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City of Deerfield BeachInternal Control Review

of theCommunity Development

Division

Prepared For

Mr. Burgess Hanson, City ManagerCity of Deerfield Beach

150 NE 2nd AvenueDeerfield Beach, FL 33441

April 19, 2010

1TABLE OF CONTENTS

BACKGROUND ........................................................................................................................................ 3

INTRODUCTION ...................................................................................................................................... 4

INTERNAL CONTROLS REVIEW SCOPE, OBJECTIVES AND METHODOLOGY ........................................... 7

DOCUMENTS REVIEWED......................................................................................................................... 8

PROGRAMS REVIEWED ......................................................................................................................... 13

GENERAL FINDINGS .............................................................................................................................. 22

REVIEW/ANALYSIS OF CASES ................................................................................................................ 29

Michael and Pamela Weiss ............................................................................................................... 29

Martha Rose Lawson ........................................................................................................................ 33

Dawn Burke Rolle ............................................................................................................................. 37

Rolex and Anne Jean-Baptiste .......................................................................................................... 40

Stephanie Thomas ............................................................................................................................ 47

Viola Smith ....................................................................................................................................... 51

Albert & Lorna Gordon ..................................................................................................................... 59

Nicole Ingram ................................................................................................................................... 62

Nahin & Krystal Martinez.................................................................................................................. 64

Shanell Miller.................................................................................................................................... 67

Linnie Pinkney and Cynthia Thomas ................................................................................................. 70

Barry and Natasha Baker .................................................................................................................. 76

Andy Douglas & Kenneth Sherriff ..................................................................................................... 78

Melvin V. Walker .............................................................................................................................. 82

Ed Walker ......................................................................................................................................... 87

Angela Storr...................................................................................................................................... 90

2Clay Lee Stanley ................................................................................................................................ 92

Henry H. Hall, II and Nora B. Hall ...................................................................................................... 94

Carolyn Moore.................................................................................................................................. 97

Anthony and Margaret Davis ............................................................................................................ 99

Wayne A. Adams ............................................................................................................................ 108

Darrel Adams .................................................................................................................................. 109

REVIEW/ANALYSIS OF GRANTS........................................................................................................... 111

Church of Brotherly Love Kings Table Corp. ................................................................................... 111

Choices Network Systems, Inc. ....................................................................................................... 118

Centro Cristiano 1 Juan 4:8 ............................................................................................................. 120

Emmanuel Human Services, Inc. f/k/a ............................................................................................ 123

Haitian American Consortium, Inc. ................................................................................................. 127

Elelift, LLC ....................................................................................................................................... 137

Westside Deerfield Businessmen Association, Inc. ......................................................................... 142

Housing and Assistive Technology, Inc............................................................................................ 161

NE Focal Point Casa, Inc. ................................................................................................................. 166

Steppingstone Key Initiave & Social Development Services, Inc. .................................................... 167

Senior Volunteer Services, Inc. ....................................................................................................... 168

INDEX ................................................................................................................................................. 169

3BACKGROUND

Kessler International (Kessler) was retained by the City of Deerfield Beach (City) to conduct

an internal controls review of the programs and activities of the Community Development

Division (CDD) to determine weaknesses and non adherence to policies as well as to

document other items that might be considered fraudulent in nature.

The City, through the CDD administers grants and loans made to individuals and non-profit

corporations from Federal, State and City funds. Among the programs administered by the CDD

are programs to provide rehabilitation repairs to low income individuals, provide first time

homebuyers assistance and provide barrier removal for the elderly, handicapped and disabled

residents of Deerfield Beach.

Kesslers objective was to conduct a review of a sampling of case files to verify that the process

of application and awarding of grants and loans to the applicants were in compliance with

guidelines.

4INTRODUCTION

Kesslers limited internal controls review of the CDD has disclosed significant internal control

breaches as well as suspected fraud regarding the oversight responsibility by certain city staff

and sub-recipients entrusted to administer City, County, State and Federal funding.

This failure and disregard of regulations and requirements as set forth in contracts and policies

governing the Department of Planning & Growth Managements CDD has resulted in findings

that are at the very least worrisome and others indicative of illegal activity. These findings are

detailed in this report.

The Kessler internal controls review also disclosed favoritism towards certain recipients and

other individuals including relatives of City staff, which in some cases the actions of those

involved appear to be fraudulent. The entire process of awarding funds to deserving individuals

should have been administered in a documented, precise, calculated and unbiased manner but

what was revealed during this audit was that this was clearly not the case.

In fact this review only touched upon certain aspects of an extremely limited number of

programs involved in the awarding and distribution of funding by the City. It is strongly

suggested that other areas be audited and that in the future an internal control review, similar to

Kesslers be contemplated on a yearly basis.

Kesslers audit also disclosed concerns about the methodology and selection of contractors, the

altering of work specifications prepared by paid contractors to the City and the ultimate awarding

of bids and the issuance of change orders by CDD and proxies handled outside the purview of

the Citys purchasing department. Kesslers review also revealed a complete lack of adequate

documentation for many of the non-profit sub-recipients.

5Kessler also found that CDDs supervising personnel either did not have adequate understanding

of red flags of fraud or simply turned a blind eye and approved expenditures that were

fraudulent. It was simply astounding to read the blog published by investigative journalist and

community activist Chaz Stevens, where he was able to secure information through the Sunshine

Law and was able to ferret out and identify fraud, when others closely connected with the day to

day process failed to see the devil in the details.

Based upon the findings obtained during this audit and reported in The Kessler Report it is

recommended that the City contemplate additional forensic audits of areas involving

disbursements of sizeable funds from the Citys general fund. Of significant concern based upon

information developed during the current audit would be grants issued to the various street

festivals, one of which was managed by a former Parks and Recreation Department employee.

Furthermore, during the course of this audit, Kessler identified an entity known as Deerfield

Beach Affordable Housing Corporation, a non-profit corporation sharing space with four of the

entities that were reviewed by Kessler during this engagement. Kessler could not locate any IRS

990s tax returns filed by this entity.

It is also suggested that the City consider implementing a stronger Anti-Fraud and Code of

Ethics Policy and that a program be established to teach personnel the red flags of fraud and an

ethics training program be required for City workers. Finally a fraud and mismanagement

reporting system should be established similar to Kesslers Fraudbusters Tip reporting service

so that employees can anonymously report instances of fraud and mismanagement.

Kessler recommends that this Kessler Report be referred to United States Attorney, Florida

Attorney General, U.S. Department of Housing and Urban Development Inspector General and

IRS Criminal Investigation Division so that the findings in this report can be further investigated

and if criminal acts are proven, the individuals responsible can be brought to justice.

The illustrations disclosed in The Kessler Report have highlighted the actions of a few City

employees. These employees actions taint other City staff, many of which are dedicated hard

6working employees. These few have served to damage the publics confidence and trust in the

City.

The statements made in The Kessler Report that managerial practices need improvement, as well

as other conclusions and recommendations represent the opinions of Kessler International.

Determinations of corrective action to be taken must be made by appropriate City Officials.

7INTERNAL CONTROLS REVIEW SCOPE, OBJECTIVES AND

METHODOLOGY

Kesslers internal controls review included a review of the State and Federal guidelines

applicable to the distribution of grant and loan funds as administered by the CDD. The review

also encompassed a sampling of case files as well as areas of concern as identified by employees

of the City. Also examined were an extensive number of other files and documents.

Kessler conducted interviews and had discussions with employees of the CDD, the Purchasing

Department, key individuals who were spokespeople for the sub-recipients of certain grants, the

Acting City Manager, the City Attorney and employees within other City agencies. Kessler also

contacted and spoke with vendors, contractors, state and federal agencies as well as citizens who

wished to provide information about wrongdoing in the City.

The case files reviewed included cases from the following programs:

Community Block Development Grant (CBDG) Program

Disaster Recover Initiative (DRI) Program

HOME Program

State Housing Initiatives Partnership (SHIP) Program

Westside Deerfield Businessmen Association, Inc. (WDBA) appointed as the

Community Housing Development Organization (CHDO) for the City of Deerfield

Beach

Additionally, Kessler requested and reviewed financial documents and other information

provided upon Kesslers request of certain non-profit entities that were the recipients of the

grants.

