internal control review of the office of housing and urban improvement
TRANSCRIPT
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45 Rockefeller Plaza, Suite 2000, New York, NY 10111-2000
Phone: (212) 286-9100 | Fax: (212) 730-2433 | www.investigation.com
Internal Control Review
of the Office of Housing and
Urban Improvement
Prepared For
Mr. Dennis Beach, City Manager
City of Pompano Beach
100 West Atlanc Boulevard
Fourth FloorPompano Beach, FL 33060
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RESTRICTED USE WARNING
Kessler International prepared this report at the request of the client to whom it is
furnished. The client agrees that reports and information received from Kessler
International are strictly confidential and are intended solely for the private and exclusive
use of the client. Any other use and any communication, publication or reproduction of
the report or any portion of its contents without written consent of Kessler International is
strictly forbidden. The client agrees to indemnify and holds harmless Kessler
International against any damages or claims resulting from such unauthorized use.
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TABLE OF CONTENTS
BACKGROUND ............................................................................................................... 3INTRODUCTION ............................................................................................................ 4SCOPE, OBJECTIVES AND METHODOLOGY ........................................................ 6DOCUMENTS REVIEWED ........................................................................................... 7PROGRAMS REVIEWED .............................................................................................. 9GENERAL FINDINGS .................................................................................................. 12BLANCHE ELY SCHOLARSHIP ............................................................................... 16JENNIFER JOHNSON .................................................................................................. 17DARRYL SIMPSON ...................................................................................................... 18
ERNESTINE PRICE ...................................................................................................... 21DEBRA CHATMAN ...................................................................................................... 22ALEX MEDINA .............................................................................................................. 25REVIEW/ANALYSIS OF CASES ................................................................................ 29
George & Regina Heck ............................................................................................. 29Gwen Ivory ................................................................................................................ 34Ernestine Price .......................................................................................................... 38Annie C. Hunt ........................................................................................................... 43Jeanette & Charles Innocent ................................................................................... 49Carolyn Rhone .......................................................................................................... 51Jeffrey B. Bosket Jr. & Tanzania T. Bosket ........................................................... 53Ozzie Christopher McLemore ................................................................................. 56Vincent Hogan & Mellenna President .................................................................... 60Khalilah C. Sullivan .................................................................................................. 63Donald S. Jackson Jr. ............................................................................................... 67Ronald McDonald ..................................................................................................... 72Curtis E. Daniels ....................................................................................................... 75Katie L. Wiggins ....................................................................................................... 79Lillian Cooper ........................................................................................................... 85
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Lajuana Johnson ....................................................................................................... 89Florence C. Joseph.................................................................................................... 92
REVIEW / ANALYSIS OF SUB-GRANTEES ............................................................ 94Small Biz Community and Economic Development Corp. ................................... 94New Horizon Community Development Corporation, Inc. ................................ 107Center for Independent Living of Broward, Inc. 2007/08 ................................... 112Center for Independent Living of Broward, Inc. 2008/09 ................................... 120E. Pat Larkins Community Center ....................................................................... 122International Enterprise Development, Inc.......................................................... 125The Eternal Guiding Light Faith Ministries & Community Development
Corporation, Inc. ..................................................................................................... 129Collier City Pompano Beach Community Development Center, Inc. ............... 136Eta Nu Education Foundation ............................................................................... 141
ORTANIQUE PROJECT ............................................................................................ 149Background ............................................................................................................. 149Review of Documents / Findings ............................................................................ 164Internal Audit Department Status Report on Ortanique Project ................... 180
INDEX ............................................................................................................................ 183
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BACKGROUND
Kessler International (Kessler) was retained by the City of Pompano Beach (City) to
conduct an internal control review of the programs and activities administered by theOffice of Housing and Urban Improvement (OHUI).
The City, through the OHUI, administers grants and loans to individuals, families and
non-profit organizations utilizing State and Federal funds. The primary objective
according to OHUIs website is to, assist in the development and redevelopment of a
viable community which provides affordable housing, economic opportunity, and a safe
living environment. Programs administered by OHUI to achieve these objectives
include rehabilitation repairs, first time homebuyers assistance, and barrier removal
programs for the elderly, handicapped and disabled residents of Pompano Beach.
Kesslers objective was to conduct a review of sample case files to verify that the
application processes and awarding of grants and/or loans were in compliance with
proper guidelines.
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INTRODUCTION
Kesslers internal control review of OHUI for the period 2005 to current resulted in the
identification of weaknesses stemming from previous failures to adhere to and disregardof regulations and requirements, as set forth in contracts and policies. This may have
undermined the effectiveness and viability of potentially beneficial programs.
It should be noted that the manner in which OHUI previously retained records regarding
the administration of State and Federal monies hampered Kesslers ability to conduct a
thorough audit. Case files were presented to Kessler in a disorganized and careless
condition, offering a time-consuming hindrance of hundreds of files that were outside the
scope of the audit.
The Kessler internal control review disclosed favoritism towards certain recipients of
State and Federal grants/loans. The utilization of the Community Development Advisory
Committee for approval and recommended disbursements of Federal and State funds
appeared to exhibit nonobjective expenditures many of the recipients of the funds were
linked to members of the Community Development Advisory Committee. Consequently,
what was uncovered during this audit indicates that State and Federal monies were
handled carelessly and haphazardly.
Kesslers internal control review also exposed a lack of adequate documentation on file at
the OHUI pertaining to disbursements for many of the non-profit organizations. Over the
course of the audit, it became apparent that former personnel either did not have
sufficient training in recognizing suspicious expenditures or simply approved fraudulent
applications, resulting in detrimental effects to the OHUI department of the City and its
reputation.
Kessler recommends that OHUI institute an Anti-Fraud and Code of Ethics Policy as well
as a program to teach OHUI personnel the red flags of fraud. In addition, lines of
communication between OHUI and Building Department personnel should be
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strengthened to allow for a robust and well-maintained system of checks and balances
between the departments. Finally, a fraud and mismanagement reporting system should
be established, similar to Kesslers Fraudbusters Tip reporting service, so that
employees and taxpayers can anonymously report instances of fraud and mismanagement
in these programs.
Kessler recommends that this report be referred to the U.S. Department of Housing and
Urban Development Inspector General and Broward County Sherriffs Office so that the
findings can be further investigated. If criminal acts are proven, the individuals
responsible can be brought to justice. Additionally the City should consider the
implementation of a debar list for vendors.
The statements made in The Kessler Report pertaining to the improvement of managerial
practices, as well as other conclusions and recommendations, represent the opinions of
only Kessler. Decisions to take corrective action must be made by the appropriate City
Officials.
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SCOPE, OBJECTIVES AND METHODOLOGY
Kesslers internal control review included an evaluation of the State and Federal
guidelines applicable to the distribution of grant and loan funds as administered by OHUIfor the period 2005 to present. The review also encompassed a sampling of case files, as
well as areas of concern as identified by employees of the City. An extensive number of
other files and documents relevant to this internal control review and affiliated entities
were also examined.
Kessler conducted interviews and engaged in discussions with employees of OHUI, the
Community Redevelopment Agency, the City Manager, the City Attorney, and
employees within other City agencies. Kessler also contacted and spoke with vendors and
contractors, as well as state and federal agencies.
The files reviewed included cases from the following programs:
Community Block Development Grant (CBDG) Program HOME Program State Housing Initiatives Partnership (SHIP) Program Ortanique Estates First Time Homebuyers (FTHB) Program
Additionally, Kessler requested and reviewed financial documents and other information
relative to certain non-profit entities that were the recipients of grants.
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Sub-Grantees Case Files Reviewedo Bethel CDC FY 04/05o Broward Childrens Center FY 06/07o Small Biz Community & Economic Development Corp FY 09/10o Eternal Guiding Light Inc. (Kidz-N-the-Hood) FY 06/07o Eta Nu Education Foundation FY 09/10o Small Biz Community & Economic Development Corp. Job Creation FY
09/10
o Center for Independent Living FY 08/09o International Enterprise Development FY 06/07o Hawkins Homes Inc.o Hawkins Homes Valencia Estates (Ortanique)o S.W.I.M.S. Foundation FY 06/07o Eta Nu Foundation FY 09/10o Boys & Girls Club FY 06/07o New Horizon CDC Skills and Academic FY 07/08o New Horizon CDC Brass Villao NW Pompano Beach Microenterprise Programo
Valencia Estates Projecto Center for Independent Living FY 06/07o Collier City CDC the Aquaculture & Hydroponics Complex Training
Component FY 09/10
o Center for Independent Living FY 04/05o E. Pat Larkins Senior Citizen Program FY 08/09
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PROGRAMS REVIEWED
Kesslers internal control review encompassed a comprehensive examination of the
programs administered by OHUI including:
State Housing Initiatives Partnership (SHIP)
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 contained copies of Federal Tax Returns. This is
a serious weakness of the programs execution and allows the applicant to easily modify
their income to qualify for assistance.
