of splitting purchases. On June 1, 2010,\n the Authority obtained an estimate for storage containers from one vendor;\n one type of container at $3,995 and another type of container at $3,495\n with a $125 delivery fee. The Authority purchased two containers totaling\n $8,240 on two separate purchase orders on the same day; P10-7171 was\n for $4,120 and P10-7172 was for $4,120. The Authority did not obtain\n additional price quotes to obtain the best possible pricing. There was no\n documentation why the purchase was made on two separate purchase\n orders other than \xe2\x80\x9c\xe2\x80\xa6no bid required\xe2\x80\xa6\xe2\x80\x9d\n\n On July 12, 2010, the Authority obtained an estimate of $5,153.40 from\n one vendor for various construction supplies. The estimate shows a hand-\n drawn line and total about half way down, indicating the Authority split\n this estimate into two separate purchase orders, P10 7376 for $1,197.90,\n and P10 7377 for $3,955.70. These were separately invoiced on August 3,\n 2010. This indicated that the split of the purchase was intentional.\n\n\n\n\n 43\n\x0cComment 29 The Authority stated that it was not able to respond as to each of the\n procurement issues without more information. It also stated that there\n were many reasons it would make smaller purchases other than to avoid a\n phone procurement, and that purchase orders were prepared and submitted\n throughout the week. However, we noted that the purchase orders\n questioned were not only signed on the same day, but the purchase order\n dates were the same day or within one day. The Authority is correct that\n the audit did not find that the costs were unreasonable. We also did not\n find that the costs were reasonable and so we recommend that the\n Authority provide documentation supporting that it received the best value\n for the materials it purchased or reimburse HUD for the transmission to\n the U.S. Treasury from non-Federal funds for any amount that is not\n supported.\n\nComment 30 The Authority stated that it and its vendors had limited space to store bulk\n purchases, and that it was also not always possible to predict the materials\n that would be required for a repair. It also said it made some smaller\n purchases to help track some of the costs by unit and bought smaller\n purchases for many reasons, other than to avoid competition. We\n considered space as a reason the Authority made multiple purchases on the\n same day, but noted that the Authority purchased a total of 6 40-foot and 2\n 20-foot standard container storage units in August, and September 2010,\n to store Recovery Act project materials. In addition, it made many\n purchases of less than $5,000 that if combined, would not have taken\n additional storage space since the purchases were made on the same day or\n within one day. Further, the Authority said that it, \xe2\x80\x9c\xe2\x80\xa6made some smaller\n purchases to help track some of the costs by unit,\xe2\x80\x9d but it did not identify\n the unit on these purchase orders. Finally, the Authority stated that it\n owns and operates its own warehouse, which can accommodate more than\n $5,000 of materials safely and securely (see comment 24).\n\nComment 31 The issue is not what the requirements are for purchases of less than\n $5,000, but that the Authority broke down purchases so that they would be\n less than $5,000. At this point, the Authority would be responsible for\n following its policy as stated in comments 24 and 25.\n\nComment 32 The Authority stated that the report assumed that the purchases were\n broken down for the purpose of avoiding competition and its policy does\n not prohibit breaking down purchase orders for other reasons. However,\n the Authority\xe2\x80\x99s policy states that \xe2\x80\x9cunder no circumstances will a purchase\n be broken down into more than one action in order to meet the Micro\n Purchase threshold.\xe2\x80\x9d The policy does not allow breaking down purchase\n orders for any reason. See comments 27 and 28.