8DOCUMENTS REVIEWED

Local Housing Assistance Plan Fiscal Year 2004/05, 2005/06, 2006/07

Local Housing Assistance Plan Fiscal Year 2007/08, 2008/09, 2009/10

Consolidated Plan for the Community Development Block (CDBG) Grant Fiscal Years

2005 2009

Standard Operating Procedures for City of Deerfield Beach Community Development

Division

City of Deerfield Beach Procurement Ordinance Section 38-126 + 38-127

Community Development Division Minor Home Repair Program Post-Application

Approval Process

City of Deerfield Beach Policies Governing Department of Planning & Growth

Management Community Development Division (Housing Rehabilitation, Housing

Replacement and Purchase Assistance)

SHIP & CDBG First Time Homebuyer Purchase Assistance Application

Housing Repair Program Application

Lien Subordination Policy

Regular City Commission Meetings

Advertisements placed by the Community Development Division

General Ledger Accounts from City for FY 2005 through 2009

City of Deerfield Beach Employment Process

Community Development Division personnel Employees Notice of Outside

Employment

Resolutions for FY 2005 through 2009

Rehabilitation Waiting List

First Time Homebuyers Waiting List

Public Notices

2009 First Time Homebuyer Mailing List

9 Emmanuel Human Services, Inc. f/k/a Gold Coast Impact Community Development, Inc.

o IRS form 990 for Gold Coast Impact Community Development, Inc. (2005 2007)

o IRS form 990 for Emmanuel Human Services, Inc. (2008 2007) o Taxpayer ID number / not for profit status / State of Incorporation o IRS form 1099s (received 2006 2008)o 2005 to present General Ledger / Check Register o Copies of all invoices

NE Focal Point Casa, Inc.

o Taxpayer ID number / not for profit status / State of Incorporation o Copies of invoices o Copies of contracts o Copies of correspondence with The Community Development Division

Westside Deerfield Businessmen Association, Inc.

o IRS form W-2 for Dan E. Poitier (2006 2008)o IRS form 990 for years 2005 through 2008o IRS form 941 for 2007 through 2009

Consolidated Annual Performance Evaluation Report (Fiscal Year 2005, 2006, 2007 and

2008) submitted by Community Development Division

Annual Action Plan for Community Development Block (CDBG) Grant Program (Fiscal

Year 2006, 2007 and 2008) prepared by Planning and Growth Management Department,

Grant Administration Division

List of City of Deerfield Beach City Employees

New Hire Report (January 1, 2001 through March 9, 2010)

Termination Report (January 1, 2001 through March 9, 2010)

List of City Employees who received awards

Clients assisted in Fiscal Year 2005

Color Samples

Copeland Anti-Kickback Act

Application submitted by Count & Countess deHoernle Alzheimers Pavilion (Music

Therapy Grant)

10

Davis Bacon Act

Funds Approval Notice Letter

U.S. Department of Housing and Urban Development Minimum Quality Standards

Code of Federal Regulations 24 CFR 92.212 Pre-award Costs

List of Pre-Qualified Contractors

Bid #2003-04/09 (Contractor maximum current award contracts is 4)

Bid #2007-08/15 (Contractor maximum current award contracts is 3)

Sylvia Poitiers Form 8B, Memorandum of Voting Conflict for County, Municipal, and

other Local Public Officers

Various Case Files for First Time Homebuyers and Minor Home Repair

Various Case Files for Grant Recipients

William LaMarr Ruffin Contract dated January 13, 2009

Resolution Number 2007/003 approval of $54,130 for Housing and Assistive

Technology, Inc. for Architectural Barrier Removal (Marilyn Webster, Donata Santorelli

and Anthony Davis)

Items that were requested by Kessler but were not produced:

List of all recipients, including name, address, amount of assistance, type of assistance

and which fund the assistance derived from

Choices Network System, Inc.

o Taxpayer ID number / not for profit status / State of Incorporation o IRS form 1099s o IRS form W-2s o IRS form 941s o IRS form 990s o 2005 to present checking account statements and cancelled checkso 2005 to present General Ledger / Check Register o QuickBooks Files o Copies of invoices o Copies of contracts o Copies of petty cash receipts

11

o Copies of correspondence with The Community Development Division Church of Brotherly Love Kings Table Corporation

o Taxpayer ID number / not for profit status / State of Incorporation o IRS form 1099s o IRS form W-2s o IRS form 941s o IRS form 990s o 2005 to present all checking account statements and cancelled checkso 2005 to present General Ledger / Check Register o QuickBooks Files o Copies of invoices o Copies of contracts o Copies of petty cash receipts o Copies of correspondence with The Community Development Divisiono Copies of accounting reports and insurance policies

Emmanuel Human Services, Inc. f/k/a Gold Coast Impact Community Development, Inc.

o IRS form 1099s (missing 2005 and 2009)o IRS form W-2s o IRS form 941s o 2005 to present all checking account statements and cancelled checkso QuickBooks Files o Copies of contracts o Copies of petty cash receipts o Copies of correspondence with The Community Development Divisiono Copies of accounting reports and insurance policies

Haitian American Consortium, Inc.

o IRS form 1099s (2009 received)o IRS form W-2s o IRS form 941s o IRS form 990s (2009 received)o 2005 to present General Ledger / Check Register

12

o QuickBooks Files o Copies of petty cash receipts o Copies of correspondence with The Community Development Division

NE Focal Point Casa, Inc.

o IRS form 1099s (missing 2005 through 2008)o IRS form W-2s o IRS form 941s o IRS form 990s (missing 2009)o 2005 to present all checking account statements and cancelled checks (missing

January 1, 2005 through July 31, 2005)

o 2005 to present General Ledger / Check Register o QuickBooks Files o Copies of all petty cash receipts o Copies of accounting reports and insurance policies

Westside Deerfield Businessmen Association, Inc.

o Any and all accounting reports and insurance policies o IRS form 1099so IRS form W-2s (missing 2005 and 2009)o IRS form 941s (missing 2005 and 2006)o IRS form 990s (missing 2009)o 2005 to present all checking account statements and cancelled checks (missing

XXXX6080 January 1, 2005 through April 31, 2005)

o 2005 to present General Ledger / Check Register (received 2005 through 2008 General Ledger)

o QuickBooks Files o Copies of contracts o Copies of petty cash receipts o Copies of correspondence with The Community Development Divisiono Copies of accounting reports and insurance policies

13

PROGRAMS REVIEWED

The City of Deerfield Beach website describes the purpose of the CDD as follows:

The Community Development Division is responsible for all phases of the grants

process, including the preparation of state and federal grants, administering grant

programs, and providing information to City officials and the citizens of Deerfield Beach.

The Community Development Division staff acts as project manager to implement and

monitor the projects and organizations receiving grant funds from the City. We hold

forums with our business partners, present workshops on home-buying and finances, send

students to vocational school, and assist public service organizations in helping our

youth.

Organized under Planning and Growth Management, the office acts as the Citys

Community Development arm. It is designed to collaborate with the Planning

Department on neighborhood issues and capital infrastructure improvement projects

receiving grant funds.

Kesslers internal controls review encompassed a comprehensive review of the programs

administered by the CDD including:

State Housing Initiatives Partnerships (SHIP) Program

Kessler compared the requirements of the SHIP Program as stated by the City in the Local

Housing Assistance Plan (LHAP) with the requirements of the State of Florida for the SHIP

Program and have found many discrepancies in our cursory review of these documents. The

City does not provide in the application, A statement that it is a first degree misdemeanor to

falsify information for the purpose of obtaining assistance.

Additionally the SHIP Program requires that an applicant submit a Federal Income Tax Return to

verify the number of legal dependants, income from interest, dividends and partnerships. Kessler

has found that only a few cases contain copies of the Federal Tax Returns. This is a serious

14

weakness of the program and allows the applicant to easily modify their income to receive

assistance.

The SHIP Local Housing Assistance (SHIP) Plan for fiscal years 2004/05, 2005/06 and 2006/07

states the description of the program as (Exhibit 1):

The City of Deerfield Beach is responsible for administering the Local Housing

Assistance Program and ensuring complete compliance with all applicable ordinances,

rules and regulations. The City will qualify clients and deliver program services.

Program services will include, but not limited to, conducting client intake and

assessment, as well as implementation of SHIP strategies. The City has identified

through its various public meetings and with further input from individual residents the

need for the following types of programs: Emergency Home Repair, Minor Home Repair,

Purchase Assistance Program, and Affordable Housing Unit Development.

A. Emergency Home Repair

a) Summary of Strategy: SHIP funds will be used to provide emergency repair

assistance for very-low income owner-occupied homes to address emergency

situations targeting health and safety concerns.

b) Fiscal Years Covered 2004/05, 2005/06, 2006/07

Income Categories to be served: This strategy will assist applicants below 80% on

the area median income.

c) Maximum award is noted on the Housing Delivery Goals Charts: $7,500.

