SR-09-11-2012-3OID
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City of City Council Report
Santa Monica`°
City Council Meeting: September 11, 2012
Agenda Item: 3-
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Modification of Professional Services Agreement #9164 for Program
Compliance Solutions
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a first modification to Professional Services Agreement #9164 in the amount of
$50,000 with Program Compliance Solutions (PCS), a California -based company, to
provide fraud investigation services for the Housing Division. This would result in a new
one (1) year agreement for a total contract amount not to exceed $268,400.
Executive Summary
The Housing Division is required by the U.S. Department of Housing and Urban
Development (HUD) to investigate fraud activity of persons participating in federally
funded housing programs. These programs include: Section 8 Housing Choice
Vouchers, Family Self- Sufficiency, HOME, CDBG, Shelter Plus Care, and Supportive
Housing Program (SHP). HUD programs have strict regulatory requirements regarding
income and asset eligibility. Staff recommends that PCS continue to provide
investigation services for the Housing Division. This action would increase the total
contract amount from $218,400 to $268,400 and extend the contract for one additional
year ending September 30, 2013.
Background
On July 14, 2009, City Council authorized the approval of the three -year professional
services agreement with PCS.
Discussion
An increase and extension of the existing contract with PCS is recommended to ensure
continuity in the monitoring of the Housing Division's subsidy programs. The Housing
Division is required by the U.S. Department of Housing and Urban Development (HUD)
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to investigate fraud activity of persons participating in federally funded housing
programs. These programs include: Section 8 Housing Choice Vouchers, Family Self -
Sufficiency, HOME, CDBG, Shelter Plus Care, and Supportive Housing Program (SHP).
HUD programs have strict regulatory requirements regarding income and asset
eligibility. Fraud investigation is triggered when a discrepancy is discovered or reported
to the Housing Division involving federally funded rental assistance programs. PCS is
not involved in decisions and consequences regarding the outcome of investigations
and only conducts such investigations based on staff referrals when evidence warrants.
Staff refers potential fraud cases to the investigator who then interviews the recipient
and other relevant persons and gathers all available documentation to determine if a
recipient gave false information to secure or sustain a housing voucher. Investigations
include: unreported income or assets, disposition of assets for the purpose of eligibility,
leased housing units that are not occupied by the recipient, and unreported household
members who reside in a unit.
Potential ramifications for not continuing fraud investigation services include participant
program abuse, increased and unnecessary financial obligations of the Housing
Division and negative audit findings from HUD. Additionally, fraud activity would likely
increase, thereby reducing the number of eligible low- income households receiving
assistance through housing subsidy programs.
Contractor Selection
A request for qualifications for professional services was posted on the City of Santa
Monica website in June 2009 to provide fraud investigation services. Staff reviewed the
submittals and rated each on qualifications, project understanding, experience, price
and references. Mr. Eaton has continued to successfully provide services to the
Housing Authority. Since PCS has an existing contract with the City, this report
recommends extending the existing professional services agreement for one additional
year ending September 30, 2013 for $50,000, thereby increasing the total contract
amount to $268,400.
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Financial Impacts & Budget Actions
The contract modification to be awarded to Program Compliance Solutions is $50,000,
for a new contract order total of $268,400. Funds are available in the FY 2012 -13
budget in division 2690; contract will be charged to account 122691.555060.
Prepared by: Lucie Loach, Acting Housing Authority Administrator
Approved:
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Andy Agle, Director
Housing and Economic Development
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Forwarded to Council:
Rod Gould
City Manager