Baltimore dismisses HUD housing audit

November 30, 1994|By Marcia Myers | Marcia Myers,Sun Staff Writer

Baltimore's $25.6 million effort to rehab houses for the poor -- a program federal officials say had gone sadly awry -- actually was perfectly well run, city officials said yesterday.

In a strong defense of a housing initiative begun with great fanfare as a boon to the city's most unkempt neighborhoods, city officials told the U.S. Department of Housing and Urban Development that its investigation of the program's waste and mismanagement was seriously flawed.

As part of its response, the city's Housing Authority dismissed an auditors' recommendation that it repay hundreds of thousands of dollars in federal funds that were allegedly misspent and to stop awarding contracts without competitive bids, like those in the rehab program.

In September, auditors for the Office of the Inspector General (OIG) -- an investigative arm of the Department of Housing and Urban Development -- reported that the tab for repairing apartments and houses was running at twice the going rate; contractors were paid for work that was never done, and millions went to firms run by relatives of authority managers.

The program is under investigation by the FBI and already had led to the conviction of a program manager who accepted bribes from contractors.

Even the nation's top housing official, Henry G. Cisneros, labeled the Baltimore agency's practices as intolerable.

But in the city's 17-page reply obtained yesterday by The Sun, Baltimore Housing Commissioner Daniel P. Henson III disputed virtually every finding by the inspector general.

"We think their methodology was flawed," Mr. Henson said in an interview. "They looked at work months after it was done; they made assumptions about work that was done without referring to work orders; finally, they used a method for determining costs that wasn't correct."

Repair costs for some units topped $90,000 -- the average price of a home in Baltimore is about half that. Asked yesterday whether such costs were excessive, Mr. Henson said, "Compared to what? I think we'd have to take a look at the scope of the work done to it. You cannot generalize, which is what I think HUD tried to do here."

Officials with HUD and with the inspector general declined to comment yesterday.

Among the OIG findings, recommendations and Mr. Henson's responses:

* Auditors urged the agency to discontinue awarding of no-bid contracts.

Mr. Henson said the agency would not halt such contracts, but would seek HUD approval for them in emergency circumstances.

* Costs were overpriced by 46 percent on the 65 units inspected by auditors, leading to a recommendation that the authority repay $725,759 to HUD for overcharges and work not done.

Mr. Henson said the auditors' findings were based on incomplete and inaccurate information and on inexperience by inspectors, and he said the Housing Authority has no plan to repay the money.

"I don't think we owe them diddly," Mr. Henson said.

He said that by mid-February the authority will inspect approximately 60 units repaired through the program. If 10 percent of those fail inspection, all the no-bid repair work will be reinspected by the end of 1995.

* Residents should be better protected from lead poisoning, auditors concluded.

OIG's recommendation to transfer residents with small children to lead-free apartments is not feasible because only a limited number of those units exist, Mr. Henson replied. He said the agency will offer a revised housing application in early 1995 that seeks information on the blood lead levels of children of public housing applicants.

* The agency should improve maintenance operations to make sure that the staff meets minimum qualifications and that inspections meet HUD standards.

Mr. Henson said such changes would not be prudent until an analysis of maintenance operations is complete. He plans to spend $100,000 for a consultant who will analyze the operations and present a report by next summer.

* Some residents received preferential placement on the public housing waiting list.

Auditors were unfamiliar with the complexity of the agency's policy in moving residents from the waiting list into apartments, Mr. Henson said. The authority is establishing a separate waiting list for apartments in the city's 18 high-rise towers.

* More than $4.1 million was spent for security services and systems without the assurance that the best price and most qualified firm were selected.

The authority is revising the way it selects security firms.

* In order to better monitor its inventory of building equipment and supplies, auditors said, the agency must improve accounting procedures. Auditors also objected to the purchase of vehicles for top administrators.

Mr. Henson said the authority will establish new inventory guidelines in the spring.

A number of suggested remedies for alleged problems in the no-bid program and elsewhere in the agency were met with the reply: "No corrective action is necessary."

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