B. Minor Home Repair

a) Summary of Strategy: SHIP funds will be used to provide minor home repair for

very low, low and moderate-income owner-occupied homes to address, but not

limited to, roofing, electrical, plumbing, sanitary disposal, cabinets, refrigerator,

stove, smoke detectors/alarms, GFCI outlets, or structural code deficiencies.

b) Fiscal Year Covered 2004/05, 2005/06, 2006/07

15

c) Income Categories to be served: This strategy will assist applicants below 120%

of the area median income.

d) Maximum award is noted on the Housing Delivery Goals Charts: $15,000.

C. First Time Homebuyer

a) Summary of Strategy: This strategy will provide down payment and closing cost

assistance to very low, low and moderate-income households in order to purchase

a new or existing single-family home, condominium, townhouse or villa which

will serve as their primary residence.

b) Fiscal Year Covered 2004/05, 2005/06, 2006/07

c) Income Categories to be served: This strategy will assist very low, low and

moderate applicants.

d) Maximum award is noted on the Housing Delivery Goals Charts: $25,000.

D. Affordable Housing Development

a) Summary of Strategy: This strategy provides eligible sponsors/developers with

partial funding to be applied towards the construction, site preparation, and or

acquisition of land to reduce the purchase cost of affordable singe family units for

owner-occupied dwellings to eligible applicants, to include condominiums, villas

or detached housing.

b) Fiscal Year Covered 2004/05, 2005/06, 2006/07

c) Income Categories to be served: This strategy will assist applicants below 120%

of the area median income.

d) Maximum award is noted on the Housing Delivery Goals Charts: N/A

The Local Housing Assistance Plan (LHAP)s for fiscal years 2007/08, 2008/09, 2009/10

delineates its purpose as the, Creation of the Plan is for the purpose of meeting the housing

needs of the very low, low and moderate income households, to expand production of and

preserve affordable housing, to further the housing element of the local government

comprehensive plan specific to affordable housing.

16

The program strategies as provided by the City are as follows (Exhibit 2):

A. Emergency Roof Repair

a. Summary of Strategy:

SHIP funds will be used to provided emergency roof repairs assistance for very-

low income owner-occupied homes to address emergency situations targeting

health and safety concerns.

b. Fiscal Years Covered 2007/08, 2008/09, 2009/10

c. Income Categories to be served:

This strategy will assist applicants below 80% on the area median income.

d. Maximum award is noted on the Housing Delivery Goals Charts: $10,000.

B. Home Rehabilitation

a. Summary of Strategy:

SHIP funds will be used to provide home rehabilitation for very low, low and

moderate-income owner-occupied homes to address, but not limited to, roofing,

electrical, plumbing, sanitary disposal, cabinets, refrigerator, stove, smoke

detectors/alarms, GFCI outlets, or structural code deficiencies.

b. Fiscal Year Covered 2007/08, 2008/09, 2009/10

c. Income Categories to be served:

This strategy will assist applicants below 120% of the area median income.

d. Maximum award is noted on the Housing Delivery Goals Charts: $50,000.

C. First Time Homebuyer

a. Summary of Strategy:

This strategy will provide down payment and closing cost assistance to very low,

low and moderate-income households in order to purchase a new or existing

single-family home, condominium, townhouse or villa which will serve as their

primary residence.

b. Fiscal Year Covered 2007/08, 2008/09, 2009/10

c. Income Categories to be served:

This strategy will assist applicants below 120% of the area median income.

17

d. Maximum award is noted on the Housing Delivery Goals Charts: $50,000.

D. Affordable Housing Development

a. Summary of Strategy:

This strategy provides eligible sponsors/developers with partial funding to be

applied towards the construction, site preparation, and or acquisition of land to

reduce the purchase cost of affordable singe family units for owner-occupied

dwellings to eligible applicants, to include condominiums, villas or detached

housing.

b. Fiscal Year Covered 2007/08, 2008/09, 2009/10

c. Income Categories to be served:

This strategy will assist applicants below 120% of the area median income.

d. Maximum award is noted on the Housing Delivery Goals Charts:

Community Development Block Grant (CDBG) Program

The Housing Rehabilitation Programs have provided financial and technical assistance to low

and moderate-income persons that own and occupy single-family residential structures in the city

limits. Housing assistance to homeowners has been available through emergency grants,

deferred payment loans (forgiveness grants), and low interest revolving loans.

Programs/strategies therein include (Exhibit 3):

1. Housing Strategy

Minor Home Rehabilitation: Priorities in this area are to be addressed primarily

through the State Housing Initiation Partnership (SHIP) program with some

additional funding from CDBG. IF SHIP Funding remains consistent at the projected

FY 2006 level over the next five (5) years, the City will have a total of $1,240,000 to

fund home repairs, weatherization and shuttering expenses. This will assist a total of

eighty-three 83 families assuming the average funding per household is $15,000. If

CDBG funding is added at the recommended level of $150,000 annually and

extended for five (5) years, an additional fifty (50) households could be assisted

through FY 2010.

18

Homeowner Assistance: These priorities are anticipated to be addressed primarily

through the SHIP program with some additional funding from CDBG. In FY 2006,

SHIP is projected to spend approximately $250,000 for first time homebuyer

assistance. If this funding level holds throughout the upcoming five (5) year period, a

total of $1,240,000 will be available for this priority and should provide assistance to

approximately fifty (50) households. This funding also includes homeownership

counseling services to funding recipients. Approximately 10% of SHIP funds

($248,000 over five (5) years) will be used for program administration for both the

SHIP homeownership assistance and minor home rehabilitation activities. There is

no recommendation fur funding from CDBG for this program in the first year of this

plan. However, the program will be evaluated annually to determine if funding

should be budgeted in the Action Plan. Additionally, the Broward County Office of

Housing Finance historically used HOME and SHIP funds to leverage

homeownership financing for qualified Deerfield Beach households and this activity

is expected to continue. Deerfield Beach residents will also utilize FHA

homeownership assistance funding.

Affordable Rental Housing: These priorities are addressed through the federal

Section 8 rental assistance funding program. If HUS Section 8 rental assistance

funding remains at current levels in the FY 2006 2010 period, an estimated 481

families may receive rental assistance totaling approximately $3,148,233 from

Deerfield Beach Housing Authority and other housing authorities serving City

residents.

2. Homelessness Strategy

The City will provide no specific services to the homeless over the five0year timer

period of this plan. However, the City Police Department (Broward Sheriffs Office)

will continue its policy of assisting homeless individuals and families found on City

streets by transporting them to emergency shelters and food locations. The City will

also work with the County to strengthen its countywide continuum of care, and

support and facilitate that program as necessary.

19

3. Special Needs (Supportive Housing) Strategy

In all categories except youth and families, the City has assigned low priority for

local governmental action and does not intend to undertake any specific activities in

these areas. The City will continue to offer the extensive array of senior-oriented

facilities, programs, services, as well as, other existing services which help meet the

needs of Deerfields seniors and elderly. Funding of $83,581 is available in the

recommended one-year Action Plan through Public Service Grants. At this funding

level, $417,905 would be available over the five years for this important need.

4. Non-Housing Community Development Strategy

Table 40 lists the Citys proposed non-housing community development actions and

projects by CDBG eligible category. (Exhibit 4)

5. Reduction of Affordable Housing Barriers

As a recipient of State SHIP funds, the City must conduct a required affordable

housing regulatory reduction self-review study, and review all of its development

regulations in detail to remove unnecessary barriers to affordable housing and reduce

the cost of housing, and to provide incentives for the construction of such housing.

The Citys Affordable Housing Advisory Committee has conducted this review and

recommended appropriate incentives and amended procedures. These incentives have

been adopted by the City Commission, and include expedited zoning and permit

reviews, impact assessment of new regulations on the cost of housing, and waiver

and/or alternative payment method for impact fees.

6. Reduction of Lead-Based Paint Hazards

The FDHRS Public Heath Unit continues to monitor and respond to all suspected

cases of lead poisoning in Broward County. However, this continues to be a very

minor problem in the City, probably due in large part to the relative young age of

Deerfield Beachs housing stock. The City will take the following actions to ensure

this serious health issue is properly monitored and abated where necessary and

appropriate:

20

o Screen for lead-based paint in all housing rehabilitation programs.o Include lead-based paint abatement as an eligible activity in all of its

rehabilitation activities.

7. Anti-Poverty Strategy

The Citys anti-poverty strategy is to continue to foster economic growth and job

creation for the broad cross-section of resident income levels, including low-income

households. The economic growth of Deerfield Beach since 1990 has allowed the

City to gradually increase its tax base and create new employment opportunities. This

growth is expected to increase far into the 21st century. The strategy will also seek to

increase job training, employment readiness skills and educational opportunities for

low-income households, as well as, the matching of employment openings with

potential local applicants. The City will also assist local first-stage business start-ups

and entrepreneurs through business incubation facilities and technical assistance, such

as business planning and marketing.