The SHIP Local Housing Assistance Plans for fiscal years 2005/06, 2006/07, 2007/08
and 2008/09 were not made available to Kessler for review. However, Kessler was able
to obtain from the Florida Housing website the SHIP Local Housing Assistance Plan
(LHAP) for fiscal years 2009/10, 2010/11 and 2011/12 for Pompano Beach. The SHIP
LHAP plans for fiscal years 2009/10, 2010/11 and 2011/12 states the purpose of the
program as (Exhibit 1):
Creation of the plan is for 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.
A. Residential Rehabilitation Owner Occupieda) Summary of Strategy: SHIP funds will be used to assist with repairs of
owner-occupied homes. The funds will be used to correct some or all
minimum housing code violations and incipient defects to their property.
b) Fiscal Years Covered 2009/10, 2010/11, 2011/12Income Categories to be served: This strategy will assist applicants who
fall below 80% on the area median income.
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c) Maximum award as noted on the Housing Delivery Goals Charts:$60,000.00
B. First Time Homebuyera) Summary of Strategy: This assistance is for very low, low and moderate
income households of the City who wish to purchase an existing or new
construction home within the City limits of Pompano Beach.
b) Fiscal Year Covered 2009/10, 2010/11, 2011/12c) Income Categories to be served: This strategy will assist very low, low
and moderate applicants.
d) Maximum award as noted on the Housing Delivery Goals Charts:$40,000.00
C. Disaster Relief: Mitigation/Recoverya) Summary of Strategy: This strategy will provide for events of natural and
locally or federally declared disasters. SHIP funds will be used to provide
emergency repairs to income eligible households in the aftermath of a
natural disaster to address emergency housing repair needs.
b) Fiscal Year Covered 2009/10, 2010/11, 2011/12c) Income Categories to be served: This strategy will assist owner-occupant
families of very low, low and moderate income persons or households
d) Maximum award as noted on the Housing Delivery Goals Charts:$30,000.00
Additionally, a document entitled Basic General Specifications & Conditions for the
Rehabilitation of Property in the City of Pompano Beach was secured and reviewed.
With regards to bids, page ten of this document states, In cases of only one bid, the bid
will be returned unopened and the job re-advertised for bids (Exhibit 2).
All of the mortgages reviewed by Kessler and issued by the City or Pompano Beach
Community Redevelopment Agency (Pompano Beach CRA) were observed to be
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Deferred Payment Mortgage Agreements, where the grants provided by these entities do
not have to be repaid by the recipients.
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GENERAL FINDINGS
Waiting List
Kessler observed that the City failed to maintain a waiting list for residents who applied
for State and Federal assistance during the course of the internal control review.
According to the U.S. Department of Housing and Urban Development (HUD)
website, If the Public Housing Agency (PHA) determines that your family is eligible,
the PHA will put your name on a waiting list, unless it is able to assist you immediately.
Once your name is reached on the waiting list, the PHA will contact you and issue to you
a housing voucher. With the City failing to maintain a waiting list, deserving
individuals/families may not have received the assistance they needed.
Simpson Developers Inc.
It should be noted that Simpson Developers Inc. was the sole contractor for the
Ortanique Estates of Pompano Beach project. Darryl Simpson (Simpson) was
employed by OHUI as a Housing Inspector during the period of 6/1/2000 through
5/25/2003. Simpson is listed as the Registered Agent and President of Simpson
Developers Inc. A Written Reprimand in his personnel file states that on two occasions
Simpson conducted private business activity on City time. Simpson was accused ofbeing in violation of Administrative Policy Standard of Employee Behavior 107.16 and
Florida State Statutes Chapter 112.313 Conflict of Interest (Exhibit 1).
Community Development Advisory Committee
Kessler reviewed the individuals listed as members of the Community Development
Advisory Committee (CDAC). Kessler was provided a list of the CDAC members
from the period of 2005 through 2007 including the following individuals(Exhibit 2):
A. Grace Edwards Jean McPhail Flom Valerie Smith Francis Fluerant Ernestine Price
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not provided to support the income certifications, allowing an applicant to easily falsify
information and receive additional assistance. In rehabilitation projects, only a single bid
was typically documented in the case file.
Documentation Requested from Third Parties
Kessler has requested that documents be provided from the following parties:
Center for Independent Living of Broward, Inc.,
Sun Band Builders Construction, Inc.
Kessler requested from Bob Davis, Director for the Center for Independent Living of
Broward, Inc. that the case files for the year 2006/2007 be provided. As of the date of
this report, Kessler has not received any response from Bob Davis in regards to this
request.
Additionally, a verbal request was made to Daniel Morgan of Sun Band Builders
Construction, Inc. to supply additional documentation in regards to the rehabilitation
conducted on the property owned by Katie Wiggins. Daniel Morgan indicated that the
City has all of his documents, and denied our request to provide copies of these
documents.
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BLANCHE ELY SCHOLARSHIP
The scholarship program was established in 1994 for High School Seniors of Pompano
Beach seeking to continue their education at a Florida College or University. Kessler
reviewed the Blanche Ely Scholarship Administrative Guidelines to achieve an
understanding of the steps involved in the scholarship program (Exhibit 1). Kessler was
informed that literature is disseminated to all potential applicants in the designated area.
When attempting to review applicable scholarship documents, Kessler was informed that
the boxes requiring review were missing. Miriam Carrillo (Carrillo), Interim Director
OHUI explained that there were three boxes known to contain important scholarship
information which someone had removed from storage. Carrillo further indicated that
she had searched for the boxes in other possible locations and was unsuccessful in finding
them. Carrillo then contacted the Browards Sheriffs Office in order to file a police
report for the missing documentation. The police report was filed on 7/19/2010 and has
since been classified as theft (Exhibit 2).
Kessler was able to review a portion of scholarship program documents, but important
records regarding the misappropriation of funds were encompassed by the
aforementioned police report. Jennifer Johnson, Office Assistant II, was reprimanded on7/16/2009 for awarding scholarships to two candidates who were reviewed and refused
by the Scholarship Committee. Additionally, two other candidates were awarded
scholarships who never submitted applications and were therefore not subject to review
by the Scholarship Committee (Exhibit 3).
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DARRYL SIMPSON
The OHUI employed Darryl Simpson as a Housing Inspector during the period of
6/1/2000 through 5/25/2003. Darryl G. Simpson is currently the Registered Agent and
President of Simpson Developers, Inc., while Gail N. Simpson is listed as the Vice
President. Simpson Developers, Inc. was the general contractor for the construction of
the homes in the Ortanique Estates of Pompano Beach (Exhibit 1).
A 3/12/2001 letter from Simpson Developers (owned by Darryl Simpson) to the City
states, THIS LETTER IS TO INFORM THE CITY OF POMPANO BEACH PENDING
AN EFFECTIVE DATE, SIMPSON DEVELOPERS WILL NOT BE ENGAGED IN
PROJECTS THAT REQURIE PERMITTING IN THE CITY OF POMPANO BEACH.
EXCLUDING PERMITS TO PERSONAL PROPERTY. THIS AGREEMENT IS
SOLELY IN PLACE AS A PRECAUTIOANRY MEASURE WHILE DARRYL
SIMPSON IS EMPLOYED AS COMMUNITY DEVELOPMENT INSPECTOR AT
THE CITY OF POMPANO BEACH. (Exhibit 2).
Additionally, on 1/18/2002 T.C. Broadnax (Deputy City Manager) sent an Order of
Disciplinary Action Written Reprimand to Darryl Simpson. The Written Reprimand
indicates that relevant to the 3/21/2001 letter, three properties (2811 NW 3rdStreet, 301
NW 16thStreet and 1535 NW 4thAvenue) would not be affected by the 1/18/2002 letter.
T.C. Broadnax states that on two occasions Darryl Simpson has conducted private
business activity on City time and alleged forgery. Darryl Simpson was accused of
being in violation of Administrative Policy Standard of Employee Behavior 107.16 and
Florida State Statutes Chapter 112.313 Conflict of Interest. The course of disciplinary
action asserts Darryl Simpson is prohibited from conducting private business activity
during normal City Business hours and that the alleged forgery will be investigated by theproper authorities (Exhibit 3).
