City Council and Housing Authority Board Meeting: July 14, 2009

Agenda Item: 1-J

To: Mayor and City Council

Chair and Housing Authority Members

From: Andy Agle, Director of Housing and Economic Development

Barbara Stinchfield, Director of Community and Cultural Services

Subject: Licensed Clinical Social Worker and Fraud Investigation Services

Recommended Action

Staff recommends that:

1. The Housing Authority Board authorize the Executive Director to negotiate and execute a professional services contract for the Housing Authority with Program Compliance Solutions to provide fraud investigation services for the Housing Authority, in an amount not to exceed $218,400 ($72,800 annually) for a three- year contract.

2. The Housing Authority Board and City Council authorize the Executive Director/City Manager to negotiate and execute a professional services contract to provide clinical support for the Housing Authority and the Human Services Division with Ms. Dorothy Berndt, LCSW, in an amount not to exceed $237,057 ($78,019 annually) for a three-year contract.

Executive Summary

The Housing Authority and the Human Services Division utilize the services of a Licensed Clinical Social Worker (LCSW) to assess the clinical needs of homeless, senior and disabled households and coordinate care, stabilize persons needing housing and to keep persons “at risk” housed. The target populations and service needs overlap those served by the Housing Authority and Human Services Division. The proposed LCSW annual contract for The Housing Authority and the Human Services Division will not exceed $78,019 and may be renewed for two additional one-year terms.

The Housing Authority is required by the U.S. Department of Housing and Urban Development (HUD) to investigate potential fraudulent activity of persons participating in federal programs, including the Section 8 Housing Choice Voucher, Family Self Sufficiency, Shelter Plus Care and other programs. The programs have regulatory requirements for eligibility regarding income and asset limitations. The Housing Authority is also required to seek restitution if fraud is discovered. The annual fraud investigation contract for the Housing Authority will not exceed $72,800 and may be renewed for two additional terms.

Background

The LCSW service is a pivotal component to the success of Housing Authority programs and homeless initiatives under the City’s adopted “Action Plan to Address Homelessness”, including Shelter Plus Care, Family Self-Sufficiency, Section 8 Housing Choice Voucher, Redevelopment Agency Housing Assistance, HOME, the Chronic Homeless Program Service Registry, and the Support Intensive Program (formerly the Serial Inebriate Program) to engage and stabilize homeless and disabled residents of Santa Monica. The service is a keystone to outreach and service connection to other mainstream services.

As the primary funder of the Section 8 Housing Choice Voucher program, HUD requires fraud investigation and restitution as factors for evaluating the City’s administration of this program. The Housing Authority recovers approximately $75,000 annually from fraud-related activities. The Housing Authority does not have sufficient staffing capacity to provide in-house investigation services. Due to the nature of the work, it is also preferable to use a third-party contractor with documentation that is indisputable and unbiased.

Discussion

The Housing Authority and Human Services Division collaborate to provide the needed support to work with disenfranchised populations struggling to obtain and sustain affordable housing and remain in Santa Monica. Those include persons who are chronically homeless, physically and mentally disabled, and seniors. The LCSW reviews documentation of disability and homeless status to assure eligibility to the different programs, is deployed by staff to conduct assessments in the field, connects recipients to other mainstream services and assures appropriate treatment, and provides technical clinical training and support to contracted service providers and staff. Many households who are marginally stabilized in the community would likely become homeless or require high cost services without the LCSW support. Contracting for this service is the most cost efficient way to work with this challenging population.

Fraud investigation is triggered when a discrepancy is discovered or reported to the Housing Authority involving federally funded rental assistance programs. Most of the fraud activity is related to unreported income that is discovered on recipients’ records through required third party verifications provided by HUD. Once a recipient is issued a voucher and secures housing, their income and assets are reviewed and recertified annually by staff. Staff refers potential fraud cases to the investigator who then interviews the applicant/recipient and other persons who are relevant to the case and gathers all available documentation to determine if a recipient gave false information to secure or sustain a housing voucher. Other investigations include disposition of assets for the purpose of eligibility, leased housing units that are not occupied by the recipient, and household members who reside in a unit and are not properly reported. At the Housing Authority’s direction, the investigator may negotiate with the individual to make repayment agreements. Absent investigations, fraud activity would likely increase and thereby reduce the number of eligible low-income households receiving assistance through the Section 8 program.

Contractor/Consultant Selection

A request for qualifications for professional services was posted on the City of Santa Monica website to provide licensed clinical social worker support for an annual contract that can be extended for two additional one-year terms. Two responses were received from the Covenant People, Inc. and Ms. Dorothy Berndt. Staff reviewed the submittals for the LCSW applicants and rated each on qualifications, project understanding, experience, price and references and has determined that Dorothy Berndt is the most qualified contractor to support the services of the Housing Authority and the Human Services Division. Ms. Berndt is recommended based on her knowledge of various HUD-funding sources and regulatory compliance requirements and for her previous five years of experience working with City staff, local service providers, and program participants including persons who are homeless. Ms. Berndt has expertise with the Los Angeles Department of Mental Health and with the local homeless service providers who are the main point of service for most of the clients who receive housing and services in the city. She has specific expertise to determine if disability requirements have been adequately documented for HUD compliance and if the appropriate care plan based on that disability is documented and followed. The target population served is often the most disenfranchised population who do not seek traditional treatment in an office setting. The other submission did not speak to outreach or working with this population in a non-traditional treatment setting while Ms. Berndt’s submission addressed non-traditional settings and challenging populations. Ms. Berndt has been providing the proposed services to both the Human Services and Housing Authority under separate contracts over the past five years.

A request for qualifications for professional services was posted on the City of Santa Monica website to provide fraud investigation services for an annual contract that can be extended for up to three years. Staff reviewed the submittals and rated each on qualifications, project understanding, experience, price and references and has determined that Program Compliance Solutions is the most qualified contractor to support the services of the Housing Authority. Responses were received from Sotomayor & Associates LLP, Stovefield Josephson, Inc., and Program Compliance Solutions. Mr. Douglas Eaton, Principal of Program Compliance Solutions (PCS), has extensive familiarity with the City of Santa Monica. Mr. Eaton has been providing services to four other Housing Authorities for the past ten years and is very knowledgeable regarding Housing Authority programs and the regulatory compliance applications. Mr. Eaton was a police officer for 9 years with the City and worked as a District Attorney Investigator for 24 years. Mr. Eaton has been successfully providing services to the Housing Authority and recovered fraudulently obtained funds totaling $395,000 under a previous contract. Mr. Eaton’s hourly rate is more competitive than the other applicants.

Financial Impacts & Budget Actions

Funds for the clinical support professional services contract are budgeted in account 012628.561402 ($44,460) for the Human Services Division and in 01264.555060 subledger 74138 ($33,559) for the Housing Authority. Funds for the fraud investigation professional services contract are budgeted in account 01264.555060 subledger 74138 for the Housing Authority.

Prepared by: Barbara Collins, Housing Manager

Approved:	Forwarded to the City Council and Housing Authority Board:
Andy Agle, Director Housing and Economic Development	P. Lamont Ewell Executive Director