8. Institutional Structure

Deerfields objective is to pursue an integrated approach in the provision of needed

programs and services including:

o Cooperation in the continuation of programs administered by other entities; and

o Use of CDBG funds for projects and activities either not funded or unfounded by other sources.

This is consistent with HUD regulations that permit communities to develop a unified

approach and vision to comprehensively address local problems through the

consolidated planning process.

9. Organization Coordination Strategy

The City, through its Planning and Growth Management Department, will be the

primary entity responsible for coordinating and implementing these programs. During

the coming year, the City will enhance its organizational cooperation strategy with

21

Broward County, the Deerfield Beach Housing Authority, and other applicable

organizations.

10. Public Housing Resident Initiative

The Deerfield Beach Housing Authority is located within the City and serves a large

number of Deerfield residents. There are no known public housing resident initiatives

currently pending before the Housing Authority.

11. Support for Grant Applications by Other Agencies

The City will support the application of other entities for funding under competitive

grant programs wherever possible, as shown in Table 41. (Exhibit 5)

22

GENERAL FINDINGS

Citys Finance Department Reimbursement of CDBGs Line of Credit

A January 22, 2009 letter from Peter Parkin of the CDD to Maria R. Ortiz-Hill of the US

Department of Housing and Urban Development (HUD), indicates that the City had to

reimburse $95,037.85 from the Citys general fund for, funds expended that exceeded HUDs

80% rule allowable under the CDBG program definition of low and moderate income person.

As per the Code of Federal Regulations Title 24: Housing and Urban Development, 24 CFR

570.3 the definition of low and moderate income person is,

Low and moderate income person or lower income person means a member of a

family having an income equal to or less than the Section 8 lower income limit

established by HUD. Unrelated individuals shall be considered as one person families for

this purpose. The method for determining income under the Section 8 Housing

Assistance Payments program need not be used for this purpose.

As per HUD.gov the Section 8 lower income limits are defined as, HUD sets the lower income

limits at 80% and very low income limits at 50% of the median income for the county or

metropolitan area in which you choose to live.

Construction Cost Estimating & Preparing Bid Specification

Bid #2003-04/01

A memorandum dated May 25, 2004 from Donna M. Council, Purchasing Agent to Larry

Deetjen, City Manager states,

Proposals for construction cost estimating & preparing bid specification for the citys

minor home repair/improvements programs were received on January 8, 2004. Thirty-

three companies were solicited, resulting in the receipt of five (5) proposals: Evans

Environmental and Geosciences, SoFI Corporation, Housing and Assistive Technology,

Minority Home Builders, and Double XX Consulting.

23

The memorandum continues to state that,

Recommendation of dual award is made to SoFI Corporation, 2325 NE 20th Street, Fort

Lauderdale, FL for the evaluation of the visible and accessible systems and components

of the home and to Housing and Assistive Technology, Inc., 2000 Powerside Terrace,

#505, Miami, FL for ADA accessibility installations and repairs, interior and mechanical

systems. The initial contract shall be for a period of twelve (12) months, with the right to

renew, upon mutual consent for four (4) additional twelve months.

A Resolution No. 2004/103 was passed for Bid #2003-04/01 on June 15, 2004 which indicated

that SoFI Corporation and Housing and Assistive Technology, Inc. were awarded the bid for

Construction Cost Estimating and Preparing Bid Specifications for the Citys Minor Home

Repair/Improvements programs. The estimated annual expenditures are $35,000 (Exhibit 6).

The agreements for SoFI Corporation and Housing and Assistive Technology, Inc. differ

slightly. The Agreement between the City of Deerfield Beach and SoFI Corporation indicates a

twelve (12) month period for the initial contract, and the Citys right to renew the contract for

four (4) additional twelve (12) month periods (Exhibit 7). The Agreement between The City of

Deerfield Beach and Housing and Assistive Technology, Inc. replicates the ability for the City to

renew the contract for four additional twelve month periods, but also states other clauses. These

paragraphs indicate that, HAT shall preserve and make available all financial records,

supporting documents, statistical records, and any other documents pertinent to this contract for a

period of three (3) years (Exhibit 8).

A Memorandum dated January 13, 2003 from Sandra Francis of Purchasing to Ada Graham-

Johnson, the City Clerk, indicates that the contract between SoFI Corporation and the City was

approved on June 1, 2004. The Memorandum also states that a $10.00 Contract Indemnity

check must be mailed with each contract (Exhibit 9).

A Memorandum dated July 22, 2004 from Sandra Francis of the Purchasing Division to Ada

Graham-Johnson, the City Clerk, indicates that the contract Housing and Assistive Technology,

24

Inc. and the City was approved on June 1, 2004. The Memorandum also states that a $10.00

Contract Indemnity check must be mailed with each contract (Exhibit 10).

A point system was utilized in the awarding of the bid for Construction Cost Estimating &

Preparing Bid Specification. A maximum of 100 points could be awarded to the contractors

based upon the following criteria:

Category: Maximum Points:

Personnel Expertise of Inspection Services 10

Personnel Expertise of Inspection Administrator 5

Governmental Inspection Experience of Firm Listed 25

Software/Hardware 20

Reasonableness of Proposed Prices 40

A copy of the bid summary sheet and the points awarded to each contractor is enclosed as

Exhibit 11.

On November 8, 2005 a memorandum was sent from Donna M. Council to Larry Deetjen

recommending that the contractors (SoFi Corporation and Housing and Assistive Technology,

Inc.) and their respective contracts be renewed.

A Resolution No. 2005/213 was approved by the City Commission on November 15, 2005

stating, recommendation of dual award was made to SoFI Corporation and Housing and

Assistive Technology, Inc. for an estimated annual expenditure of $30,000.00; (Exhibit 12).

An October 10, 2006 memorandum from Donna M. Council to Ada Graham-Johnson, Acting

City Manager states that the contracts are to expire on October 21, 2006. Ms. Council states that,

Recommendation of renewal of the contract is made to SoFi Corporation on a lump sum

fee per task basis for a six (6) month period. We will be reviewing the required tasks and

be soliciting requests for proposals in the near future. Recommendation of renewal of the

25

contract is made to Housing and Assistive Technology on a lump sum basis for a twelve

(12) month period.

A Resolution No. 2006/241 was approved by the City Commission on October 17, 2006 stating,

under the terms of the original bid (Bid #2003-04#01) for construction cost estimating and

preparing bid specification for the Citys Minor Home Repair/Improvements programs for an

estimated annual expenditure of $51,000, and specifying the funds therefore (Exhibit 13).

An e-mail was sent by Donna M. Council on November 21, 2007 indicating that at the request of

Debra Chatman a RFP #2006-07/35 was issued and received on September 20, 2007. The RFP

had not been awarded as of the date of the e-mail.

Kessler was also provided with two other Requests for Proposals (#2007-08/14 and 2008-09/04).

Both of these RFPs have not been awarded as per a discussion with the Purchasing Agent Donna

M. Council.

Kessler review of the checks made payable to Housing and Assistive Technology, Inc. has

determined that no checks were written for work conducted in conjunction with the Construction

Cost Estimating.

James Joyce Construction

It should be noted that James Joyce Construction, a contractor who conducted a sizeable amount

of rehabilitation construction work, previously had complaints filed with the Florida Department

of Business & Professional Regulation against them for conducting electrical work without a

license, complaints #1206659 and #1206664.

William LaMarr Ruffin

A resolution was proposed and approved on January 13, 2009 for William L. Ruffin for,

Construction cost estimating and preparing bid specifications for the Citys Housing Repair

Program under the terms of municipal code section 38-132 unusual or emergency

circumstances.

26

The Agreement between the City of Deerfield Beach and William LaMarr Ruffin, General

Contractor is dated January 13, 2009. The contract period for the agreement is indicated as

January 1, 2008 through January 31, 2009. The agreement also states that the Basis of

Compensation is Lump Sum per task; agreed in writing by the parties. Additionally the

following items are outlined in the agreement:

Item 1 Initial site visit w/homeowner to determine what repairs need to be made, if any

and take pre-construction photos..$435.00 per occurrence

Item 2 conduct pre-bid conference with Citys qualified contractors at clients home to

discuss repairs to be made$200.00 per occurrence

Item 3 meet contractor of record and homeowner to conduct final inspection of repairs

made, take final photos of completed repairs and provide punch-list (once) of contractor

to City via electronic mail.$250 per occurrence

Item 4 additional inspections not covered in Item 3 above (i.e. dispute resolution,

payment inspections, etc.)....$150.00 per occurrence

The agreement also indicates that William LaMarr Ruffin shall procure and maintain insurance

including General Liability Insurance, Automobile Liability Insurance as well as Employee

Fidelity and Crime. The City will be named as an additional insured on all policies.