Darryl Simpson replied to the allegations on 1/18/2002 stating, In response to your
Memorandum Order of Disciplinary Action dated January 18, 2002, I hereby state the
allegations implied are untrue and without merit or documentation (Exhibit 4). Darryl
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Simpson also provided detailed accounts of what transpired on the alleged dates
(10/29/2001 and 11/15/2001) regarding the private business activity in support of his
1/18/2002 response (Exhibit 5).
On 6/10/2002 a letter was written from Michael Smith, Human Resources Director to TC
Broadnax, regarding Complaints by Darryl Simpson (sic) (Exhibit 6). Mike Smith only
focused on the allegations of Darryl Simpson and stated, I do not find any evidence to
support his claim that he is being treated in a disparate manner. The letter also indicates
that Darryl Simpson submitted a letter dated 2/11/2002 which recants the 3/12/2001
letter, agreeing not to conduct work necessitating permitting by the City. Mike Smith
states, In his new letter he modifies significantly the 03-12-01 language to state he will
permit projects which are solely in the vested interest of Simpson Developers (Meaning
unclear) and may participate as a consultant in additional projects in Pompano Beach
outside of normal business hours. This language appears to conflict with your
prohibitions (as stated in the January 18, 2002 disciplinary memorandum) against his
involvement in ANYproject that requires issuance of a City of Pompano Beach building
permit, excluding his personal residences and community development division
projects. He continues to indicate,
I also noted in the interview with Building division staff and Darryl that there
seems to be little or no communication between building and community
development in the early stages of project planning which often results in change
orders being necessary due to avoidable building code issues which come up
when plans are submitted for building permit application and after the projects
have been designed and contractor agreements have been executed. This also
creates delays and frustration for homeowners, and general ill will between the
two divisions. I would recommend that some sort of partnership or collaboration
initiative is implemented to coordinate the technical expertise that exists in both
divisions. I offer my services as a facilitator if both departments are willing to
seek solutions.
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An Investigative Action Report was submitted by Detective D. Howell of the Sheriffs
Office of Broward County on 4/29/2003 for an alleged offense of forgery by Darryl
Simpson. The allegations as stated by Detective D. Howell are,
Further investigation by the city revealed that although unethical Donald Mowry
had allowed Darryl Simpson to make several minor changes on one job in the
past. This was because Donald Mowry was out of town and Darryl Simpson did
this to save time. These initialed changes were compared to the ones now in
question. It appeared that the initials were the same on the plans now being
looked over by the Building Department. These were given to this Detective to
follow up of possible forgery charges. As Donald Mowry was the actual victim
since his name was or initials had been forged. I attempted to contact Mr. Mowry
for a statement in this case. Upon contacting Donald Mowrys firm I was advised
by his son that he has passed away. Due to these circumstances there was
nowhere to go with this case, as there was no real victim[emphasis added].
Contact was made with Darryl Simpson and he came in to the district office and
spoke with me freely. Darryl Simpson denied any wrong doing in this case.
Detective D. Howell submitted a case summary which indicates, This case is false and
baseless as reported, as there is no victim. The case was reported without the knowledge
of the reported victim in this case. When this Detective tried to interview the
witness/victim Donald Mowry it was learned that he had passed away. Due to these
circumstances this case is unfounded. (Exhibit 7). Kessler is of the opinion that this
case was not adequaltely investigated by Detective Howell and that other violations
should have been investigated.
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ERNESTINE PRICE
Ernestine Price is a member of the CDAC which reviews and votes on the disbursement
of CDBG, SHIP and HOME funds from the OHUI, including Emergency Repair
Programs, Public Services, Economic Development, Rehabilitations, First Time Home
Buyers and Scholarship recipients.
Ernestine Price voted in the 5/10/2007 meeting of the CDAC to approve funding to be
provided to the Center for Independent Living of Broward, Inc. from the barrier-free
removal program. Center for Independent Living of Broward, Inc. was provided a check
in the amount of $39,807.00 on 9/19/2007 from the City for the barrier-free removal
program conducted on the property owned by Ernestine Price. The conduct of ErnestinePrice to vote for approval of funding to Center for Independent Living of Broward, Inc. is
an apparent conflict of interest.
Additionally, as an officer/director of the Changing Direction 4 Youth & Families, Inc.,
Ernestine Price did not remove herself from voting in the 6/10/2009 meeting on the
Public Services programs to allocate funds to Changing Directions 4 Youth & Families,
Inc.
Changing Direction 4 Youth & Families, Inc. was ultimately awarded $40,000.00 of
which $39,162.14 has been administered. Kessler has requested that the OHUI supply
this case file for review. The OHUI has stated that this case file cant be located.
Ernestine Price voting to approve funding to a corporation in which she is listed as an
officer/director again appears to be a conflict of interest.
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of violation does not appear to coincide with the scope of work for this permit. No other
relevant information is contained on the Notice of Violation.
Permit #00120166
It should be noted that no permit application was contained in the documents secured. A
Building / Engineer Permit Invoice dated 2/14/2002 indicates that permits were issued for
structural min fee; window shutters; electrical minimum; fire-single family res; and
plumbing fixture appliance. The total fees associated with the permit #00120166 are
$305.35 (Exhibit 6).
Inspection work logs were also contained in the file for permit number 00120166, all of
which differ greatly from the permit application which indicates that it was for a low
voltage electrical burglar alarm. These changes include: replacement of 10 windows;
building slab (assumed to be a patio); columns/poured cells; plumbing rough; dry wall;
building sewer connection and plumbing inspection other. No resolutions to the open
items (other plumbing inspection, plumbing rough and columns/poured cells) were
contained in the documents provided (Exhibit 7).
An illegible Notice of Violation for Chatman was issued in 2001, for re-inspection. No
other information was discernible due to the quality of the copy (Exhibit 8).
Permit #01040209
A Mechanical Permit was submitted by the contractor, Controlled Environment Systems,
Inc. on 4/30/2001 for replacement of an existing 3 ton air conditioning unit. The
estimated value of the project is $2,300.00. The document is unsigned by the home
owner but is signed by Sebastian S. Sequenzia on 4/30/2001. It appears that the same
date the application was submitted (4/30/2001), the work was approved (4/30/2001)
(Exhibit 9).
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Permit #05080201
On 8/19/2005, Chatman submitted a Building Permit for replacement of 3 living room
windows, and the front entry door. The contractor is listed as the owner and the
estimated value of the work to be conducted is $825.00. The Plan was reviewed by Sean
Flanagan and approved on 8/23/2005. The work was approved on 11/9/2005 and the
owner paid for fees on 8/19/2005 ($25.00) and 12/12/05 ($30.35), totaling $55.35
(Exhibit 10).
Permit #06060491/06060492
A Building Permit (#06060491) was submitted by Chatman on 6/22/2006 for
extending/installing, front porch between existing driveway + existing porch area. The
estimated value of the paving is $150.00. No contractor is indicated on the permit
application. The zoning was approved on 6/28/2006 and the structural was approved on
7/2/2006 (Exhibit 11).
Another permit (#06060492) was submitted on 6/22/2006 for extending walkway / porch
which was approved by the City of Lauderhill on 6/28/2006 (Exhibit 12). No contractor
is indicated on the permit application. The final inspection was conducted and approved
on 4/9/2007 (Exhibit 13).
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ALEX MEDINA
Kessler International recently became aware of the dismissal of Dr. Alex Medina
(Medina), former Administrative Coordinator to the OHUI. It was relayed that this
dismissal stemmed from allegations that Medina allegedly deleted documents from his
computer and for other acts of misconduct.
Kessler met with Medina on July 6, 2010 before his discharge at the Pompano Beach City
Hall. At this meeting, Medina introduced himself as he transferred numerous boxes of
documents from the Copans Road Storage facility with Orlando Nightengale. Medina
stated that he would be more than happy to assist in retrieving additional records as
needed.
Throughout the audit Medina entered the conference room that Kessler was working in
without notice and unannounced to discuss things unrelated to the internal control review
being conducted.
Medina spoke candidly about why T.C. Bordeaux and Debra Chatman left the department
and stated that T.C. left the City to go to San Antonio because he was offered a better job
and Chatman started questioning about how people are picked from a waiting list.
Additionally, Medina indicated that the Valencia and Ortanique Projects are the same
project and that Simpson was the contractor/builder for the project. Medina stated that
Simpsons finances for these projects seemed illogical because Simpson had a line of
credit with Bank Atlantic, but took out construction loans on each individual property.
Medina also stated that there were several complaints filed against Simpsons
workmenship. Some of the examples Medina gave included corners not level in the
homes he built, the garages could not fit the owners cars, leaks, and some properties
were built on a slant. Medina provided information that Simpson Developers took out
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construction loans with Bank Atlantic, so buyers did not really have a choice and that he
felt something was astray with the relationship.