\nComment 33 These purchases were under $5,000 as a result of splitting them into\n multiple single purchases or not combining them. These purchases were\n\n\n 44\n\x0c from the same vendor, on the same day, and in many cases in sequential\n order. It would have been prudent to create one purchase order and obtain\n quotes from multiple vendors to determine which would provide the best\n value.\nComment 34 The Authority stated that the difference between the $372,221 materials\n and the best value be clarified in the recommendations. We clarified in\n the exit conference that the recommended reimbursement would be the\n difference between the $372,221 paid for materials the Authority\n purchased and the documentation it is able to provide showing that it\n received the best value.\nComment 35 It is the Authority\xe2\x80\x99s responsibility to work with HUD to determine how to\n document that it received the best value for the grant funds spent. See\n comments 27, 32, and 33.\nComment 36 The final submission of the Recovery Act reporting was for the quarter\n ending September 30, 2012. There were many previous filings, beginning\n in October 2009, during which the Authority could have updated its data\n to reflect accurate information.\nComment 37 The Authority was unable to provide documentation for determining how\n it arrived at the data it reported. The chief financial officer obtained the\n data verbally from a temporary project coordinator over the phone.\n Although guidance was not clear at the beginning, clarification was made\n throughout the grant period. In addition, if there had been documentation\n for review, it is possible that at least some of the mistakes would have\n been caught.\nComment 38 The Authority commented on the questioned costs stating that .3% was\n determined to be ineligible, 87.1% unsupported, and 12.6% unreasonable\n or unnecessary. Although only a small portion of the questioned costs\n were ineligible, the unsupported costs require supporting documentation to\n be eligible. Without that documentation, the costs are ineligible and need\n to be returned to HUD for transmission to the U.S. Treasury.\n\n\n\n\n 45\n\x0cAppendix C\n\n CRITERIA\nNative American Housing Assistance and Self-Determination Act of 1996 Section 203 Program\nRequirements (b) Maintenance and Efficient Operation\nSEC. 203. (b) Maintenance and Efficient Operation \xe2\x80\x93 each recipient who owns or operates (or is\nresponsible for funding any entity that owns or operates) housing developed or operated pursuant\nto a contract between the [HUD] Secretary and an Indian housing authority pursuant to the\nUnited States Housing Act of 1937 shall, using amounts of any grants received under this Act,\nreserve and use for operating assistance under section 202(1) such amounts as may be necessary\nto provide for the continued maintenance and efficient operation of such housing.\n\nNative American Housing Assistance and Self-Determination Act of 1996 Section 205 (a)(2) Low\nIncome Requirement and Income Targeting\n(a) IN GENERAL.\xe2\x80\x94Housing shall qualify as affordable housing for purposes of this Act only\nif\xe2\x80\x94(2) except for housing assisted under section 202 of the United States Housing Act of 1937\n(as in effect before the date of the effectiveness of this Act), each dwelling unit in the housing\nwill remain affordable, according to binding commitments satisfactory to the Secretary, for the\nremaining useful life of the property (as determined by the Secretary) without regard to the term\nof the mortgage or to transfer of ownership, or for such other period that the Secretary\ndetermines is the longest feasible period of time consistent with sound economics and the\npurposes of this Act, except upon a foreclosure by a lender (or upon other transfer in lieu of\nforeclosure) if such action\xe2\x80\x94\n\n\n2 CFR 225 (OMB Circular A-87) Appendix B 26 to Part 225 (26) c. Selected Items of Costs\n(26) Materials and Supplies Costs\nc. Only materials and supplies actually used for the performance of a Federal award may be\ncharged as direct costs.