Quote:
http://www.hudoig.gov/Audit_Reports/2012-CH-1009.pdf page 5
The Authority’s small purchase threshold was $75,000 for the purchase of goods and construction contracts. It used small purchase contracts to procure services using funds from its Recovery Act competitive transformation grant. For both of the work items we reviewed,
the Authority failed to ensure that required documentation was obtained and maintained in accordance with HUD’s requirements and its own policies and procedures. The two items reviewed totaling more than $39,000 were for (1) phase I environmental site assessment with liability insurance clause and (2) asbestos air clearance testing. Documentation was not maintained to support
ï‚· Quotes were solicited for both of the work items, and
ï‚· Independent cost estimates were completed for one work item.
For the procurement of the environmental assessment, the Authority’s modernization director stated, review of available time and cost constraints led to a determination that it would be advantageous to negotiate a contract with the company,
Amereco to prepare a new phase I report with the required insurance clauses as opposed to reprocuring.
The environmental site assessment was completed three times in total by two companies and was paid for accordingly. Also, the need for a company conducting the review to have specific insurance clauses and the time period of having the report completed constituted as a new scope, for which the small purchases requirements should have been followed.
Further, HUD’s regulations require solicitation of quotes from at least three companies even by telephone. However, there was no documentation to support quotes were solicited for the environmental site assessment. Recovery Act funds totaling $12,300 were paid for the environmental site assessment.
For the removal of asbestos, the Authority contracted with a company that it had used previously instead of following its procurement policies and Federal requirements. Recovery Act transformation grant funds totaling $26,875 were paid for the inappropriately procured service. Now isn't AMERICO the same company that got a large chunk of $550,000 which was placed in question by the SBA?
Per the SBA, and I am summarizing their comments, Apparently Mr. Phil Tallon opened an account, someone placed nearly $600,000 into the account on behalf of the ReDevelopment Commission. Checks, in the amount of $550,000 (approximately) were cut from the account
with out Redevelopment Commission Approval. Nearly $600,000 spent with out a legal authorization by the RDC!
Now shouldn't someone be fired for that?
This lack of leadership by Mr. Finance, Mayor Thomas McDermott himself placed in jeopardy a senior citizens housing project, a $10,000,000 project!