This is on the county thread because they are multi-countyhttp://www.pnj.com/article/20120624/NEWS01/306240028/1006/news01Raising the roof: Rebuild Northwest Florida denies audit claims of faulty work
Agency refutes claims of faulty work
11:24 PM, Jun. 23, 2012 | 6 Comments
Rebuild Northwest Florida is challenging a federal audit that cites financial shortcomings at the Pensacola-based nonprofit agency and also questions whether the retrofitting of some 1,500 homes is adequate.
The audit, conducted by the Office of the Inspector General of the Department of Homeland Security, says that Rebuild overpaid contractors and did not comply with several requirements for the management of some $32 million in grants, 75 percent of which came from Federal Emergency Management Agency funding.
It also states that the roofs of certain homes modified according to wind retrofit measures designed by Rebuild’s engineer may not be able to withstand 130 mph winds, as required by the grants.
Rebuild, the grassroots-sprung agency that came to the rescue of thousands of Escambia and Santa Ross residents whose homes were damaged in Hurricane Ivan in 2004 and Hurricane Dennis in 2005, disagreed with all of the findings. The audit covered the period from Sept. 7, 2006, to Dec. 31, 2010, and was completed last November.
Garrett Walton, Rebuild’s chief executive officer, said he has put the audit “in my rearview mirror.”
“Frankly, I’m not worried about it,” he said. “I haven’t done anything wrong, so what can they do but holler and fuss? We’re moving on and trying to focus on getting houses done.”
In its battle over the audit, Rebuild also has found support from its former executive director, Miles Anderson, who is now mitigation bureau chief for the Florida Division of Emergency Management.
Anderson was hired as Rebuild’s executive director in May 2006. He returned to the Division of Emergency Management, where he previously worked, in the fall of 2007.
On Feb. 17, Anderson wrote FEMA that the state division “does not concur in any of the findings.”
FEMA expects to respond to the audit by Aug. 8, according to Mary Olsen, a spokeswoman for the agency’s Atlanta office. FEMA is part of the Department of Homeland Security.
“FEMA is working with the Florida Division of Emergency Management in preparing a response,” Olsen said. “We need more time to review and discuss the relevant documents and facts ... to assure complete and accurate responses.”
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Rebuild was formed by a group of community volunteers in November 2004, in the wake of Hurricane Ivan. From an initial mission of repairing hurricane-damaged homes, it has evolved into a public-private partnership with a mission of hardening homes against future hurricanes.
Since its inception, the agency has received $76 million in grants, including nine grants totaling $37.6 million as of the close of the audit. It received another $39 million grant last year to help homeowners fortify their homes.
To date, it has hardened 4,400 homes.
The issue of whether the hurricane retrofitting was adequate involves homes with gable ends — a sloped roof with a vertical wall that forms a triangle under the end of the roof.
The 1,500 potentially affected homes are either more than one story tall or have a gable end wall width of more than 20 feet.
An independent engineer working for FEMA determined that the design specifications certified by Rebuild’s engineer for gable end bracing fell short of ensuring the required protection up to 130 mph winds, according to the audit.
The audit recommends that Rebuild and the state review the gable end retrofitting and implement corrective measures, if appropriate.
But Walton and Anderson say the finding is incorrect and the retrofitted homes are safe.
Anderson wrote FEMA that Rebuild’s gable end bracing was fully vetted by FEMA, expert engineers, building officials, the Florida Building Commission and other construction professionals.
He questioned why FEMA would hire an independent engineer since Rebuild already relied on a professional engineer.
Because Rebuild does not agree with the finding, it has not made any plans to correct the retrofitting.
The audit states that Rebuild imposed excessive charges of $878,200 when awarding contract work totaling $2.7 million.
At the heart of that dispute is whether the contractor’s management fee per home was reasonable.
In May 2007, after completing wind storm mitigation of 65 houses, Rebuild’s Pensacola-based contractor, R.E. Reece, requested a price increase, from $280 per home to $620.
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He said the increase was necessary because of subcontractor costs, extra visits to the homes to ensure satisfactory work, employee drug testing and other expenses.
Rebuild agreed to the 121 percent increase despite, according to the audit, not providing any cost/price analysis.
Walton, who was a key volunteer but not employed by Rebuild at the time, said the increase was justified because the scope of the contractor’s duties far exceeded what was originally anticipated.
Nevertheless, after a rebid process in December 2010, Rebuild ended up awarding the management services to three contractors, paying one of them $420 per house and the other two $580 per house.
That alone is proof that the $620 fee was too high, resulting in the conclusion that $878,200 should be disallowed to Rebuild, the audit says.
Anderson responded that the finding is misleading.
At the time of the first bid, the need for real estate construction services was “overheated” and, consequently, expensive, because of the extensive rebuilding required by Ivan, he wrote. By the time of the second bid, real estate construction “was substantially non-existent with very high levels of competition for what little work there was, and low prices.”
Other financial issues
The audit also lists several other issues regarding contracting procedures:
• It says Rebuild did not ensure open competition for construction management services because it solicited bids only through an online business magazine, not through local newspapers or other local media.
The limited advertising meant that small businesses, minority-owned firms and women’s business enterprises did not have a fair shot, the audit says.
Rebuild received only one response to its bid request. It did not conduct a price analysis to determine the reasonableness of the contractor’s proposal, according to the audit.
The audit suggests that the lack of competition for the bid contributed to the high construction management fee.
• Rebuild consistently held large amounts of cash that exceeded its immediate needs.
The audit says the state provided working capital cash advances to Rebuild, and Rebuild did not first exhaust those advanced funds before submitting more reimbursement requests to the state.
• Rebuild maintained the advances in a non-interest bearing account.
Rebuild’s response was that the state was familiar with its cash flow restraints and needs and more knowledgeable about the requirements for working capital advances.
The agency said it would work with the state to better manage working capital advances.
1. Disallow $878,200 of excessive contract costs.
2. Instruct Rebuild to develop written procedures to minimize the time lapse between receipt of federal funds and the disbursement of those funds, and instruct the state to reimburse Rebuild in a timely manner.
3. Instruct state to review amount of working capital advances needed by Rebuild and to consolidate such advances when possible.
4. Instruct state to require Rebuild to keep advanced funds in interest-bearing account.
5. Impute interest that would have been earned on advanced funds, and instruct Rebuild to remit to FEMA.
6. Instruct state to conduct independent assessment of gable end bracing techniques to determine if they are adequate.
7. Instruct Rebuild to correct gable end bracing if it is found defective.
Rebuild Northwest Florida
A group of Pensacola community leaders formed Rebuild in November 2004 as a private nonprofit organization to help Escambia and Santa Rosa residents respond to Hurricane Ivan’s devastation on Sept. 16, 2004
Rebuild’s original funding came from donations, fundraising concerts and state grants. In 2006, the agency applied for FEMA hazard mitigation grants.
As of Dec. 31, 2010, Rebuild had received nine grants totaling $37.6 million, 75 percent funded by FEMA.
The money was largely for the retrofitting of low- and moderate-income homes in the two counties. By the end of 2010, the agency had hardened more than 4,400 homes to better withstand hurricanes.
In March 2011, Rebuild received a $39 million FEMA grant to retrofit another 5,000 homes across the two counties.
FEMA pays 75 percent of the cost of the retrofitting, while homeowners pay 25 percent. Anyone may apply for a grant, without regard to income.
The organization has been hardening homes at the pace of about 30 per week.