Internal Auditor Says DCHA Violated Public Procurement Law, Concealed Actions

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The DC Housing Authority illegally contracted with a Virginia-based software company, spending about $1 million with no tender and dividing the amount into smaller purchases to evade scrutiny from the DC’s board of directors. agency, according to a report by the Housing Authority’s internal auditor.

The review alleges that DCHA, under its former director, Tyrone Garrett, entered into the first of “illegal contracts” in 2019. But in more immediate concern to the agency’s board, the The review also accuses current DCHA executive staff of wrongfully attempting “to use emergency contracts to cover up the mistake of obtaining an illegal contract.

“In an effort to address the contract mismanagement and malfeasance of the previous administration, the current administration has itself created additional mismanagement and malfeasance,” according to the report, released Nov. 1 and obtained Friday. by the Washington Post.

The review was triggered indirectly by a broader DCHA federal audit released last month that questioned the agency’s relationship with Verbosity, LLC, a vendor that provided website redesign and “automated deployment of manpower” for the agency’s police department, among other services.

Housing Authority director Brenda Donald said on Friday she had agreed to the initial purchases were done inappropriately, but she flatly denied the review’s allegations that her own administration had done anything wrong.

“I stand by what we did,” Donald said, “and it was exactly the right thing to do.”

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Donald, who led the agency for about 17 months, blamed the problems on Garrett, who the board fired in May 2021. She said she couldn’t fix everything overnight at the authority, which serves approximately 30,000 households through housing vouchers and blended finance buildings and traditional public housing.

Donald said his administration had halted all purchases from Verbosity except for the police tracking software, allowing that part to continue as two consecutive single-source emergency contracts. She said the software was needed to comply with a settlement agreement with the DC Attorney General and the emergency contracts were needed until a bidding process could be finalized.

The internal review criticized the decision, saying that DCHA “has had ample time to issue a full and fair tender…instead of issuing another emergency contract for procurement from a sole supplier in October”.

The auditor also took aim at the documents Donald’s staff gave the auditor to justify the emergency contracts, suggesting they were at best sloppy and at worst “forged”.

Donald categorically denied this allegation. “We’re not trying to hide anything here,” she said. said. “This is a cleanup process – a legal cleanup – that is well documented.”

In a report Handed over to DCHA’s board of directors last month, the US Department of Housing and Urban Development criticized the DC agency for inadequate management, poor oversight and faulty governance. The HUD report pointed to lack of procurement oversight among broader governance issues that led the agency to fail to provide “decent, safe, and sanitary” housing for its residents, in violation of federal requirements.

The HUD report came a year after the abrupt departure of former DCHA Chairman Neil Albert, who left after it was revealed he had authorized contracts for a design company owned by his partner, Paola Moya. The U.S. Attorney’s Office then issued a subpoena to the Housing Authority seeking documents relating to Albert and his partner’s company, Moya Design Partners.

HUD evaluators reviewed a dozen DCHA procurements and found systematic issues that included violations of HUD regulations and the Housing Authority’s own policy. DCHA staff “reported that they sometimes felt compelled to take action in accordance with direction from senior management and the board, rather than complying with regulations, policies and procedures that should have governed their actions. “, says the HUD report. He asked DCHA to hire an outside firm to review all of his contracts to make sure they complied with HUD requirements.

The HUD report specifically said DCHA’s purchases from Verbosity violated the Housing Authority’s own policy requiring “full and open competition.” The HUD report said “competition for this type of work should have been possible.”

HUD reviewers demanded that DCHA’s board investigate why the agency introduced Verbosity without competition, a question that the internal auditor’s examination does not answer. The review, however, recommends that the board take further action which “could include an impartial external investigation” overseen by the auditor.

Donald said that after becoming director, “we discovered that there were a number of non-competitive purchase orders that had been initiated by the previous administration, but there were none” none in my administration”.

In February, Donald promoted the Housing Authority’s long-time purchasing and contracting manager, Lorry Bonds, to the agency’s general counsel. The original Verbosity purchases took place under Bonds’ watch, but Donald said Bonds was not to blame because Garrett “purchased this relationship with Verbosity without going through the purchasing office”.

Bonds declined to comment. Garrett and Verbosity executives did not respond to emails seeking comment.

After the HUD report, DCHA board member Bill Slover requested the internal auditor’s review. Donald said she lobbied for her own management staff to provide a report instead, but Slover refused.

Slover said Friday night that “as we try to regain residents’ trust,” it’s critical the council begins to exercise oversight. “It’s the beginning, not the end,” he said. “This board must review all questionable contracts.”

Slover said he had sought information about Verbosity’s supply from Donald and his staff for months, after seeing DCHA police submissions involving the company and wondering why a contract for services of the company had never been presented to the board.

The agency’s internal auditor, Petuna Cooper, agreed to undertake the review.

The resulting report criticized Bonds, noting that as head of procurement in early 2021, she emailed Garrett raising an issue with Verbosity’s supply. “However, instead of ending the relationship with Verbosity, [Bonds] enabled the contractor to continue its engagement with DCHA, thereby furthering the current non-competitive procurement breach,” the review states.

The review also accuses Donald’s chief operating officer, Rachel Molly Joseph, of withholding relevant documents and information during the review. Joseph declined to comment. Donald said the allegation was false.

HUD rules require a “justification note” for sole-source emergency purchases, and Donald told the Post she needs one. But one of the memos Donald’s staff provided to auditors was dated Oct. 27, the same day the auditor requested the memos, the review says.

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According to the review, a former DCHA technology staffer told the auditor that in 2019, Garrett introduced the staffer to a Verbosity manager prior to contract engagement. A current staff member, who wished to remain anonymous for fear of retaliation, told the auditor that Verbosity directors had several discussions with DCHA staff prior to the engagement, according to the auditor’s report.

The review found there is “clear and compelling evidence” that the procurement violated federal law by giving Verbosity an unfair advantage over other potential bidders.

Bonds and Joseph were placed on administrative leave briefly after the internal review was released, Donald said. She said the council had ordered the move.

Donald canceled the leave after the board obtained a legal opinion that he “didn’t have the power to ask me to do it,” she said. “And by then I had provided the other side of the story.”

The board scheduled an emergency meeting for Monday to discuss the auditor’s report, canceled the meeting, then held a 2-hour meeting Wednesday behind closed doors.

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