\n\n24 CFR 85.20(b) Standards for Financial Management Systems\nThe financial management systems of other grantees and subgrantees must meet the following\nstandards:\n (1) Financial reporting. Accurate, current, and complete disclosure of the financial\n results of financially assisted activities must be made in accordance with the financial\n reporting requirements of the grant or subgrant.\n (2) Accounting records. Grantees and subgrantees must maintain records which\n adequately identify the source and application of funds provided for financially- assisted\n activities. These records must contain information pertaining to grant or subgrant awards\n and authorizations, obligations, unobligated balances, assets, liabilities, outlays or\n expenditures, and income.\n (3) Internal control. Effective control and accountability must be maintained for all grant\n and subgrant cash, real and personal property, and other assets. Grantees and subgrantees\n must adequately safeguard all such property and must assure that it is used solely for\n authorized purposes.\n\n\n 46\n\x0c (4) Budget control. Actual expenditures or outlays must be compared with budgeted\n amounts for each grant or subgrant. Financial information must be related to performance\n or productivity data, including the development of unit cost information whenever\n appropriate or specifically required in the grant or subgrant agreement. If unit cost data\n are required, estimates based on available documentation will be accepted whenever\n possible.\n\n24 CFR 85.36(b)(4) Procurement Standards\nGrantee and subgrantee procedures will provide for a review of proposed procurements to avoid\npurchase of unnecessary or duplicative items. Consideration should be given to consolidating or\nbreaking out procurements to obtain a more economical purchase. Where appropriate, an\nanalysis will be made of lease versus purchase alternatives, and any other appropriate analysis to\ndetermine the most economical approach.\n\n24 CFR 85.36(d)1\nIf small purchase procedures are used, price quotations shall be obtained from an adequate\nnumber of qualified sources. Small purchase procedures are those relatively simple and informal\nprocurement methods for securing services, supplies, or other property that do not cost more than\n$100,000.\n\n24 CFR 1000.26 What are the administrative requirements under NAHASDA?\n(a) Except as addressed in \xc2\xa71000.28, recipients shall comply with the requirements and standards of OMB\nCircular No. A\xe2\x80\x9387, \xe2\x80\x9cPrinciples for Determining Costs Applicable to Grants and Contracts with State,\nLocal and Federally recognized Indian Tribal Governments,\xe2\x80\x9d and with the following sections of 24 CFR\npart 85 \xe2\x80\x9cUniform Administrative Requirements for Grants and Cooperative Agreements to State and\nLocal Governments.\xe2\x80\x9d For purposes of this part, \xe2\x80\x9cgrantee\xe2\x80\x9d as defined in 24 CFR part 85 has the same\nmeaning as \xe2\x80\x9crecipient.\xe2\x80\x9d\n\n24 CFR 1000.28 May a self-governance Indian tribe be exempted from the applicability of \xc2\xa71000.26?\nYes. A self-governance Indian tribe shall certify that its administrative requirements, standards and\nsystems meet or exceed the comparable requirements of \xc2\xa71000.26. For purposes of this section, a self-\ngovernance Indian tribe is an Indian tribe that participates in tribal self-governance as authorized under\nPublic Law 93\xe2\x80\x93638, as amended (25 U.S.C. 450 et seq. ).\n\n24 CFR.1000.156 Is affordable housing developed, acquired, or assisted under the IHBG program subject\nto limitations on cost or design standards?\nYes. Affordable housing must be of moderate design. For these purposes, moderate design is defined as\nhousing that is of a size and with amenities consistent with unassisted housing offered for sale in the\nIndian tribe\'s general geographic area to buyers who are at or below the area median income. The local\ndetermination of moderate design applies to all housing assisted under an affordable housing activity,\nincluding development activities ( e.g., acquisition, new construction, reconstruction, moderate or\nsubstantial rehabilitation of affordable housing and homebuyer assistance) and model activities.