Also contained in the documents provided to support the agreement were thirty two purchase

orders during the time period of February 26, 2009 through December 7, 2009. All of the

purchase orders were for Twenty Second Century Roofing of PO Box 120487, Fort Lauderdale,

FL. Twenty Second Century Roofing, Inc. is an active Florida corporation whose officers

and/or directors are listed as Heron Small and William Ruffin.

It should be noted that Kessler discovered during the case review that checks were payable to

William LaMarr Ruffin, Twenty Second Century Roofing, Inc. and William Ruffin (Twenty

27

Second Century Rfg, Inc.). There has been no documentation provided that explains why checks

would be made payable in some cases to the individual and other times to a corporation, when a

contract was entered into with the individual.

Grant Recipients Affiliations with Other Corporations

Kessler conducted a review of the individuals associated with entities that obtained grants to

determine any non-arms length transactions. Analysis of the individuals and entities linked to

them are enclosed as Exhibit 14.

Other individuals receiving grants

As per a November 4, 2002 letter from Stephanie McMillian contained in the case file for Henry

H. Hall, II, it states that, Funding for minor home repairs to your property was approved under

the City of Deerfield Beach State Housing Initiative Partnership (S.H.I.P.) Minor Home Repair /

Weatherization Program. The letter is addressed to Jounice Green of 264 SW 1st Street,

Deerfield Beach, FL a previous officer of Emmanuel Human Services, Inc. f/k/a Gold Coast

Impact Community Development, Inc. (Exhibit 15).

The loan agreement dated January 28, 2003 was satisfied as per a May 12, 2008 letter from

Suzan Less.

City Employees receiving awards

Kessler was provided with a list of City Employees that had received funding through the CDD

(Kessler reviewed the ones in bold):

Darrel Adams

Wayne Adams

Justin and Thomas Alfred

Barry Baker

Martha Bennett

Edwin Butler

Gloria Goodwin

28

Sammie Huggins

Gail Knapp

Inger and Shannon Knowles

David McFadden

Lamar McThay

Jeffrey Nugent

Oscal and Anne Rousseau

Christopher Schindell

Sanford Shelton

Angela Storr

Pamela and Michael Weiss

Johnny and Mildred Westbrook

Due to the limited scope of the internal controls review conducted by Kessler, only a select

number of cases were reviewed in which the recipient of the funding was a City employee. The

reviews of these cases are outlined in the Review / Analysis of Cases section of this report.

29

REVIEW/ANALYSIS OF CASES

Michael and Pamela Weiss

521 SE 3rd Place

Deerfield Beach, FL 33441

(Background/Disbursements - Exhibit 16)

The applicant and co-applicant submitted an application for assistance through the SHIP and

CDBG rehab program on October 20, 2005 (Exhibit 17). This is the only application contained

in the file. The application for assistance indicates that applicants assets are listed as

$79,970.45. Although the application is dated October 20, 2005, the file contains many signed

release of information forms dated July 21, 2005 (Exhibit 18). The file also contains these forms

having been completed by outside parties and returned to the CDD and date stamped either July

23, 2005 or August 8, 2005. Kessler also noted many other documents in the file with date

stamps that precede the date of the application.

Also contained in the file is a letter dated February 24, 2004 signed by Babette dAmours, Grants

Program Coordinator indicating that the preliminary SHIP application is complete, a February

24, 2004 letter to Wachovia Bank requesting documentation pertaining to two accounts, an

October 8, 2004 letter signed by Deborah D. Dalton, Grants Program Coordinator indicating that

the applicants were placed on a waiting list and an October 20, 2005 award letter signed by

Andrew E. Hyatt, Grants Program Administrator congratulating the applicants for having been

approved for $15,000.00 in funding and suggesting that they schedule an appointment to

complete the income certification form (Exhibit 19). The income certification form showing

total household income of $55,216.61 in the file is dated October 20, 2005, yet Kessler found no

outside verifications dated after the certification form. It is also unusual that the date of the letter

is also the date that all of the paperwork was signed.

On January 4, 2006 SoFI Corporation (SoFI), an entity retained by CDD to evaluate house

structure conditions and estimate the cost of repairs, estimated that the Work Specification for

the home repairs would be $16,300.00 (Exhibit 20). SoFI was also retained at the completion of

30

the construction to inspect the contractors work and advise CDD of quality and completeness.

In this estimate, SoFI developed a scope of work to include: installation of 5 battery powered

smoke detectors, replacing certain outlets with GFCI receptacles, re-roofing the home, replacing

the front entry door and frame, replace all windows in the Florida room, replace the glass and

jealousy windows at the combination picture window, repaint the exterior of the house, install

rain gutters and downspouts, and replace wood trim around garage (Exhibit 21). SoFI charged

$500.00 to conduct this assessment. No supporting copy of a check was included in the file and

the cost of the assessment was not included in the deferred payment loan agreement in the

amount of $15,700.00 dated July 17, 2006.

A solicitation for Bid #2005-06/13 was submitted to six contractors on March 23, 2006, and a

mandatory pre-solicitation meeting was to be held on March 31, 2006. Four bids were received

by the City. A summary sheet of the bids submitted is attached as Exhibit 22.

EAJ Homes, Inc. $22,282.00

East Coast Contractors, Inc. $34,751.841

James Joyce Construction Corp. $32,370.00

ES Cummings Construction, Co. $23,200.00

Based upon documentation maintained in this case file, a spreadsheet labeled Invitation to Bid-

Minor Home Repair (SHIP Program) Bid # 2005-06/13 indicates that some sort of reduction was

presented by ES Cummings Construction, Co. lowering their bid to $17,000.00. No

documentation exists in the file indicating that the other bidders had a similar opportunity to

lower their bid. A letter dated May 8, 2006 from Donna M. Council, Purchasing Agent to Larry

R. Deetjen, City Manager indicates that it is recommended that ES Cummings Construction, Co.

be awarded the contract at $17,000.00 (Exhibit 23). The amended Specification for Repair

Work indicating the $17,000.00 job cost summary was signed and dated by the contractor and

applicant on July 17, 2006.

1 Bid tabulated incorrectly on the detailed sheet and the specifications were changed to include items not included on the original specifications.

31

A Deferred Payment Loan Agreement was entered into by the City and the applicants on July 17,

2006. The agreement indicates that the principal amount of the loan is $15,700.00 and is not to

exceed $20,000.00. Additionally, the agreement indicates that the zero interest loan shall be

forgiven after a period of five years and shall depreciate at a rate of 20% (or 1/5th) per year.

A letter was sent to the applicants on February 5, 2009 from Peter Parkin of the CDD, indicating

that additional funds were required to complete repairs to the applicants home and that the

original lien against the property must be amended. The letter also requests that the mortgage

modification document be signed and notarized by February 20, 2009 and returned to the CDD.

The Mortgage Modification Agreement increases the amount of the mortgage from $15,700.00

to $19,613.35. No signed copy could be located in the file and it was determined the document

was never filed with Broward County (Exhibit 24).

The contract between ES Cummings Construction, Co. and the property owners signed on July

17, 2006 reference the Bid #200506/13, and states that $17,000.00 is due from the homeowner

to ES Cummings Construction, Co. Handwritten on the contract is the notation that $15,700.00

is to be paid by the City and $1,300.00 is to be paid by the homeowner.

On December 6, 2006 a negative change order was submitted by ES Cumming Construction, Co.

to the City of Lauderhill (sic), referencing a contract entered into on November 13, 2006. In

fact, the contract was dated July 17, 2006. The address was also incorrectly referred to as 321

SE 3rd Place. The change order states that as per the request of the homeowners gutters and

downspouts were removed from the job resulting in a decrease in the amount of $800.00. The

change order is attached as Exhibit 25.

An additional change order was submitted by ES Cummings Construction, Co. on March 20,

2007 for three items resulting in an increase to the job of $1,600.00 which was authorized by

Debra Chatman on April 2, 2007. The change order includes a description of work indicating a

build out of a wall under the living room window at $1,800.00, deleting additional cost for larger

windows to fill opening at ($300.00) and replacing trim around the garage door in the amount of

$100.00 (Exhibit 26). The replacing of the trim around the garage door was initially

32

recommended in the SoFI estimate and it is unclear why it was removed from the specifications

sent to the contractors.

Upon reviewing this file, Kessler noted a significant amount of correspondence from the

homeowner complaining about the quality of work conducted by the electrical contractors. It

appears that Vicon Electric, Inc. was given a permit to conduct electrical work on the property

dated December 28, 2006. The homeowners claim that all the electrical work was shoddy and

conducted by the contractor ES Cummings Construction, Co. as per an e-mail dated Tuesday,

January 30, 2007 to Debra Chatman (Exhibit 27).

