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March 1, 2024 Meeting Minutes
Friday,March 1, 2024 12:00 PM
Tranquil Terrace
845 Swoope Ave.
Winter Park, FL 32789
Commissioners Present: Board Chair; Hal George, Commissioner Dawn Ofodile, Commissioner Bob Klettner, and Commissioner Karen Jacobs.
Commissioners Absent: Commissioner Tammie Holiday and Vice-Chair Kenneth Goodwin
WPHA Staff Present: Tarena Grant, Interim Executive Director, Amaris Hunt, Operations Manager, Melissa Martinez, Accountant, Felix Alicea, Procurement Manager and Sherry Sutphen, Attorney.
NDC Staff Present: Cindy Wilson
NDC Staff present via Zoom: Tina Burks, Compliance, Karen Kreutzer, CFO, Rick Elwood, Dennese Hitt, and James Allen.
Other: Rachel Johnson, Auditor and Patti Tilchin, Fee Accountant.
- Call to Order
Chair George called the meeting to order at 12:10. and announced a quorum. - Public Comment
There was no public comment brought before the board. - Consent Items
- Approval of Agreement with LaShanda Lovette and authorization of the Board Chairman to execute the same.
Attorney Sutphen explained that the consent item is a separation agreement between the housing authority and LaShanda Lovette. The agreement allowed her to request up to 20 weeks of pay upon separation. The agreement before the board is for 12 weeks of pay, plus 120 hours of her vacation, plus whatever she has accrued for this year, according to the board's policy. In exchange for the 12 weeks of pay, a release has been signed to release the board from any future legal action. Commissioner Ofodile asked Attorney Sutphen to explain the 7/21-day clause in the separation agreement. Attorney Sutphen clarified that older workers, classified as those over 40 years of age, are entitled to 21 days for consideration. While the 21 days can be waived, the 7 days cannot be revoked. Likewise, the board is also allowed to revoke the agreement should new information come to light.
Chair George asked for clarification on when the separation is effective. Attorney Sutphen stated that it is based on the date listed within the agreement. She went on to explain that any active investigations into her would stop and she would not present any results of the email investigation to the board. Commissioner Klettner moved to approve the separation agreement. Commissioner Jacobs provided a second. Chair George asked if there was any further discussion. Commissioner Jacobs asked if anything criminal was discovered if charges were allowed. Attorney Sutphen confirmed she had not discovered anything criminal in her findings and if she did, she would be obligated to report to the state attorney. Chair George called the motion to a vote. The motion was accepted unanimously.
- Approval of Agreement with LaShanda Lovette and authorization of the Board Chairman to execute the same.
- Actions Items
- Resolution No.: 03012024-A - Acknowledging Receipt of Audit for the Fiscal Year Ending September 30, 2023, from Malcolm Johnson and Company, Discussion led by Rachel Johnson of Malcom Johnson and Company, PA
Ms. Johnson introduced herself as the Auditor with Malcolm Johnson and Company. She stated that she is hired by the Winter Park Housing Authority and reports directly to its board and any governing authorities over the agency. She went on to explain we had 4 findings last year and two of them were cleared. The two findings that cleared were about cash receipt reconciliations and the second was the large adjustment made to tenant accounts receivable. Based upon her review, Accountant Melissa Martinez and Fee Accountant Patti Tilchin worked to correct a mapping issue that created the need for an adjustment. Two findings were continued.
#1 - New Finding, loss over internal controls over cash disbursements. Based on the sampling that was pulled, invoices were paid by WPHA that lacked detailed support to document what was being paid; Invoices were either incorrect or did not agree with what the vendor proposed in the quoting process. Estimated charges for payment were paid without requiring the vendor to get a detailed invoice. This affects the public housing portfolio, based on what is required. She gave an example with vendor Hummingbird providing an estimation of travel that was allocated across all properties., though the work that was completed was for one property, not all six. She went on to explain, in a random sample, she found that that all files had not been completed that they'd listed as completed.