\nAcquisition includes assistance to a family to buy housing. Units with the same number of bedrooms must\nbe comparable with respect to size, cost and amenities.\n\nUnited States Office of Management and Budget Memorandum M-09-21 Section 2 \xe2\x80\x93 Basic\nPrinciples and Requirements of Recovery Act Recipient Reporting\n\n\n\n 47\n\x0c2.1 What recipient reporting is required in Section 1512 of the Recovery Act? Section 1512 of\nthe Recovery Act requires reports on the use of Recovery Act funding by recipients no later than\nthe 10th day after the end of each calendar quarter (beginning the quarter ending September 30,\n2009) and for the Federal agency providing those funds to make the reports publicly available no\nlater than the 30th day after the end of that quarter. Aimed at providing transparency into the use\nof these funds, the recipient reports are required to include the following detailed information:\n \xef\x82\xb7 Total amount of funds received; and of that, the amount spent on projects and activities;\n \xef\x82\xb7 A list of those projects and activities funded by name to include:\n o Description\n o Completion status\n o Estimates on jobs created or retained;\n \xef\x82\xb7 Details on sub-awards and other payments.\n\nReport United States Office of Management and Budget Memorandum M-09-21 Section 4 \xe2\x80\x93\nData Quality Requirements\n\n4.1 What is the scope of required data quality reviews?\nData quality (i.e., accuracy, completeness and timely reporting of information) reviews required by\nthis Guidance are intended to emphasize the avoidance of two key data problems -- material\nomissions and significant reporting errors.\n\nSignificant reporting errors are defined as those instances where required data is not reported\naccurately and such erroneous reporting results in significant risk that the public will be misled or\nconfused by the recipient report in question.\n\n4.2 Who is responsible for the quality of data submitted under Section 1512 of the Recovery Act?\nData quality is an important responsibility of key stakeholders identified in the Recovery Act. Prime\nrecipients, as owners of the data submitted, have the principal responsibility for the quality of the\ninformation submitted.\n\n \xef\x82\xb7 Prime Recipient\n o Owns recipient data and sub-recipient data\n o Initiates appropriate data collection and reporting procedures to ensure that Section\n 1512 reporting requirements are met in a timely and effective manner\n o Implements internal control measures as appropriate to ensure accurate and complete\n information\n o Performs data quality reviews for material omissions and/or significant reporting\n errors, making appropriate and timely corrections to prime recipient data and working\n with the designated sub-recipient to address any data quality issues\n\n\n\nUnited States Office of Management and Budget Memorandum M-09-21 Section 5 \xe2\x80\x93 Reporting\non Jobs Creation Estimates by Recipients\n5.2 What information are recipients covered by Section 1512 required to report? Recipients will\nbe required to report an aggregate number for the cumulative jobs created or retained for the\nquarter in a separate numeric field.\n\n\n 48\n\x0cThe estimate of the number of jobs required by the Recovery Act should be expressed as \xe2\x80\x9cfull-\ntime equivalents\xe2\x80\x9d (FTE), which is calculated as total hours worked in jobs created or retained\ndivided by the number of hours in a full-time schedule, as defined by the recipient (see Section\n5.3 for more information). The FTE estimates must be reported cumulatively each calendar\nquarter.