Medina provided information that citizens have a sense of entitlement in the NW
district. He also said that certain owners who received assistance may be renting out
their homes after receiving funding from the City, which is in violation of the mortgages
secured from the Pompano Beach CRA and the City.
While discussing Simpson Developers, Medina mentioned that Davis Family
Construction had several projects as well, including Sable Chase and the surrounding
homes, and questioned how the homes were considered built for low income families
due to DFCs prices were way too high.
Kessler posed questions to Medina regarding the disbursements made for the Eta Nu sub-
grantee. Numerous receipts were located in the case file but no documentation was
provided that would allow reconciliation to the disbursements, as the amounts on the
receipts were well in excess of the amount of the disbursements. Medina indicated that
he determined what expenses were allowable. After further questioning Medina indicated
that he did not have any reconciliation sheet detailing the expenses that were allowed and
that he did not thoroughly review the payment applications.
In a strange comment during conservation, Medina blurted out that if you say you are a
Federal Agent and you are not, the Feds get mad.
In the process of Kesslers in-field internal control review Kessler requested that the
documents pertaining to the scholarship be provided for our review. Medina indicated
that these files were located in a filing cabinet located in the OHUI office space. Kessler
observed that some documents applicable to the Scholarship program was contained in
the filing cabinet, but important documentation regarding the approval process and the
applicants that were approved for scholarships were missing.
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During Kesslers review of the Small Biz Community & Economic Development Corp.
(Small Biz), questions were posed to Medina regarding the disbursements made to this
sub-grantee. Medina indicated that he personally helped Mary Phillips (Phillips)
(officer of the sub-grantee) load chairs into his car that were purchased by the City and
delivered the chairs to 160 N. Powerline Road, Pompano Beach, FL 33069, the location
of the sub-grantee Small Biz. Medina also stated Phillips received 10 computers under
the grant. Kessler did not observe the documents indicating the purchase of these
computers in the case file. Additional research was conducted and it was concluded that
these computers were purchased by the City and not recorded as a reduction to the grant
allocated to Small Biz.
Medina also indicated that he was friendly with Daniel Morgan (Morgan) of Sun Band
Builders Construction, Inc. (Sun Band Builders), when he heard we had made a request
for documentation regarding the rehabilitation conducted on the property owned by Katie
Wiggins and that he was unresponsive to our request.
The next day Medina brought both Morgan of Sun Band Builders and Phillips of Small
Biz to visit Kessler in the conference room. Kessler at no point in time had requested that
Morgan and/or Phillips be brought in to have meeting.
Since Morgan was present we attempted to question him regarding the rehabilitation
project conducted on the property owned by Katie Wiggins, Morgan laughed throughout
the entire questioning and refused to give any explanations answered every with the
phrase the city should have everything. In fact Morgan never specifically spoke to
Kessler and would only speak to Medina, even though all parties were present in the
same room. When asked for an explanation of non-descriptive invoices issued by Sun
Band Builders, he laughed and refused to elaborate.
At the same time Medina also introduced Phillips of Small Biz. Questions were posed to
Phillips regarding the purchase of chairs and computers for the benefit of Small Biz.
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REVIEW/ANALYSIS OF CASES
George & Regina Heck
621 NW 19th
Avenue
Pompano Beach, FL 33069(Background / Disbursements Exhibit 1)
The applicant was a recipient of the Ortanique Project.
It should be noted that both of the applicants are employees of the City.
The Infill Housing (New Construction) Homebuyers Purchase Assistance Application is
date stamped as received on 2/12/2008 and dated and signed by the buyer on 8/13/2008
and by the co-buyer on 2/8/2008. A Witness to the buyers signature is dated 2/13/08 and
has been changed to 8/13/08 (Exhibit 2).
The applicants income verification was signed and dated by Jennifer Johnson, Office
Assistant II, on 8/8/08. The record indicates a combined income of $76,535.28 for the
applicants (Moderate Income) and $1,436.76 in assets held. Kessler calculated that in
actuality $1,454.76 in assets was held by the applicants, a difference of $18.00 (Exhibit
3) (Original document detailing income was observed during the in-field review,
however copies provided by the City did not include this information .)
The verification of assets on deposit at Washington Mutual is signed and dated by the
applicant on 8/ (A complete date is not cited on the document). The document was
completed on 8/07/2008 by a representative of Washington Mutual and date stamped on
08-07-08 P04:21 IN. It is unclear why the applicant would sign and date the
verification of assets on deposit for Washington Mutual prior to signing the Infill
Housing (New Construction) Homebuyers Purchase Assistance Application (Exhibit 4).
A Construction Agreement between Gregory George and Regina Heck (the name
Gregory is crossed out with pen and the name George is handwritten on the document)
and Simpson Developers, Inc. dated 4/21/2008 states the base price for the Tangelo
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Model is $182,437.00. The agreement is signed by the Homeowner George and
Regina Heck, but is undated (Exhibit 5).
The Ortanique Estates of Pompano Beach Contract for Purchase and Sale is signed by the
purchasers and the seller (Pompano Beach CEHDA, Inc.), but is undated and does not
have a witness to the contract. The sales price of the home is $182,437.00. In the
Contract for Purchase and Sale, the following items were not included: Brochure and
Feature List (Exhibit A), Site Plan (Exhibit B) and Builders Warranty (Exhibit F).
Additionally, the Escrow Agreement and the Addendum to Sales Contract are both
undated (Exhibit 6).
A Uniform Residential Appraisal Report was conducted by Dale Berman & Associates
on 6/2/2008. The report indicates the borrower as George & Regina Heck and the owner
of public record as Pompano Beach CEHDA. The report continues to state, This is a
CEHDA loan, the buyer only pays for the improvements, the corporation pays for the
land. The owner may purchase land later. See contract for details. The contract price is
listed as $182,437 and the contract date is 5/2/2008. The appraisal indicates that utilizing
the Sales Comparison Approach, the value of the property is $245,000.00. Additionally,
utilizing the Cost Approach (if developed) the value is $241,210.00 (Exhibit 7).
It is unclear how an applicant can sign a Contract for Purchase and Sale prior to an
income certification being conducted and completed. The Development Agreement
between Pompano Beach CRA and Pompano Beach CEHDA Inc. indicates that 75% of
the applicants must be low or moderate income; therefore income must be verified before
purchase is approved.
On 8/29/2008, a letter was sent from A. Richard Bowman of the City to SuRealty Title,
Inc. stating, Enclosed please find Check No. 526058 in the amount of $25,000.00
purchase assistance from the City of Pompano Beach for George & Regina Heck, who
have been approved to participate in the City of Pompano Beachs Affordable Housing
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Program for First Time Homebuyers (Exhibit 8). The letter continues to state that,
After closing is complete, please forward the following documents:
Original Executed Settlement Agreement Copy of executed Mortgage Application package from lender Copy of Citys executed unrecorded Mortgage and Note Copy of Property Appraisal Citys original recorded Mortgage and Note
It is unclear why the city would request Citys executed unrecorded Mortgage and Note
and Citys original recorded Mortgage and Note.
A Mortgage Deed between the mortgagor (George A. Heck, Jr. and Regina L. Heck)
and the mortgagee (The City of Pompano Beach) is dated 8/29/2008. This mortgage is
denoted as a second mortgage, inferior to the first mortgage secured by Bank Atlantic,
FSB. The Promissory Note for the mortgage indicates that the sum of the mortgage is
$25,000.00 and is a permanent second mortgage with an interest rate of 0% (Exhibit 9).
Kessler has been advised by the Assistant City Attorney, Fawn Powers, that a permanent
mortgage is recognized as a thirty-year mortgage.
Only page four and five of the Deferred Payment Loan, dated 8/29/2008, between GeorgeA Heck, Jr. and Regina Heck and the Pompano Beach CRA was provided in the case file.
The Promissory Note indicates that the sum of the loan is $48,000.00 and states the
following sections in reference to the recapture amount:
A. For transfer, sale or conveyance of the Property within seven (7) years from theNote date, the full difference between the original, actual purchase price
(including the value of the land) and the re-sale price of the property, up to the
loan amount, less the Owners down payment and any mortgage principal that
may have occurred through payment shall be due and owing.
B. For transfer, sale or conveyance of the Property after eight (8) to thirty (30) yearsfrom the Note date, the recapture amount as calculated in Section A. hereinabove
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reducing at the rate of one percent (1%) for each year lapsed from the Note date
shall be due and owing.