Chair George asked what the estimated amount we spent with the vendor was. Ms. Johnson estimated around $170k. Attorney Sutphen expressed concern over what the purchasing authority was for the Executive Director and asked Ms. Hunt to provide her with the contracts to review. Another finding was that WPHA paid invoices that lacked accurate calculations for work performed. She found that the same work may have been paid on multiple invoices for the same travel dates. Attorney Sutphen stated she would like to review those invoices to seek reimbursement for things that were overpaid. Ms. Johnson explained that Hummingbird terminated the relationship with WPHA and asked Ms. Hunt to give further information. Ms. Hunt attempted to answer stating that the CEO of Hummingbird was dissatisfied with how an employee relation incident was handled with ED Lovette and declined to assist WPHA with any audit explanations or questions we may have had. Attorney Sutphen stated she would reach out on our behalf.
Commissioner Jacobs questioned the legitimacy of the company. Attorney Sutphen confirmed she'd look into it. Ms. Johnson explained that there were two contracts not to exceed $100K. it is her opinion that these contracts are for the same services, therefore there should not have been two contracts. This may have been done to avoid having to place a formal bid. Attorney Sutphen suggested that anything that is a continued service should be bid out. Ms. Johnson went on to explain that anything that may have been allocated to Public Housing in error would need to be paid back. Attorney Sutphen asked if there was a solid amount that is known at this time. Ms. Johnson stated she is working on that and that she'd recommended that Public Housing be paid back in the previous audit year as well. But it seems this was not done. She suggested that we go back 5 years and audit our expenses to ensure we pay back anything that should not have touched Public Housing. Attorney Sutphen confirmed that she did assist with the HUD responses for last year and is surprised this was not done. She confirmed that she will assist with the HUD responses this year as well and will ensure that the amounts that need to be paid back to public housing is reallocated.
Ms. Johnson explained that had the forensic audit that was suggested in the previous year's audit due to the inconsistencies found been completed, the agency wouldn't have these findings. As they would have been identified early on. Commissioner Ofodile asked what the Executive Director's purchasing authority was. Attorney Sutphen explained that ED Lovette assumed that she could spend $100K without coming before the board because she felt as though that's what HUD procurement policies state. She's unsure if this is the threshold, but she will look into it. As she has previously suggested, we had a purchasing policy for both the HUD properties and non-HUD properties. Ms. Johnson explained that she believed HUD's threshold is $250K, but this is generally for construction contracts. Many of which the agency's contracts are not. She suggested it's necessary to do 3 quotes for smaller everyday projects, to avoid mishaps like this.
Ms. Johnson went on to explain the next finding was for Billings and payments that were not reconciled to the procurement pricing listed in the agreed contract. This meant we overpaid on many invoices, as it did not agree with the contract. Commissioner Jacobs asked what the checks and balances were. Ms. Johnson explained that ED Lovette was responsible for approving the work as it related to the contract pricing.
There were also ineligible expenses for in-town travel and per diems. Per diems were paid for board and employee travel to a local conference though it was within 14 miles of the agency. Therefore, per diem and hotels should not have been purchased which makes this an ineligible expense. Commissioner Jacobs asked if this would also need to be reimbursed to Public Housing. Attorney
#2 - Deficiencies noted in maintenance of Credit Card This was a continued finding. Sampled 3 months and found invoices were missing or the credit card were not fully reconciled. She was unable to find support for local hotel stays. As well as ineligible expenses that were allocated to Public Housing. Such as the Who's Who article written on ED Lovette as fees and due. This should not have been charged to the agency, as this was personal resume development. Ms. Johnson stated that it is important we review all allocations that were applied to public housing.
#3 - Deficiencies noted in the tenant files Ms. Johnson stated that of her random sampling, 7 of 21 files were late on annual recertification, 2 files lacked current rent calculations and 2 files lacked complete third-party income verification. These are federal compliance requirements.
#4 - Procurement Ms. Johnson explained that she looked at 35 of 40 contracts that had inconsistencies as it relates to the agency's procurement policy. She explained how piggyback contracts were used and how the scope of work given to our agency was not in line with the services that we received. This is not how piggybacks should be used. She suggested looking at the ConsultHR contract to ensure it was procured correctly.