A second final inspection was conducted on January 7, 2007 by SoFI after they had already

approved the work delineating nine items that needed to be corrected by ES Cummings

Construction, Co. (Exhibit 28).

An Inspection Inquiry indicates that the electrical inspection was completed on November 21,

2007 by the City and that a second electrical contractor, All Pro Electric, Inc. submitted an

invoice on December 21, 2007 for correction of the electrical work. The total amount submitted

for reimbursement was $1,800.00. Nowhere in the file could Kessler find a charge back to ES

Cummings for the work they were originally paid to do.

ES Cummings Construction, Co. was paid a total of $17,000.00 in two separate checks by the

City. No documentation was found in the case file which indicates if the homeowners provided

the $1,700.00 stipulated in the contract dated July 17, 2006.

The All Pro Electric, Inc. Final Request for Payment on Purchase Order is signed by Debra

Chatman for the contractor on December 19, 2007. The Community Development Manager did

not sign the request and Debra Chatman signed as the CD Inspector (Exhibit 29).

33

Martha Rose Lawson

1440 SW 6th Avenue

Deerfield Beach, Fl 33441

(Background/Disbursements - Exhibit 30)

An unsigned and undated Housing Repair Program Application was the only application found

in this file. On the application, the applicant indicates that she owns no real property and that her

monthly rent is $731.10 (Exhibit 31). The applicant originally signed the Housing Repair

Program Certification portion of the application document on 9/29/2006. This date was

redacted using correctional fluid and the date was changed in a different handwriting to

12/29/2006. Also enclosed in the file is a Home Loan Statement for September 2006 from

Washington Mutual Home Loans indicating that the borrower for the mortgage of 1440 SW 6th

Avenue, Deerfield Beach, FL is an Eddie Moore Jr. and the monthly payment including

principal, interest and escrow totals $731.10. Additionally in the file is a copy of an insurance

bill for the property listing Eddie Moore Jr. and a death certificate indicating Eddie Lee Moore

Jr. died April 5, 2003 (Exhibit 32). A search of the Broward County Property Appraisers

website indicates that 1440 SW 6th Avenue, Deerfield Beach, FL is owned by Martha Rose

Lawson and Sedrick Pernell Lawson (Exhibit 33).

The only bank account listed for the applicant indicates in Debra Chatmans handwriting that it

was opened on March 5, 2007 with $400.00. The applicant is listed as the only member of the

household with a gross annual income of $4,390.00 from Social Security.

On March 12, 2007 a letter was sent by Debra Chatman to the applicant indicating approval for a

maximum of $15,000 to repair the home. A second letter was sent by Debra Chatman on

September 7, 2007 to the applicant indicating that $17,780.00 in SHIP funds had been approved

and that Terramar Construction, Inc. would be the contractor completing the work (Exhibit 34).

On March 27, 2007 SoFI submitted an estimate based upon their evaluation estimating the cost

of repairs to be $17,500.00 (Exhibit 35). And it again was noted that the specifications as

prepared by SoFI differ from the specifications sent to the contractors for bid. In fact Kessler

34

again found that many of the original specifications were removed from the revised

specifications sent to the contractors allowing the contractor to later submit a change order.

On July 17, 2007 a letter was written by Donna Council to the homeowner indicating that a pre-

proposal conference was being held at the property on July 30, 2007, and that the bids will be

opened on August 14, 2007. The letter states, All contracts for repair are between you and the

contractor. The City of Deerfield Beach is not a party to any of the contracts. The Citys

responsibility is limited to the inspection of the work and the approval of payments. The City

will insure that your work is completed in a timely manner. However, any changes in the work

will also change the completion date.

The following construction companies placed bids on the property:

Contractor: Base Bid: Options: Total:

Joines Construction and Development, LLC $10,700.00 $4,450.00 $15,150.00

Crognale & Associates $20,950.00 $5,850.00 $26,800.00

Terramar Construction $12,500.00 $5,280.00 $17,780.00

On August 27, 2007 a memorandum from Donna Council to Mike Mahaney indicates that Joines

Construction and Development, LLC was not awarded the bid because they had four projects

currently underway (Exhibit 36). It is unclear why the City restricts work to a contractor yet

invites them to bid if they already know they are not going to give them the work.

Also contained in the file is a Resolution No. 2007/202 dated September 4, 2007 which indicates

that $19,030.00 has been approved for repairs on the applicants property. The Resolution also

states that Terramar Construction, Inc. submitted the lowest bid (Exhibit 37). The documents in

the file outlining the bids indicate that Joines Construction and Development, LLC was in fact

the lowest bidder, underbidding Terramar by $2,630.00 (Exhibit 38).

35

An Agreement between the Owner and Contractor was entered into on September 25, 2007

indicating the cost of the repairs as totaling $17,780.00. The document was signed and dated the

day before by Terramar Construction, Inc. on September 24, 2007.

A Notice to Proceed from the CDD dated September 25, 2007 (a day after the contract was

signed) to Terramar Construction indicates that, Permits must be obtained and work shall be

completed within thirty-five (35) days (by November 12, 2007) or be subject to liquidated

damages as set forth in Paragraph 2(a) of this documents (sic). (Exhibit 39). The notice also

indicates that the subcontractor on the job is Cassia Electric and John Moorer Plumbing.

A SHIP Deferred Payment Loan Agreement dated September 25, 2007 indicated that a zero

interest loan in the principal amount of $17,780.00 was being provided to the applicant. The

terms of the mortgage indicate that the principal amount shall depreciate over a period of five

years at a rate of 20% (or 1/5th) per year.

On October 6, 2007 a change order was submitted by the contractor for additional work to be

conducted including: replace rails, hardware and install remote control ($500.00), repair

mold/mildew ceiling and repaint ($3,000.00), baseboard ($100.00) (Exhibit 40). It should be

noted that the term baseboard was handwritten on the change order along with all of the pricing

indicating that it was added after the original change order was completed. The change order is

dated October 6, 2007 by the contractor and is approved by Debra Chatman on October 9, 2007.

A day before the contractor receives payment for both the original and change order job. The

change order indicates that, Owner will pay Contractor $3,600.00 for additional services, from

Contingency. The amount is over and above the original amount in the agreement. There is no

documentation in the file indicating that the applicant ever reimbursed the City for the $3,600.00

and on Pay Authorization CD2007-326 the City pays the contractor the $3,600.00. Furthermore

the change order was never approved by the Community Development Manager.

The Contractors Partial Request for Payment enclosed in the file requires the signature of the

contractor, homeowner, CD Inspector and two Community Development Department personnel.

Although the document is signed by the contractor on October 10, 2007 and an invoice was

36

submitted to the City, the homeowner did not sign the document until October 15, 2007. A

check was issued to the contractor on October 18, 2007. Debra Chatman signs the document as

the CD Inspector and the Community Development Coordinator, fails to date the document and

the document lacks the signature of the Community Development Manager (Exhibit 41).

In a November 29, 2007 letter from Debra Chatman to Sharma Baboolal of Terramar

Construction, Inc. it states that the Lawson residence and the Royal residence are 15 days past

their completion date despite the fact that they had released 92% of the funds on this project. The

letter continues stating that contractor was being assessed a penalty of $100.00 per day as per the

contract and $2,400.00 has accrued ($1,200.00 per contract) (Exhibit 42).

Also contained in the file is a fax sent from George Murray, Murray and Sons Home

Improvement to Debra Chatman dated February 28, 2008 indicating that additional repairs to the

property would total $1,800.00. The actual amount paid by the City based on an invoice dated

April 29, 2008 and submitted by Murray and Sons was $1,900.00 (Exhibit 43). The scope of the

work performed appears to have been billed and paid to Terramar and Kessler found no charge

back in the file.

A letter from SoFI indicates that a final inspection was completed on the property and that there

are four items in the punch list still required to be completed, but that all other work complies

with the specifications and the homeowner is satisfied. The corresponding pictures are dated

January 17, 2008.

37

Dawn Burke Rolle

1111 SW 7th Avenue

Deerfield Beach, Fl 33441

(Background/Disbursements - Exhibit 44)

The Housing Repair Program Application is not signed by the applicant (Exhibit 45). The

Housing Repair Program Certification attached to the application is signed on January 10, 2007.

Additionally, the applications section regarding estimated assets is left blank.