C. After thirty (30) years from the note date, shall all sums due and owing, if any, bepaid, the mortgage principal shall be forgiven.
D. All sums due and owing shall bear interest at the rate of twelve percent (12%) peryear if not paid within thirty (30) days of the transfer, sale or conveyance.
(Exhibit 10).
Two copies of the HUD Settlement Statement, dated 8/29/2008, were contained in the
file, a signed copy by the applicant and a signed copy by Larry Fisher, Chairman of
SuRealty Title, Inc. The HUD Settlement Statement indicates the sale cost of the house
was $182,437.00.
The copy signed by the applicants states that $64.35 is due from the borrower, while the
copy signed by the Chairman of SuRealty Title, Inc. indicates $19.35 due from the
borrowers at closing. The difference is a $45.00 Survey Additional Cost included on
the copy signed by the applicants (Exhibit 11).
The cost of the $48,000.00 mortgage from the Deferred Payment Loan agreement from
the Community Redevelopment Agency was not included in the HUD Settlement
Statement as part of the sales price of the home.
A phone call was placed to the Broward County Property Appraiser to determine how the
valuation of a home is conducted. Kessler was advised by a representative of the
Broward County Property Appraiser that the valuation of a home is determined based
upon previous years sales price of homes in that sub-division, and that the current value
of the property located at 621 NW 19thAvenue, Pompano Beach, FL is $66,160.00.
Valuation of the property is utilized for the calculation of taxes due Broward County and
the City.
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During the time period the homes were sold in the Ortanique Estates of Pompano Beach,
the value of the homes were artificially underestimated in the subdivision, because the
cost of the land provided by the Pompano Beach CRA was not included in the HUD
Settlement Statement. This action effectively reduced the amount of taxes being
collected by Broward County and the City due to the value of the homes being artificially
reduced.
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Gwen Ivory
2001 NW 6th
Place
Pompano Beach, FL 33069
(Background / Disbursements Exhibit 1)
The applicant was a recipient of the Ortanique Project.
The InFill Housing (New Construction) Purchase Assistance Application is date stamped
as received on 11/30/2007. The application indicates that two individuals, Gwen Ivory
and Renesha Walden, are members of the household (Exhibit 2).
The Resident Income Certification is dated 12/13/2006 and indicates that only one
individual is a member of the household (Gwen Ivory). The other individual, Renesha
Walden, an 18-year-old student, is not listed on the Resident Income Certification. The
income for Gwen Ivory is calculated at $22,089.64 (Exhibit 3).
On 12/13/2006, a Fund Availability Notice was sent to Gwen E. Ivory by Judith Harris,
Program Intake Counselor. The notice indicates that, Fund Availability is valid for
one hundred twenty (120) days from the date of issuance and does not imply that you
have been approved to receive assistance through this program (Exhibit 4).
Kessler also noted that three different Certification and Authorizations were allegedly
signed by Gwen Ivory. All of the Certification and Authorizations were undated by said
applicant. One authorization appears to be dated 10/25/2006 by Carolyn Brown, a
witness to the signature and another dated 11/27/2007 and signed with an illegible
signature (Exhibit 5). It is unclear how a Certification and Authorization can be signed
and dated prior to an InFill Housing (New Construction) Purchase Assistance
Application.
Three separate Verification of Employment documents were submitted to the School
Board of Broward County, Florida and completed on 5/3/2007 (Fannie Mae), 5/22/2007
(Abyssinian Community Development Corporation) and 12/6/2007 (City of Pompano
Beach).
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The Fannie Mae Request for Verification of Employment indicates that in 2005
$34,790.58 in wages was paid to Gwen Ivory. Subsequently, in 2006 $29,929.00 in
wages were paid, and in 2007 $14,260.25 in wages were paid through 4/22/2007 (Exhibit
6). These records contradict the calculation cited on Gwen Ivorys Income Certification.
The 5/23/2007 Abyssinian Community Development Corporation verification of
employment denotes that $23,300.00 in salary was paid to the applicant and the
12/6/2007 Verification of Employment sent by the City states $29,929.00 was paid over
the past 12 months (Exhibit 7). No documentation was provided in the case file to
substantiate the calculation on the Income Certification listed as $22,089.64.
Additionally, a salary stub from the School Board of Broward County, Florida was
provided in the case file for the payroll period of 2/26/2007 through 3/11/2007. The pay
stub indicates that $9,272.83 in year-to-date gross income was paid to the applicant and
that the applicants tax status is married (Exhibit 8).
The undated Uniform Underwriting and Transmittal Summary from Bank Atlantic states
the appraised value of the home is $290,000.00 and the sales price of the home is
$165,480.00. The monthly income for the applicant is $3,248.07 ($38,976.84/year) and
combined assets of $9,062.64 (Exhibit 9).
In an undated and unsigned (by the seller) Valencia Estates of Pompano Beach Contract
for Purchase and Sale document, it denotes the purchase price of the Temple Model home
is listed as $165,480.00 and that $1,654.48 was received as an initial deposit (with
handwritten notation AR 4/19/07). No Brochure and Feature List (Exhibit A), Site
Plan (Exhibit B) or Builders Warranty (Exhibit F) were enclosed in the contract for
purchase and sale. The Escrow Agreement, dated 4/19/2007, again is unsigned and
undated by the seller but is initialed by the buyer (Exhibit 10).
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A Cost Analysis, dated 8/30/2006, 1/25/2007 and revised on 4/19/2007, denotes a
construction cost of $148,507.00, overhead and profit of $4,723.00, and a developer fee
of $12,250.00 (Pompano Beach CEHDA) (Exhibit 11).
On 2/22/2008, a letter was sent by A. Richard Bowman, Director of OHUI to Gwen Ivory
indicating that the applicant qualified to receive a maximum of $30,000.00 toward the
purchase of a new home (Exhibit 12).
A 4/17/2008 letter from A. Richard Bowman to SuRealty Title, Inc. states, Enclosed
please find Check No. 519119 in the amount of $30,000.00 purchase assistance from the
City for Gwen Ivory who has been approved to participate in the Citys Affordable
Housing Program for First Time Homebuyers (Exhibit 13). The letter continues to state
that, After closing is complete, please forward the following documents:
Original Executed Settlement Agreement Copy of executed Mortgage Application package from lender Copy of Citys executed unrecorded Mortgage and Note Copy of Property Appraisal Citys original recorded mortgage and note
A Mortgage Deed between the mortgagor (Gwen Ivory) and the mortgagee (The City
of Pompano Beach) is dated 4/18/2008. This mortgage is denoted as a second mortgage,
inferior to the first mortgage secured by Bank Atlantic, FSB. The Promissory Note for
Permanent Second Mortgage Loan indicates that the sum of the mortgage is $30,000.00
and is a permanent second mortgage with an interest rate of 0% (Exhibit 14).
An additional Mortgage Deed, dated 4/18/2008 between Gwen Ivory and the Pompano
Beach CRA indicates that the mortgage is the sixth mortgage in favor of Bank Atlantic.
The Promissory Note indicates that the sum of the loan is $56,000.00 and states a 30 year
recapture period as previously stated in the case file for George & Regina Heck (Exhibit
15).
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Two unsigned copies of the HUD Settlement Statement dated 4/18/2008 were enclosed in
the case file. Differences were observed between the two copies, including the settlement
charges ($14,455.22 vs. $14,733.00) and the principal amount of new loan(s) ($78,275.00
vs. $82,750.00) (Exhibit 16). It should be noted that the HUD Settlement Statement
which indicates the settlement charges of $14,455.22indicates the borrower as Lillian
Cooper, but the address correlates to the property currently owned by Gwen Ivory.
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Ernestine Price
1461 NW 3rd
Way
Pompano Beach, FL 33060
(Background / Disbursements Exhibit 1)
The applicant was a recipient of Emergency Roof Repairs.
Ernestine Price a member of the Community Development Advisory Committee who was
appointed by Commissioner Burrie. No application for an emergency roof repair was
contained in the case file.
It should be noted that on 6/30/1993, the City issued a Quit-Claim Deed transferring
property located at 1461 NW 3rdWay to Ernestine Price from the City (Exhibit 2).
Emergency Roof Repair
A proposal was submitted to Ernestine Price on 3/13/2006 by Flooker Roofing, Inc., d/b/a
F.A. Home Improvement, for shingle roofing in the amount of $12,000.00 which was
signed and dated by Flooker Adams on 3/15/2006 (Exhibit 3).
On 3/20/2006, a notarized Hurricane Emergency Roof Repair Certification Form signed
by Ernestine Price indicates that the applicant does not own the home, there is no
homeowners insurance and an application was submitted to FEMA for funding (Exhibit
4).