#5 - Loss over internal controls over banking This relates to the $250K attempted bank fraud. Ms. Johnson stated the finding related to not being able to identify the internal controls that the agency had to ensure something like this couldn't happen. She also mentioned the security deposit check fraud as well. Commissioner Jacobs asked about next steps with HUD. Attorney Sutphen expressed that she will work on the responses to HUD through the auditor and then a separate one to HUD. She suggested that all monies incorrectly allocated to HUD be repaid after doing a thorough audit for the last 5 years.
Fee Accountant, Patti Tilchin stated that accountant Melissa Martinez and herself will work on this project. However, it is a large undertaking and she will need help. Chair George asked how this would work, as Ms. Martinez is an NDC employee. He asked NDC to clarify what Ms. Martinez's role is with NDC. They gave a brief description stating that she was integral to the transition of financials with NDC. Chair George asked if it would be in the best interest to rehire Ms. Martinez as a WPHA employee. NDC did not disagree on this.
Attorney Sutphen stated we needed to motion to approve the resolution for receipt of the audit. Commissioner Jacobs motioned for the approval of resolution 03012024-A. Commissioner Klettner provided a second. The motion was approved unanimously.
The conversation then continued how best to handle the transition of Ms. Martinez to WPHA staff. Attorney Sutphen asked for clarification on what Ms. Martinez's current title and salary was. Ms. Martinez shared these details. Ms. Tilchin suggested a title change, as Ms. Martinez does more than Account payable. She suggested the title of Director of Finance. Commissioner Jacobs motioned to amend the agenda to include a discussion of Melissa Martinez being moved back to WPHA as an employee. Commissioner Klettner provided a second. The motion was approved unanimously.
There was then a motion to create the position of Director of Finance position within WPHA by Commissioner Jacobs. Commissioner Klettner provided a second. The Motion was approved unanimously.
Attorney Sutphen asked for clarification on what the salary should be for the Director of Finance position and the specifics of how vacation time would transfer over. Chair George motioned for Ms. Martinez to keep her current salary. Commissioner Jacobs provided a second. The motion was approved unanimously.
The discussion continued that Ms. Martinez should go back to WPHA at her original hire date with the organization to secure her years of service. Commissioner Jacobs motioned for Ms. Martinez to be re-bridged to WPHA at her original date of hire with the agency. Chair George provided a second. The motion was approved unanimously.
Commissioner Klettner motioned to amend the motion to include that the Interim Executive Director was included in the discussion of the rehire of Ms. Martinez to WPHA and it was agreeable. Commissioner Jacobs provided a second. The motion was approved unanimously.
There was then a motion to approve Ms. Martinez as the Director of Finance with WPHA by Commissioner Jacobs. Chair George provided a second. The motion was approved unanimously.
Ms. Johnson asked if there were any questions the board had for her before her departure. Commissioner Jacobs asked about the security features of IT with the organization and if finding #5 could have been avoided. Ms. Hunt provided some insight into what Semtech did after the fraud attempt. Commissioner Jacobs asked if she could work with Interim Executive Director, Grant and the IT company on the features they use for the agency. The board agreed this would be helpful.
- Resolution No.: 03012024-A - Acknowledging Receipt of Audit for the Fiscal Year Ending September 30, 2023, from Malcolm Johnson and Company, Discussion led by Rachel Johnson of Malcom Johnson and Company, PA
- Executive Director - Discussion and/or Direction
Ms. Grant gave a brief synopsis of the outstanding agency needs she is working on and that she is working closely with Chair George and Attorney Sutphen to ensure things are being handled efficiently in the transition. - Commissioner's Report
Commissioner Klettner stated there is a balloon payment due for Plymouth within the next week. He asked Chair George if approval could be made to extend the loan for at least 90 days. It was agreeable. Attorney Sutphen stated she would work with Interim ED, Ms. Grant on this and the transfer of any remaining accounts at United Community Bank.
The floor was opened for additional questions. There was no further discussion. - Adjournment
With there being no further business to come before the board, Commissioner Jacobs motioned to adjourn, and Commissioner Klettner provided a second. Chair George called adjournment at 2:01 PM.