\n\nHousing and Urban Development Office of Native American Program Guidance No. 2007-07\nRecord of Use Restrictions: The Record of Use Restrictions is a form that can be used by\nrecipients to record both NAHASDA and other useful life/use restrictions. Restrictions can vary\nboth in how they are imposed and their length. Since recipients may have properties that are\nsubject to other use restrictions, this model reporting form is designed to be the registry of all of\nthe various use restrictions that are placed on recipient properties.\n\nBinding Commitments: There are a number of different ways to place both NAHASDA and\nother use restrictions on assisted properties. The four attached sample Useful Life/Use\nRestriction Agreements can be used for this purpose. Whichever form is used, it must be\nproperly recorded with the appropriate land records offices. Additional use restrictions may be\nimposed on such properties as long as they do not contradict the NAHASDA useful life\nrestrictions.\n\n2.2 Recovery of Amounts Contributed by the Tribe. The Tribe has contributed through loan(s) or grant(s)\nthe sum of __________________ ($__________) to the Owner or Property and shall be entitled to\nrecover this amount in its entirety for any violation of the Land Restriction agreement during the Term of\nthe Land Restriction.\n\n4.0 USEFUL LIFE.\n4.1 Term of Land Restriction Should Meet HUD Requirements. NAHASDA requires that the Secretary of\nthe U.S. Department of Housing and Urban Development determine that the Property is minimally\nrestricted for a period of time acceptable to its Secretary, 25 U.S.C. \xc2\xa7 4135(a)(2). In section 1.4 of this\nLand Restriction agreement, a Term has been set for this Land Restriction and that Term should not be\nless than what is acceptable to the Secretary of HUD based on the nature and the amount of IHBG funds\nto this Property. The Tribe should ensure that a Land Restriction has been obtained for a Term that meets\nHUD\xe2\x80\x99s standards.\n\nHousing and Urban Development Office of Native American Program Guidance No. 2009-07\nIn the formula program and competitive program, the provisions of Section 104(b) of the Native\nAmerican Housing Assistance and Self-Determination Act (NAHASDA), and 24 CFR\n1000.16(b) govern the use of Recovery Act IHBG/NAHBG [Native American Housing Block\nGrant] formula and competitive funds. In accordance with Section 104(b)(1) of NAHASDA,\nDavis-Bacon applies to projects assisted with IHBG/NAHBG funds.\n\nHousing and Urban Development Office of Public and Indian Housing Notice 2009-14\nThis Notice allows the Authority to adopt and implement the Micro Purchase Procurement\nclause in its procurement policy for purchases of goods and services with a value of less than\n$5,000. The intent of Micro Purchasing is to reduce the burden of complying with the federal\nprocurement process for goods and services of minimal cost. It also prohibits the Authority\n\n\n 49\n\x0cbreaking down requirements of a purchase for the purpose of bid splitting to avoid the\nrequirements that apply to larger purchases.\n\nHousing and Urban Development Office of Native American Program Guidance No. 2010-47\nThe tribe/TDHE is responsible for ensuring that the amount of funds from all sources used to\nconstruct each unit does not exceed the TDC limits. The tribe/TDHE must maintain records\nshowing that housing was developed in accordance with these limits and other applicable\nNAHASDA requirements. Units that improperly exceed TDC limits without appropriate HUD\napproval will not be deemed to be \xe2\x80\x9caffordable housing\xe2\x80\x9d and all IHBG funds expended on such\nunits will be disallowed.\n\nYakama Nation Housing Authority Financial Administration Policy\nAccounting Records: The Authority must maintain records that adequately identify the source\nand application of funds provided under IHBG [Indian Housing Block Grant].\n\nYakama Nation Housing Authority Financial Administration Policy\nInventory of Materials \xe2\x80\x93 the Authority shall only procure materials for a specific job or\npurpose.