The undated income certification lists the source of income for the one person household
as working salary/wages. Conversely, the W-2 for Ernestine Price obtained from a
Broward County Sheriffs Office indicates that the $27,816.64 in wages was received
from a retirement plan (Exhibit 5).
The City Building Permit Application was signed by Ernestine Price on 3/25/2006 and
Flooker Adams on 4/3/2006; the contractor is listed as Flooker Roofing, Inc. The
estimated cost of the roof as shown on the permit is $9,000.00 and the permit application
fee is calculated based upon the anticipated cost of the repairs multiplied at a rate of
2.6%. Including miscellaneous fees, the total fees for the permit comes to $256.15
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(Exhibit 6). This permit was secured after the initial submission of the estimate dated
3/13/2006 and is inconsistent with this estimate.
An inspection note dated 4/19/2006 states, #0535 Renail Sheathing Inspection was
scheduled by the Field inspector on this Date, Not by the Contractor. Renail scheduled
by Inspector, original plywood deck nailed as per code requirements. #0546 Florida
Building Code, Chapter 1, Broward County Amendments; RAS 115; 30N Felt paper is
not run correctly in the valley areas. Shingles applied over paper prior to tin tag being
approved. Shingles not nailed as required. On 4/21/2006 #0546 the inspection for work
conducted on the permit was approved by AP (Exhibit 7).
On 6/16/2006, Flooker Roofing, Inc., d/b/a F.A. Home Improvement sent an invoice to
the City for the cost of the contract ($12,000.00), NOC ($12.50) and Permit Fee
($256.15) for a total cost of $12,268.65. A Cash Payment Requisition was submitted by
Eric A. Johnson on 6/21/2006 and approved by T.C. Broadnax in the amount of
$12,268.65. Check #497052 was written to Flooker Roofing, Inc. on 6/28/2006 for the
amount approved by T.C. Broadnax (Exhibit 8).
No Deferred Payment Loan Agreement was drafted or completed regarding the
emergency roof repairs on this property as required by the City.
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Ernestine Price
1461 NW 3rd
Way
Pompano Beach, FL 33060
The applicant was a recipient of the Barrier Free Removal Program administered by
the Center for Independent Living of Broward, Inc.
Barrier Free Removal
No application for Barrier Free Removal of this property was contained in the case file.
A Resident Income Certification dated 12/1/2006 for the applicant lists four individuals
as members of the household, including three grandchildren. This is in contract to the
application submitted just nine months previous that lists one occupant.The gross
household income is listed at $29,371.60. No supporting documentation was contained
in the file to verify the wages/salaries/public assistance as reported (Exhibit 9).
Only one bid was contained in the case file from Conner Industries, Inc. which was
submitted on 5/24/2006 with a bid estimate cost of $35,995.00. This bid was altered to
add 10% C/L Cost = $3,599.50 for a total cost of $39,594.50. The bid includes plans
to make the master bathroom handicap accessible ($15,110.00); installing a new
bathroom door, lighting, toilet and patch and paint tile floor in the guest bathroom
($2,310.00); installing new kitchen cabinets ($12,200.00); installing grab bars and lever
handle at front entrance ($275.00); a garage entryway ramp, lever handle and shelving
($1,875.00); termite and vermin control ($1,700.00); permits, architectural plans and
debris removal ($2,300.00); and five battery powered smoke detectors (not included as a
bid item, $225.00) for a total cost of $35,995.00 (Exhibit 10).
Numerous items were removed from the original bid submitted by Conner Industries
which were initialed by EP. These items include: Sink/Vanity Cabinet Guest
Bathroom ($1,100.00), Toilet Grab Bars Guest Bathroom ($1,100.00), Towel Grab Bar
Guest Bathroom ($250.00), Intercom System ($1,200.00), and Shower Bench master
bathroom ($175.00). The total cost of these removed items is $3,825.00. The smoke
detectors, previously not included as a bid item ($225.00), were removed from this cost.
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Kessler calculates the total difference as $3,600.00, which is almost identical to the 10%
C/L Cost = $3,599.50.
The file indicates that the repairs for the kitchen are necessary because, Ms. Price
requires maximum assistance at times to cook in her home. She cannot use her kitchen
due to its inaccessibility. An accessible kitchen design is included with this narrative that
will allow Ms. Price to safely and independently cook for her husband[emphasis added]
and family. Kessler noted that no husband was listed on the income certification.
Additionally, the bid specifically indicates, The cabinets are HOME DEPOT, Mills
Pride Cabinets and must be purchased through theCopans Road, Pompano Beach,
Home Depotthrough Sandy Alexander, RN, BSID, allied ASID, CEAC, CAPS. Sandy
Alexander is listed as the contact for the Center for Independent Living of Broward on
page 1 of the bid.
A Mortgage to Secure a Deferred Payment Loan is dated 12/5/2006, but signed by
Ernestine Price (Mortgagor) in the presence of Ernestine Price (Witness) on 12/1/2006.
The terms of the mortgage, as indicated on the Promissory Note, are a 0% interest loan
over a period of 10 years to depreciate at a rate of 1/120thper month until the mortgage is
forgiven after 10 years. The mortgage also makes reference to bid specifications and a
cost breakdown dated 5/24/2006 previously discussed (Exhibit 11).
On 12/5/2006, a Notice of Commencement was issued by the contractor Conner
Industries for Remodel Bath & Kitchen. The document was signed by Ernestine Price
and notarized by Virginia Conner (Exhibit 12).
A Building Permit Applications (Building and Plumbing) dated 1/9/2007 was submitted
to the Pompano Beach Building Department for alteration/repair of the kitchen/bath and a
plumbing permit for the bathroom by the contractor Conner Industries, Inc. The Building
Permit notes the total cost to Remodel bathroom Replace Kitchen Cabinets would be
$18,000.00 (Exhibit 13). The Plumbing Permit submitted by Conner Industries, Inc. lists
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a cost of $900.00 for a tub to shower conversion, install LAV & C.C., Sink (Exhibit
14).
No electrical permits were obtained, but electrical work was anticipated as per the bid
submitted by Conner Industries (reference Conner Industries bid Exhibit 10; Master
Bathroom #5, #6, #17 and #21; Guest Bathroom #3 and #6).
The Scope of Work submitted by Conner Industries, Inc. and stamped as approved on
1/31/2007 specifically indicates, No electrical work to be performed. No mechanical
work to be performed (Exhibit 15).
The Center for Independent Living was provided $39,807.00 on 9/19/2007 from the City
for the barrier-free removal of the home of Ernestine Price. The only documentation
contained in the file for the cost of the barrier-free removal program is from Conner
Plumbing & Remodeling (a fictitious business name for Conner Industries, Inc.) dated
5/25/2007 in the amount of $35,995.00. Center for Independent Living received a fee for
service of 10% ($3,599.50) and reimbursement for recording fees ($212.50) (Exhibit 16).
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Annie C. Hunt
1441 SW 3rd
Way
Pompano Beach, FL 33060
(Background/Disbursement Exhibit 1)
The applicant was a recipient of Emergency Roof Repairs.
Emergency Roof Repair
On 3/14/2006, Tommie B. Butts, Jr. Enterprises, Inc. submitted a price of $10,875.00 to
re-roof the house. The proposal is signed by Tommie B. Butts, Jr. and the
Homeowner/Agent authorizing work to be done is cited as Ernestine Price (Exhibit 2).
No other bids were contained in the case file. It should be noted that Annie Hunt is the
mother of Ernestine Price.
A Hurricane Emergency Roof Repair Certification Form was submitted by Annie C.
Hunt by dtc Ernestine Price on 3/20/2006. The Income Guidelines list one individual as
a member of the household and a gross monthly household income of $692.00. An IRS
form, SSA-1099 from the Social Security Administration indicates total benefits paid for
2004 as $8,083.20 (Exhibit 3).
A completed City Building Permit Application for roofing repairs was signed and dated
by Tommie B. Butts, Jr. and Ernestine Price on 3/24/2006, for a total cost of $10,875.00.
On 4/19/2006, an inspection was conducted on the property, which states, Florida
Building Code, Chapter 1, Broward County Amendments; Unable to verify renail of
sheathing, no one on site to open roof for inspection. Recorded notice of commencement
must be posted for first inspection. Florida Building Code, Chapter 1, Broward County
Amendments; mandatory Renail Sheathing Inspection was not Approved. Recorded
notice of commencement must be posted for first inspection. The comment on the
4/27/2006 inspection states, Bldg Final Structural (Exhibit 4).