A Nationwide Insurance Company of Florida insurance policy for the property address indicates

that a Verna Johnson is the policy holder of the homeowners insurance. Additionally, a JEA

electric, sewer and water bill indicates that a Verna V. Johnson is the name of the account holder

as of July 5, 2007. A Quit-Claim Deed indicates that on November 7, 2006 the property located

at 111 SW 7th Avenue was transferred from Verna Johnson to Verna Johnson and Dawn Burke.

There is no co-applicant on the Housing Repair Program Application, Verna Johnson should

have been included in the application and all assets and income should have been calculated for

this individual. A copy of the Broward County Property Appraisers report for the property

showing Verna Johnson and Dawn Burke as owners is attached as Exhibit 46.

On March 12, 2007 a letter from Debra Chatman to the applicant indicates that Dawn Burke

Rolle (it is not clear when she was divorced) had been approved for a maximum of $15,000.00 to

repair the home (Exhibit 47). Another award letter was sent by Debra Chatman to the applicant

dated September 7, 2007 which indicated that the applicant was approved in the amount of

$19,780.00 in SHIP funds (Exhibit 48).

An estimate was conducted by SoFI on March 27, 2007, that indicated that the estimated cost

would be $15,950.00 for the necessary repairs (Exhibit 49). Bids were submitted in response to

an invitation to bid for Bid #2006-07/32 and three bids were received (Exhibit 50).

38

Schedules of the bids submitted are as follows:

Contractor: Base Bid: Options: Total:

Joines Construction and Development, LLC $13,130.00 $3,325.00 $16,455.00

Crognale & Associates $19,750.00 $4,700.00 $24,450.00

Terramar Construction $15,950.00 $4,350.00 $20,300.00

The original Work Specification conducted by SoFI was much more detailed and contained a

greater amount of work to be conducted in comparison to the Revised Work Specification

submitted to the contractors. For Example Scope Item #2.1 as per SoFI includes, replace

existing outlets with GFCI receptacles in kitchen, bathrooms, exterior outlets, garage port or

carport, laundry room and any other locations as required by NEC and FBC. The same item for

the Revised Work Specification includes, Replace existing outlets with GFCI receptacles in

kitchen (2), bathroom (1), as required by NEC and FBC. Additionally, items number 6.0 and

7.0 as per the Work Specifications prepared by SoFI were removed from the Revised Work

Specifications submitted to the contractors. No reason was provided in the file as to the changes,

yet the cost prepared by the contractor exceeds the fair estimate.

Resolution Number 2007/208 was approved on September 4, 2007 in the amount of $21,425.00

(Exhibit 51). This amount incorrectly included the options (at a price of $3,325.00) twice to the

base bid to bring the total cost to $19,780.00 ($13,130.00 + $3,325.00 + $3,325.00 = $19,780.00)

(Exhibit 52). The actual bid from Joines was for $16,455.00 including the options. The

$19,780.00 figure was added to the cost of contingencies at 10% and totaled the $21,425.00.

Joines was ultimately paid $18,205.00 for the job.

A Deferred Payment Loan Agreement was filed on October 2, 2007 and indicated that the total

cost of construction would be $19,780.00. The terms of the Agreement indicate that the

principal on the zero interest loan amount shall depreciate at a rate of 20% (or 1/5th) per year.

A February 5, 2009 letter from Peter Parkin to the applicant indicates that the repairs conducted

exceeded the original lien filed for $19,780.00, therefore the original lien must be modified to

reflect the total repair funds expended on the home repair project. A mortgage modification

39

agreement dated February 10, 2009 reduces the mortgage to $19,151.30, $628.70 less than the

original.

On December 13, 2007 a check in the amount of $16,650.00 was made payable to Joines

Construction & Dev., LLC. This payment was for an invoice of $14,000.00 including the

anticipated work to be conducted and a change order for $2,650.00. The change order included:

Replace two ordinary receptacles in living room ($200.00)

Abandon electric to sprinkler timer in front yard (corrective action in response to Code

Violation issued by City Inspector) ($300.00)

Abandon electric to water purifier at side of house (corrective action in response to Code

Violation issued by City Inspector) ($300.00)

Deleted work: replace one metal door (-$900.00)

Replace one extra window ($850.00)

Demo and dispose of damaged section of dining room wall ($950.00)

The change order included the replacement of one extra window at a cost of $850.00, this should

have been done as per the Revised Work Specification completed by the contractor. Item #3.3 of

the Revised Work Specifications indicates that Replace all windows located throughout the

house with new white aluminum single hung units.

The final inspection was done by SoFI on December 18, 2007 and indicated that the window at

rear left corner of house and window on south side of house are missing hurricane shutters

(Revised Work Specification 4.0), it also shows that the homeowner did not sign off on the final

inspection. No resolution documentation is maintained in this case file.

40

Rolex and Anne Jean-Baptiste

1321 SW 10th Terrace

Deerfield Beach, Fl 33441

(Background/Disbursements - Exhibit 53)

File processed by City of Deerfield Beach with assistance from Community Redevelopment

Associates of Florida, Inc.

A review of this file indicates that the applicant submitted a City of Deerfield Beach Home

Program application dated December 5, 2007. Contained within the file is a Florida Housing

Finance Corporation Resident Income Certification dated May 16, 2007. The cash value shown

on the form for the Washington Mutual account ending in -2086 was stated as $1,433.17 (the six

month average balance) when the actual cash value as of April 12, 2007 was $5,261.51.

Additionally on two Bank of America accounts of one of the applicants the CDD used the lower

of either the current balance or the average six month balance for the calculation of assets. There

is no consistency with the use of the average six month balance or the current balance.

In an updated City of Deerfield Beach Resident Income Certification dated April 25, 2008, again

there is no consistency in relation to the use of the average six month balance or the current

balance of the bank account benefiting the applicant when calculating assets as the lower of the

numbers was used. A Bank of America account balance was $7,224.83 as of March 14, 2008 but

the average six month balance of $194.67.

In January 23, 2008 a letter was written by Deaverlyn M. Brown of Community Redevelopment

Associates of Florida, Inc. indicates that various documents must be forwarded to the office by

February 1, 2008 or the which application will be withdrawn from consideration (Exhibit 54).

On March 12, 2008 a supplementary letter was written to the homeowners again requesting these

documents (Exhibit 55). It is clear that since the applicants did not provide the documents by

February 1, 2008 as stipulated that the application shouldnt have been considered for funding.

This case file was composed of two separate rehabilitation projects being conducted on the same

property. A separate review of each rehabilitation project has been conducted.

41

Emergency Roof Repair

No estimate was contained in the file to determine a figure for the cost of the emergency roof

repair. Two bids were received for the Emergency Roof Repairs conducted on the applicants

home. The bid opening was on August 10, 2007 and according to an August 28, 2007

memorandum from Donna Council to Mike Mahaney six prequalified companies responded

resulting in two bids (Exhibit 56). The two bids considered were from Crognale & Associates,

Inc. ($10,500.00) and Horizon Group, Inc. ($11,765.00) (Exhibit 57).

A letter from Debra Chatman dated August 28, 2007 to the homeowners indicates that

$10,500.00 in SHIP funds has been approved for repairs (Exhibit 58). This letter is sent to the

homeowners prior to approval of the resolution dated September 4, 2007. A resolution was

passed on September 4, 2007 by Albert R. Capellini indicating that $11,550.00 was approved in

funding for the rehabilitation of the applicants home (Exhibit 59).

On September 4, 2007 a Deferred Payment Loan Agreement was signed by the homeowner in

the amount of $10,500.00, to be satisfied over a period of five years. The term of the zero

interest loan indicate a satisfaction period of five years to depreciate at a rate of 20% (or 1/5th)

per year.

The Agreement between Owner and Contractor was dated September 4, 2007 and signed by one

applicant on September 7, 2007 and the co-applicant on September 13, 2007. The contractor

signed the contract on August 30, 2007. It is unclear how the contractor could sign the document

prior to the contract date and before funds were allocated to the project (Exhibit 60).

A Notice to Proceed document was signed by the contractor, Community Development Division

staff and the homeowner on September 4, 2007 and by Debra Chatman. The date next to Debra

Chatmans name has been redacted using correctional fluid and September 7, 2007 is listed

(Exhibit 61). The document indicates that, Permits must be obtained and work shall be

completed within fifteen (15) days (by September 21, 2007) or be subject to liquidated

damages as set forth in Paragraph 2(a) of this documents.