\xe2\x80\xa6any extra materials shall be 1. returned to the supplier for credit, 2. sold as surplus 3.\ninventoried at a central location, keeping the material safe and secure, provided that the material\ncan be used on other federally funded projects in the near future (the value of this material shall\nnot exceed $5,000), or 4. scrap the material.\n\nYakama Nation Housing Authority Property Accountability Policy\nPart V, Section A.1(e), Issuing materials \xe2\x80\x93 charging the cost of materials and supplies to the\nappropriate project for which the materials and supplies are being used is a primary goal of the\ninventory system. An issue slip will be filled and transmitted to the Accountant. The\nAccountant will charge the cost of issuance to the appropriate programs and prepare the\nnecessary journal entries to record the transaction.\n\nYakama Nation Housing Authority Procurement and Contract Administration Procedures\nPart III, Section C, The Receiver\xe2\x80\x99s Report \xe2\x80\x93 upon receipt of the goods, the receiver shall prepare\nthe Receiver\'s Report. The report should be signed and dated. Upon preparation, the receiver\nshould forward the original receiver\xe2\x80\x99s report and the signed copy of the vendor\xe2\x80\x99s delivery receipt\n(if available) to the accounting office.\n\nYakama Nation Housing Authority Procurement and Contract Administration Procedures\nPart V, Section F, Procurement of Less than $5,000 states that for small purchases of less than\n$5,000, (except for contracts of $2,000 or more involving labor), only one price quote is\nrequired, provided the quote is considered reasonable. Quotes may be obtained orally (either in\nperson or by telephone), by catalog, fax, or email. If the purchase is made for reasons other than\nprice, the file must clearly describe the reason for the purchase. Under no circumstances will a\npurchase be broken down into more than one action in order to meet the Micro Purchase\nthreshold. The Micro Purchase must be documented by an authorized purchase order or contract.\n\nYakama Nation Housing Authority Procurement and Contract Administration Procedures\n\n\n\n 50\n\x0cPart IV, Section D.1. Definition of Single Purchases \xe2\x80\x93 single purchases for the purpose of this\npolicy and procedure shall be considered to mean the total cost of one or more similar items to be\nobtained at any one time from a single source and listed on a single purchase order.\n\n\n\n\n 51\n\x0cAppendix D\n\n MULTIPLE PURCHASES FROM VENDORS\n\n\n Vendor A\n approval Purchase\n date order Amount Items\n P10-7376 $ 1,196.62 Trim molding\n P10-7377 3,955.30 Sheetrock & plywood\n 7/26/10\n P10-7378 1,826.89 Drywall materials\n Total (3) $ 6,978.81\n P10-7502 $ 4,528.49 Plumbing materials\n 8/23/10 P10-7505 4,522.04 Painting materials\n Total (2) $ 9,050.53\n P10-7619 $ 489.90 Door locks\n P10-7620 197.91 Drop cloths\n 9/14/10 4,577.90 Plumbing materials\n P10-7621\n Total (3) $ 5,265.71\n P11-7914 $ 3,175.36 Paint\n P11-7915 313.80 Sheetrock\n 11/22/10\n P11-7919 1,611.63 Security fencing\n Total (3) $ 5,100.79\n P11-8149 $ 4,377.85 Stock materials\n P11-8153 3,284.73 Stock materials\n 02/01/11\n P11-8154 3,162.13 Stock materials\n Total (3) $ 10,824.71\n P11-8190 $ 4,998.75 Stock materials\n 02/11/11 P11-8198 1,782.00 Stock materials\n Total (2) $ 6,780.75\n P11-8289 $ 2,692.80 Insulation\n P11-8290 4,259.84 Paint sealer\n 03/16/11\n P11-8291 4,912.28 Paint & doors\n Total (3) $ 11,864.92\n P11-8376 $ 3,622.21 Steps project materials\n P11-8380 4,328.40 Doors & misc.