On 3/27/2006, a Notice of Commencement was issued by the contractor Tommie B.
Butts, Jr. Enterprises, Inc. to re-roof the property owned by Annie C. Hunt (1441 NW 3rd
Way, Pompano Beach, FL 33060). The signature of Ernestine Price was notarized by
Vera Butts (Exhibit 5).
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An invoice #1468 was submitted by Tommie B. Butts, Jr. Enterprises, Inc. to the City for
the following work: Re-Roof Slope, Haul Away Debris, Obtain Permit in the amount of
$10,875.00 dated 5/1/2006. A Cash Payment Requisition was submitted by Eric A.
Johnson on 5/8/2006 and approved by T.C. Broadnax for the repairs to the property
owned by Annie Hunt. A check (#495347) was issued to the contractor on 5/10/2006 in
the amount of $10,875.00 (Exhibit 6).
No Deferred Payment Loan Agreement was drafted or completed regarding the
emergency roof repairs on this property.
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Annie C. Hunt
1441 SW 3rd
Way
Pompano Beach, FL 33060
The applicant was a recipient of the Barrier Free Removal Program administered by
the Center for Independent Living of Broward, Inc.
Barrier Free Removal
No documentation is contained in the case file to document that an application was ever
completed by or on behalf of Annie Hunt for the Barrier Free Removal Program which is
administered by the Center for Independent Living of Broward, Inc.
A Florida Housing Finance Corporation Resident Income Certification for Annie Hunt
indicates that the applicant has a gross yearly benefits/pension of $7,572.00 and assets
held in a Bank of America checking account totaling $627.33. The dates on the Resident
Income Certification have been redacted using correctional fluid and changed from
3/28/2006 to 12/1/2006 for the signature of the Head of Household (Annie C. Hunt
by Ernestine Price), Signature of Spouse or Co-Head of Household (unsigned) and
Robert Davis Director of Housing (Exhibit 7). No documentation is contained in the
case file to support the calculation of assets or verification of income for the applicant.
An Environmental Modification Assessment was conducted by Sandy Alexander, Home
Modification Design Specialist, on 5/10/2005, denoting necessary changes to the home of
the applicant to ensure the home is more accessible. The only completed bid in the case
file is from Conner Plumbing & Remodeling of 160 SW 5thCourt, Pompano Beach, FL.
The modifications to the home include: master bedroom ($2,030.00); hallway entrance to
master bedroom ($600.00); master bathroom ($3,595.00); kitchen ($11,700.00);
accessible entrance system ($695.00); other needs (smoke detectors and air conditioning
vent cover - $425.00); and permits, architectural plans and debris removal ($1,900.00) for
a total cost of $20,945.00. The Environmental Modification Assessment is signed by the
contractor on 5/25/2006 and by Bob Davis, Director of Housing, and Ernestine Price for
Annie Hunt on 11/14/2006. It should be noted that the tub/shower was not bid on or
replaced by Conner Plumbing & Remodeling as per the request of the homeowner
(Exhibit 8). Kessler observed one other item included in the bid with dubious pertinence
to general accessibility: fan with light ($235.00).
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On 12/5/2006 a Notice of Commencement was issued by the contractor Conner
Industries, Inc. on the property owned by Annie C. Hunt (1441 NW 3rdWay, Pompano
Beach, FL 33060). The signature Annie Hunt by Ernestine Price for her mother (deaf
and blind) was notarized by Virginia M. Conner, wife of Albert L. Conner (Exhibit 9).
An addendum ($2,475.00) is included to the Bidders Cost Estimate for a modified total
cost of $23,420.00. The addendum was submitted by Conner Plumbing & Remodeling
on 4/10/2007 (invoice #3253) for: Remove and replace existing back exterior entry door
and frame, including door casing and molding; repair any exterior and interior wall
damage due to door installation; prime and paint door and casing; includes new lever
handle and dead bolt ($1,200.00); obtain permit for exterior door installation ($300.00);
and Remove existing vanity and countertop and replace, including sink and faucet
($975.00) (Exhibit 10). Kessler noted that permit number 07-4322 was unsigned by the
owner but signed by the contractor on 5/16/2007 and submitted to the City for
replacement of the rear door at a cost of $900.00. The cost of the permit was $56.25
(Exhibit 11).
On 12/5/2006 a Mortgage to Secure a Deferred Payment Loan at the property located at
1441 NW 3rdWay was issued in the amount of $20,945.00, signed by Ernestine Price for
Annie Hunt. The terms of the promissory note specifically indicate in Schedule A,
The funds to each very low and low income applicant will be in a Deferred
payment payable at zero percent (0%) interest for ten (10) years, and decreases at
the rate of 1/20thof its value each month so that the said sum will be completely
forgiven in ten (10) year term, providing there is no conveyance or refinancing of
the property, as well as, the continued occupancy of the property as the
applicants property as the applicants principal residence. Should the property be
sold, rented or refinanced during the 10 years, the amount remaining on the loan
becomes due and payable to the SHIP Housing Trust Fund (Exhibit 12).
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The applicable permits for the work include Plumbing and Building Permits, both of
which were signed and dated by the contractor and homeowner (Annie Hunt by Ernestine
Price) on 1/9/2007. The total estimated cost of the work to be conducted is $8,800.00
(Exhibit 13). It should be noted that a vast discrepancy exists between the permit
application ($8,800.00) submitted by Conner Industries, Inc., d/b/a Conner Plumbing &
Remodeling, and the initial estimate by Conner Plumbing & Remodeling ($20,945.00),
effectively reducing the permit fee.
On 2/15/2007 a Durable Power of Attorney was issued by Annie Carrie Hunt giving
power of attorney to Ernestine Price (Exhibit 14). This issuance occurred after Ernestine
Price had already signed numerous documents on behalf of Annie Hunt.
A Modification of Mortgage and Promissory Note states that on 3/12/2007 the City
executed a mortgage in the amount of $20,945.00 and a modification was necessary in
the amount of $2,750.00, bringing the total amount of the mortgage to $23,420.00. The
Modification of Mortgage and Promissory Note is signed for the Mortgagor Annie Hunt
by Ernestine Price and is dated 5/23/2007 (Exhibit 15).
Invoice #3266 submitted by Conner Plumbing & Remodeling to the Center for
Independent Living of Broward, Inc. is dated 5/25/2007 and denotes $23,420.00 in
repairs made to the property (Exhibit 16).
Invoice #Pompano#2 dated 6/25/2007 from the Center for Independent Living of
Broward, Inc. details the $23,420.00 in work conducted, a 10% fee for service charged by
Center for Independent Living ($2,342.00), and reimbursement for recording fees
($187.25) for a total cost of $25,9494.25 (Exhibit 17).
A final walkthrough was conducted on 7/12/2007 and signed by Conner Plumbing &
Remodeling, Bob Davis, Michael Chapman and Annie Hunt (Exhibit 18).
An invoice (#3310) from Conner Plumbing & Remodeling dated 9/19/2007 indicates,
Repair all plumbing at the tub, toilet and sink as needed. The invoice also states, This
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Jeanette & Charles Innocent
1911 NE 1stTerrace
Pompano Beach, FL 33060
(Background/Disbursement Exhibit 1)
The applicant was a recipient of Emergency Roof Repairs.
A Hurricane Emergency Roof Repair Certification Form was submitted by Jeanette
Innocent and is undated. The Income Guidelines list Charles Innocent as the only
member of the household. Gross monthly household income of $690.67 and total yearly
gross income of $8,288.00 is listed (Exhibit 2). A Social Security Benefit Statement
dated 3/15/2006 for Jeannette Marie Innocent lists total benefits for 2005 as $8,288.00
(Exhibit 3).
On 3/16/2006, Sun Band Builders Construction submitted a proposal to re-roof the house
at a cost of $13,950.00. The proposal is signed by Daniel Morgan and by what appears to
the homeowners on 4/13/2006 (Exhibit 4).No other bids were contained in the case file.
A search was conducted on the Broward County Property web site and it was determined
that Charles and Jeanette Innocent are listed as owners of the property, yet the income of
only one individual was utilized in the calculation of income (Exhibit 5).