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On September 20, 2007 a change order was sent to Debra Chatman indicating, As per your

request please find our request for change order for the above residence. Additional decking

required: 320 sq. ft. @ 5.15 sq. ft. On September 20, 2007 an invoice was issued by Crognale

& Associates Construction, Inc. to Debra Chatman in the amount of $12,148.00. Included on the

invoice was $1,648.00 for 320 sq. feet foot of additional Rotting Deck @ $5.15/sq. Kessler

noted a building permit was issued to Crognale & Associates for the construction of the roof, on

September 14, 2007. The Contractors Final Request for Payment on Purchase Order was signed

by the homeowner and contractor on September 20, 2007, yet was unsigned the CD inspector or

Community Development Division personnel. The total amount paid to Crognale & Associates

Construction, Inc. is $12,148.00 (Exhibit 62).

A Final Inspection was conducted on the property on August 23, 2008. The inspection

determined that the work conducted was disapproved, as per the inspector William LaMarr

Ruffin (Exhibit 63).

In a December 19, 2008 letter from Suzan Less to the homeowner it states, Enclosed is the

Satisfaction of Mortgage that was originally executed by you on September 4, 2007. (Exhibit

64). It is unclear why a satisfaction of mortgage document would have been executed by the

City when the mortgage should not have been satisfied until September 4, 2012.

Home Repairs

No new application applying for funds was contained in the case file applicable to this award of

$11,900.00 of City SHIP/CDBG funds and $28,150.00 in CRA HOME funding.

A letter to the applicants from Debra Chatman dated November 20, 2007 indicates that the

applicants are eligible to receive repair funds from Community Redevelopment Associates

(CRA) to provide housing repair assistance in an amount not to exceed $30,000.00 (Exhibit

65). Kessler has been informed that CRA works with the City of Deerfield Beach and Broward

County to distribute HOME funds.

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An undated Specification for Work was prepared on the property by William LaMarr Ruffin,

prior to the bid being sent the prospective contractors. William LaMarr Ruffin estimated that

$49,561.00 would be necessary to repair the property (Exhibit 66). The project had a bid due

date of June 20, 2008 @ 4:00PM with the bids being hand delivered to CRA.

Only one bid was contained in the file from ES Cummings Construction in the amount of

$42,000.00, who was awarded the contract (Exhibit 67). The bid summary sheet is enclosed as

Exhibit 68. The bids were James Joyce Construction ($40,900.00), ES Cummings ($42,000.00),

Whyte-Way Construction ($50,090.00) and R&B Remodeling ($51,450.00).

A fax dated June 30, 2008 from Jim Joyce of James Joyce Construction, Corp. indicated, item

#4 is a wrong entry and should have been $9,600. Please accept this fax to withdraw my bid of

$40,900 on the above address. (Exhibit 69). James Joyce Construction was the lowest bidder

according to a bid summary sheet prepared by Program Specialist Dev Brown. It is unclear why

James Joyce Construction was allowed to withdraw his bid after the closing, but he did and the

bid was awarded to ES Cummings Construction by CRA.

A fax dated July 3, 2008 from the Community Redevelopment Associates of Florida, Inc.

indicates that the contractor (ES Cummings Construction, Co.) had been selected and that his

original bid of $42,000.00 was modified to $40,050.00 due to the exclusion of certain bid items

based upon a change of the specifications on June 13, 2008 by William LaMarr Ruffin.

A July 21, 2008 memorandum to Jerry Ferguson from Debra Chatman, indicates that ES

Cummings Construction was the low bidder and that $11,968.65 will be awarded from SHIP

funds and $28,150.00 from HOME Partnership funds (Exhibit 70). A resolution was signed by

Albert Capellini on August 5, 2008 and number 2008/165 ($11,968.65) to provide SHIP funds

for the repair to the dwelling.

The ES Cummings Construction CRA Contract was dated July 7, 2008 and signed by the

contractors and homeowners on July 18, 2008.

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A Notice to Proceed statement from the City of Deerfield Beach was dated August 19, 2008 and

signed by the parties on August 21, 2008 indicating that, Permits must be obtained and work

shall be completed within fifteen (15) days (by September 21, 2008) or be subject to liquidated

damages as set forth in Paragraph 2(a) of this documents. The document also indicated three

sub-contractors will be used including Atlantis A/C and Heating, Vicon Electric and Paul A.

Jackson (Exhibit 71).

A review of the documentation in the file indicates that four payments were made to the

contractor from SHIP funds. An invoice dated August 11, 2008 from the contractor bills the City

for $1,150.00 for a range hood ($250.00) and a refrigerator ($900.00). This amount is paid by

the City on August 14, 2008 along with another invoice from the contractor in amount of

$872.47. The invoice dated August 11, 2008 from the contractor bills the City for $872.47 for

Item #7 range hood upgrade ($150.00) and 30 electric range ($722.47) (Exhibit 72).

An invoice dated September 22, 2008 bills the contractor for front impact door ($850.00),

exterior doors ($2,100.00), paint exterior ($3,500.00), patch and paint kitchen ($500.00), kitchen,

sink, etc ($600.00), shower pan/enclosure ($3,000.00) for a total of $10,550.00. An item noted as

main bath leak ($200.00) was lined out on the bill and was not included in the total. Another

invoice dated September 22, 2008 with the words, Change Order written on it by hand, bills

the City for replacing 14 window sills ($500.00). The actual change order is signed by all parties

on September 23, 2008 (Exhibit 73).

An invoice dated January 15, 2009 labeled as Change order Replace fans and boxes

($760.00) and an invoice labeled Invoice #225 Amount of Retainage withheld ($1,055.00) is

presented to the City and approved by Gerald R Ferguson on January 26, 2009. The change

order was approved by the owner and contractor on January 16, 2009 and by Debra Chatman on

January 26, 2009 (Exhibit 74).

A City of Deerfield Beach Request for Payment was signed by the contractor on March 17, 2009,

signed by one of the two applicants and is undated and signed by Debra Chatman on March 18,

2008 and Peter Parkin on March 25, 2008. There are no documents in the file indicating why this

45

charge was paid from SHIP funds. A payment is made by the City without an invoice on March

27, 2009. It represents a Change Order to the contract applicable to HOME funds and not SHIP.

The change order is on Community Redevelopment letterhead and originally had the typed

words Change Order #1. The number one has been changed in handwriting to the number two.

The change order is for, Furnish and install circuit and conduit for new range outlet. The one

that is there has only 3 wires in a halh (sic) pipe and needs to be upgraded to at least conduit

with 4 -6thhn (sic) wire. Remove all 4 paddle fans, put proper braces, use fan boxes and re-

install (Exhibit 75).

Included in the file was a $28,150.00 invoice applicable to the expenditure of Home funds which

included cleanup ($500.00), replace exterior windows with impact single hung windows

($6,700.00), Kitchen- Replace cabinets and countertop ($5,500.00), Main Bath- Install sink,

fixture and vanity ($700.00), Master bathroom- Repair wall behind toilet ($500.00), Northeast

Bedroom Install ceiling fan with light ($250.00), Electrical upgrade service and panel

($7,000.00), Replacement of central air conditioning split system ($7,000.00) (Exhibit 76).

It is not clear why invoices containing duplicative items that were billed and paid to the Home

program were also paid from SHIP funds.

A zero interest mortgage dated July 7, 2008 issued by the Home Consortium Project in the

amount of $29,805.00 is satisfied after five years. A witness to the signature is Debra Chatman

and it is notarized by Suzan Less on July 7, 2008 (Exhibit 77). A Deferred Payment Loan

Agreement (SHIP) was issued on August 21, 2008 in the amount of $22,468.65 and was

modified on February 3, 2009 by Peter Parkin in the amount of $26,471.22. It is unclear how the

amount of the SHIP mortgage was calculated (Exhibit 78). A Home Repair Program Deferred

Payment Loan Agreement (SHIP / CDBG) zero interest loan dated February 3, 2009 indicates

that a $16,591.05 loan shall depreciate over a period of five years at a 20% (or 1/5th) per year

(Exhibit 79).

Also contained in the file is a City of Deerfield Beach Building Department Violation Notice

dated October 21, 2008 that indicates various electrical violations. The specifics of the violation

46

include, 1. All four paddle fans need replace and boxes installed. (Paddle fan broke in hall

plaster sprayed on them), 2. Painted receptacles must be replaced, 3. Install #8 AWG to range

receptacles, 4. See #2 revised all painted receptacles and switches in house must be painted (sic),

5. Install light in the access (Exhibit 80).

A final inspection was conducted on January 19, 2009 by William LaMarr Ruffin and found

several faulty items with the quality of work conducted, and certain items within the scope of

work, and that change orders werent even completed. No resolutions to these open items were

contained in the file (Exhibit 81).

47

Stephanie Thomas

229 SW 2nd Court

Deerfield Beach, Fl 33441

(Background/Disbursements - Exhibit 82)

File processed by City of Deerfield Beach with assistance from Westside Deerfield Businessmen

Association, Inc.

This file indicates that the a