\n P11-8390 2,257.95 Stock materials\n P11-8400 1,923.77 Stock materials\n 04/12/11 P11-8401 3,344.33 Stock materials\n P11-8402 3,445.33 Stock materials\n P11-8408 4,347.27 Stock materials for windows\n P11-8410 730.00 Stock materials and windows\n Total (8) $ 23,999.26\n\n\n\n 52\n\x0cVendor A\napproval Purchase\n date order Amount Items\n P11-8442 $ 2,376.52 Windows, vents, doors & shelves\n P11-8445 2,623.32 Nails & screws\n04/25/11\n P11-8446 2,638.62 Nails & screws\n Total (3) $ 7,638.46\n P11-8454 $ 4,986.25 Doors\n P11-8458 1,081.20 Panels\n04/28/11\n P11-8460 4,904.30 Windows\n Total (3) $ 10,971.75\n P11-8472 $ 2,129.38 Stock materials\n P11-8473 2,373.30 Stock materials & sheet rock\n P11-8474 2,165.48 Caulk, toilet supplies & plywood\n05/02/11 P11-8475 4,553.95 Stock materials, plywood\n P11-8476 4,073.89 Stock materials, caulk & tile\n P11-8477 3,213.48 Stock materials & insulation\n Total (6) $ 18,509.46\n P11-8505 $ 2,682.57 Stock materials, toilets, closets\n05/06/11 P11-8506 3,738.13 Stock materials, elbows & sinks\n Total (2) $ 6,420.70\n P11-8565 $ 4,980.00 Stock materials & windows\n P11-8566 4,283.05 Stock materials & laminate\n05/24/11 P11-8567 2,796.03 Stock materials, windows & trims\n P11-8568 3,253.00 Stock materials & windows\n Total (4) $ 15,312.08\n P11-8595 $ 4,707.94 Materials\n P11-8601 2,629.80 Plywood\n P11-8603 439.05 Hammer tacker staples\n06/06/11 P11-8604 2,961.28 Materials\n P11-8605 1,651.45 Materials for formula projects\n Total (5) $ 12,389.52\n P11-8659 $ 4,860.69 Materials for formula projects\n06/29/11 P11-8662 4,090.16\n Total (2) $ 8,950.85\n P11-8691 $ 3,867.83 Windows, sheetrock & paint\n P11-8692 4,708.68 Plywood & trim\n P11-8694 877.23 Materials for formula projects\n07/06/11\n P11-8696 2,695.06 Materials for formula projects\n Total (4) $ 12,148.80\n\n P11-8795 $ 4,792.91 Stock materials for formula\n P11-8796 4,756.51 projects\n07/29/11 Total (2) $ 9,549.42\n\n\n\n 53\n\x0cVendor A\napproval Purchase\n date order Amount Items\n P11-8843 $ 4,782.14 Plumbing materials\n P11-8844 4,735.20 Insulation\n08/09/11\n P11-8845 2,333.99 Stock materials\n Total (3) $ 11,851.33\n P11-8908 $ 4,914.00 Foundation materials\n P11-8909 4,953.00 Foundation materials\n08/19/11 P11-8910 3,561.89 Foundation materials\n P11-8911 4,470.12 Foundation materials\n Total (4) $ 17,899.01\n P11-8956 $ 3,860.66 Stock materials, plumbing &\n P11-8957 1,796.10 bathroom fixtures\n09/07/11\n P11-8958 2,439.04\n Total (3) $ 8,095.80\n P11-8991 $ 4,797.25 Restock materials & insulation\n P11-8992 395.18 Restock materials & insulation\n09/01/11 P11-8993 1,286.04 Restock materials & insulation\n P11-8994 4,375.00 Restock materials & insulation\n Total (4) $ 10,853.47\n P11-9005 $ 276.83 Materials\n P11-9007 2,128.26 Restock\n09/20/11\n P11-9011 4,803.99 Vinyl windows\n Total (3) $ 7,209.08\n05/18/12 P12-9776 $ 4,080.87 Materials\n P11-9777 4,143.65\n Total (2) $ 8,224.52\n P12-9826 $ 3,229.25 Materials\n P12-9827 4,060.50\n P12-9828 3,488.43\n06/04/12 P12-9829 872.25\n P12-9830 4,867.95\n P12-9831 2,301.98\n Total (6) $ 18,820.36\n P12-9843 $ 4,366.43 Materials & restock materials\n P12-9844 2,193.31\n P12-9845 4,414.47\n06/05/12 P12-9847 1,893.77\n06/06/12 P12-9849 2,718.87\n P12-9850 1,770.76\n Total (6) $ 17,357.61\n P12-9928 $ 4,452.90 Plumbing materials\n07/05/12 P12-9929 3,573.16\n Total (2) $ 8,026.06\n\n\n\n 54\n\x0cVendor A\napproval Purchase\n date order Amount Items\n P12-9965 $ 4,900.74 Materials\n P12-9966 3,698.35\n07/20/12\n P12-9967 4,122.99\n Total (3) $ 12,722.08\n Total (94) $302,815.84\n\n\nVendor B\napproval Purchase\n date order Amount Items\n02/11/11 P11-8184 $ 4,097.91 Steel & electrical\n02/10/11 P11-8185 2,597.40 Electrical\n Total (2) $ 6,695.31\n P12-9902 $ 657.85 Electrical materials\n P12-9903 2,608.48\n06/26/12\n P12-9904 4,703.28\n Total (3) $ 7,969.61\n Total (5) $ 14,664.92\n\n\nVendor C\napproval Purchase\n date order Amount Items\n P11-8919 $ 4,990.00 Cabinets & granite counter tops\n P11-8920 4,990.00\n P11-8921 4,924.00\n P11-8922 4,818.00\n08/26/11 P11-8923 4,568.00\n P11-8924 4,924.00\n P11-8926 4,924.00\n P11-8927 4,818.00\n Total (9) $ 38,956.00\n\n\nVendor D\napproval Purchase\n date order Amount Items\n P11-8949 $ 2,992.17 Stock materials, plumbing &\n09/02/11 P11-8950 3,227.42 bathroom fixtures\n Total (2) $ 6,219.59\n\n\n\n\n 55\n\x0cVendor E\napproval Purchase\n date order Amount Items\n P11-9013 $ 4,620.50 Stock materials\n09/20/11 P11-9014 4,944.50 Stock materials\n Total (2) $ 9,564.50\n\n\n\n\n 56\n\x0c'