A completed City Building Permit Application (#06-4790) for roofing replacement is
signed by Jeanette Innocent and Sandra Puerta dated 3/28/2006. The Contractor is listed
as Master Contractors, Inc. at a cost of $13,950.00. It was noted that Master Contractors,
Inc. is a wholly different entity than Sun Band Builders Construction, Inc. and would
appear to be a subcontractor, although this cannot be confirmed. The permit fee is cited
as $391.60 which was paid on 4/14/2006. An additional $60.00 was paid on 5/1/2006
with the notation Mr. Morgan on the top of the receipt. Mr. Morgan is the
representative from Sun Band Builders Construction Inc. (Exhibit 6). It should be noted
that according to www.myfloridalicense.com, Master Contractors, Inc. is listed as a
Certified Roofing Contractor, Certified General Contractor and Construction Business
Information; Sun Band Builders Construction, Inc. is indicated as a Certified Building
Contractor, Certified Plumbing Contractor and Construction Business Information.
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An invoice (#6) was submitted on 4/28/2006 by Sun Band Builders Construction, Inc. to
Jeanette Innocent for a total cost of $13,950.00. A Cash Payment Requisition form was
requested on 5/1/2006 by Eric H. Johnson and authorized by T.C. Broadnax, former
Deputy City Manager, for payment of $13,950.00. Check #495078 was made payable on
5/3/2006 to Sun Band Builders Construction in the same amount (Exhibit 7).
On 5/3/2006, Sun Band Builders Construction, Inc. submitted a Laborer Warranty for
Charles and Jeanette Innocent, which states, All work is done according to
specifications, local codes and includes a 0ne year rooflaborer warranty. The shingles
are twenty-five year shingles installed. Warranty by Owens Corning limited warranty.
All above do not include hurricane damage (Exhibit 8).
No Deferred Payment Loan Agreement was drafted or completed regarding the
emergency roof repairs on this property.
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A Building Permit Application was submitted by the contractor Flooker Roofing, Inc. for
re-roof shingles / flat. The application was signed and dated by the homeowner (Carolyn
Rhone) and the contractor (Flooker Adams). The estimated cost of the re-roofing is
$10,125.00 with an estimated permit fee of $287.30 (Exhibit 7).
A Notice of Commencement was issued by Flooker Roofing, Inc. on 4/28/2006 for the
re-roofing and signed by the homeowner (Exhibit 8).
An invoice was submitted on 7/7/2006 from Flooker Roofing, Inc., d/b/a F.A. Home
Improvement, for the contract ($10,125.00), NOC ($12.50) and permit fee ($287.30),
totaling $10,424.80. A Cash Payment Requisition was submitted by Eric A. Johnson on
7/31/2006 and approved by T.C. Broadnax in the amount of $10,424.80. A check
(#498305) was made payable to Flooker Roofing, Inc. on 8/2/2006 for $10,424.80.
Additionally, payments were made for re-roofing four other individuals homes (Exhibit
9).
No Deferred Payment Loan Agreement was drafted or completed regarding the
emergency roof repairs on this property as required.
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Jeffrey B. Bosket Jr. & Tanzania T. Bosket
681 NW 19th
Avenue
Pompano Beach, FL 33069
(Background / Disbursements Exhibit 1)
The applicant was a recipient of the Ortanique Project.
The First Time Homebuyer Program Certification and Authorization form was signed by
the buyer (Jeffrey B. Bosket, Jr.), the co-buyer (Tanzania T. Bosket) and a witness to the
buyers signature on 10/26/2006. A stamp shows that The Abyssinian Community
Development Corporation received this application on 10/26/2006. Additionally, the
fifth member of the five member household is cited as unborn child expected due date
01/30/07 (Exhibit 2).
It should be noted that an undated Contract for Purchase and Sale contained in the file is
missing the first four (4) pages. The Ortanique Estates of Pompano Beach Contract for
Purchase and Sale is signed by the purchaser but is undated and does not bear the
signatures of the Pompano Beach CEHDA, nor does it bear a witness signature. In the
Contract for Purchase and Sale, a cost analysis dated 1/25/2007 is attached and indicates
a Sub Total Construction cost of $191,775.00. A statement at the bottom notes, All
prices accurate for a period of six (6) months from date prepared. Acceptance of
proposal and cost analysis allows contractor to commence with schedule of values, time
schedule and contract (Exhibit 3).
A letter between Simpson Developers Inc. and Jeffrey and Tanzania Bosket dated
5/4/2007 states the contract price of $193,300.00 cannot be achieved due to increases
in materials and time delays. The signed contract dated February 5, 2007 has a tentative
commencement date of August 2007 and/or thereafter. The construction contract price
($193,000.00) will have to be increased by 15% or ($28,995.00) to reflect a construction
price of $222,295.00 (Exhibit 4). The letter that was sent by the Developer in May
2007 was only four (4) months after this cost analysis was prepared, therefore the
contract price being inflated due to increases in materials and time delays is questionable.
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The income verification for the applicants (Jeffrey B. Bosket and Tanzania T. Bosket)
was signed and dated on 6/25/2007 by the applicants and subsequently signed and dated
6/25/2007 by Gloria J. Doss, Housing Counselor. The record indicates $63,637.59 as the
combined income for the applicants (Moderate Income), and $21,319.11 in assets held by
the applicants. Gross Year Income was calculated to be $71,137.59 by Kessler, resulting
in a $7,500.00 understatement of income. Furthermore, the unborn child, whose due date
was previously cited as 1/30/2007, is still listed as an unborn child as of the signing date
6/25/2007 (Exhibit 5). It unclear how a Contract for Sale and Purchase can be signed
before an income certification has been conducted and completed.
The verification of assets on deposit for Washington Mutual was received by the
Abyssinian CDC on 6/25/2007, indicating a 6-month average balance of $20,801.46
(Exhibit 6).
A Uniform Residential Appraisal Report was conducted by Dale Berman & Associates
on 5/3/2007. The report indicates the borrower as Bosket and the owner of public record
as Pompano Beach CEHDA. The report continues to state, This is a CEHDA loan, the
buyer only pays for the improvements, and the corporation pays for the land. The owner
may purchase land later. See contract for details. The contract price is listed as
$230,675.00 and the contract date is 08/30/2006. The appraisal indicates that, utilizing
the Sales Comparison Approach, the value of the property is $345,000.00. Additionally,
utilizing the Cost Approach (if developed), the value is $318,750.00 (Exhibit 7).
On 6/29/2007 a letter was sent from The Abyssinian Community Development
Corporation to Jeffrey B. & Tanzania T. Bosket congratulating them on meeting all of the
requirements to participate in the First Time Homebuyers Program. A maximum of
$25,000.00 of SHIP funds can be used towards the purchase of a new home (Exhibit 8).
A Mortgage Deed between the mortgagor (Jeffrey B. Bosket Jr., and Tanzania T.
Bosket, as husband and wife) and the mortgagee (The City of Pompano Beach) is
dated 7/31/2007. This mortgage is denoted as a second mortgage, inferior to the first
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mortgage. The Promissory Note for Permanent Second Mortgage Loan indicates that the
sum of the mortgage is $25,000.00 and is a permanent second mortgage with an interest
rate of 0% (Exhibit 9).
A Mortgage Deed between the mortgagor (Jeffrey B. Bosket Jr., and Tanzania T.
Bosket, as husband and wife) and the mortgagee (Pompano Beach CRA) is dated
07/31/2007. This mortgage is denoted as a third mortgage, inferior to the first mortgage
in favor of Bank Atlantic. The Promissory Note for Deferred Payment Loan indicates
that the sum of the mortgage is $63,000.00 and is a 30 year deferred payment Loan-to-
Grant (Exhibit 10).
An incomplete Preliminary copy of the HUD Settlement Statement dated 07/13/2007 was
contained in this case file. This preliminary copy indicated no contract sales price and
states that $203,547.36 is due to the borrower. No official copy of the HUD Settlement
Statement exists in the case file.
Only a preliminary copy of the HUD Settlement Statement was contained in the case file
and indicated only one (1) mortgage held by the City in the amount of $25,000.00. The
additional mortgage held by the Pompano Beach CRA is missing from the settlement
statement (Exhibit 11).
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Ozzie Christopher McLemore
650 NW 20th
Avenue
Pompano Beach, FL 33069
(Background / Disbursements Exhibit 1)
The applicant was a recipient of the Ortanique Project.
It should be noted that the applicant is a nephew to Charles Ellington, President of the
Pompano Beach CEHDA and is also an Employee of the City.
The First Time Homebuyer Program Certification and Authorization form was signed by
the buyer on 9/29/2006 and bore no witness signature. A stamp shows that The
Abyssinian Community Development Corporation received this application on 9/29/2006
(Exhibit 2).
The income verification for the applicant was signed and dated on 4/04/2007 by both the
applicant and Gloria J. Doss, Housing Counselor. The record indicates that $46,342.62 is
the income for the applicant (Moderate Income), and $2,411.72 in assets held by the
applicants. Gross Yearly Income could not be independently ca