DC Housing Authority headquarters. Credit: Darrow Montgomery

An independent audit of three D.C. Housing Authority contracts found the agency wasted about $1.3 million, a source familiar with the document tells LL. DCHA did not disclose the audit or its findings in its responses to the D.C. Council’s annual oversight questions despite a specific request to list any ongoing or completed audits during fiscal years 2020 and 2021 to date.

LL also requested the auditor’s report back in August through the Freedom of Information Act, but DCHA has so far failed to provide it. A source familiar with the document described the audit’s findings to LL.

The audit found DCHA paid international management consulting firm McKinsey and Company $984,600 for a “strategic plan” that it never received, the source says. DCHA then signed another contract with McKinsey for $249,900—$100 below the threshold that requires the DCHA Board of Commissioners’ approval. The auditor concluded the agency’s decision to sign a second contract, rather than modify the first, and at a price $100 below the threshold that triggers board approval, were intentional efforts to avoid such oversight, according to the source familiar with the audit. DCHA also did not disclose the second McKinsey contract in its answers to the Council’s oversight questions.

Under the second contract, McKinsey produced a “portfolio optimization tool” that at the time of the audit was not being used. In response to the auditor’s findings, DCHA admitted the quarter-million-dollar tool was not in use because of staff turnover, according to the source familiar with the audit. McKinsey could not immediately provide a comment. LL will update this story if the company responds.

In a previous interview with LL, DCHA Director Tyrone Garrett said the tool is now in use. Although he doesn’t know how to use it himself, his team in the Office of Capital Programs does, Garrett said. Garrett also said his 20-year transformation plan is actually the strategic plan called for in the million-dollar contract with McKinsey. When pressed specifically on whether McKinsey produced the transformation plan, Garrett clarified that “they supported us.” When asked how McKinsey specifically supported the transformation plan, Garrett referred LL to DCHA’s lawyer.

Garrett also told the independent auditor the transformation plan is the same thing as the strategic plan. But the audit report calls that explanation into question. DCHA’s transformation plan is largely a roadmap for redeveloping 14 of the agency’s most decrepit properties. It does not cover the full scope of work in McKinsey’s contract, the auditor found, according to the source familiar with the document. The auditor identified another contract, worth nearly $200,000, for the work left undone in the McKinsey contract, which involves an assessment of DCHA’s organizational structure and operational functions.

If one firm could produce a strategic plan for about $200,000, LL wonders why DCHA signed a million-dollar contract with McKinsey for the same work.

Garrett’s contention that his transformation plan is the same thing as the strategic plan called for under McKinsey’s contract is further undermined in his agency’s answers to the Council’s oversight questions. Asked to provide “your most current strategic plan and identify each goal and strategy,” DCHA did not link to its transformation plan. Instead, the agency wrote:

“The District of Columbia Housing Authority provides quality affordable housing to extremely low- through moderate-income households, fosters sustainable communities, and cultivates opportunities for residents to improve their lives.”

Then DCHA listed five goals:

• Create opportunities to improve the quality of life for DCHA residents through collaboration and partnerships.

• Increase access to quality affordable housing.

• Provide livable housing to support healthy and sustainable communities.

• Foster a collaborative work environment that is outcome driven and meets highest expectations of the affordable housing industry.

• Effectively communicate DCHA’s accomplishments and advocate for its mission.

In its response, DCHA also references Garrett’s 2021 “performance goals” (p. 337). That document lists four goals, such as “effectively lead the agency’s response to COVID-19” and “effectively manage development and capital programs,” and gives some explanations for how he will achieve them.

DCHA also has not produced a “strategic plan” in response to LL’s FOIA request submitted in August.

Garrett did not reply to LL’s email Tuesday asking why the audit was missing from the agency’s answers to the Council’s oversight questions. DCHA spokesperson Tony Robinson writes in an email that DCHA omitted the audit from its responses “because the matter was at the time of submission [to Council], subject to potential litigation.

“The matter is still under review and therefore is not final,” Robinson writes in an email.

Robinson further requested that LL not publish this story, and asked that the agency’s full response be included. It reads as follows:

As an Agency, The District of Columbia Housing Authority is entitled to investigate and verify allegations before we share them with the public. Frankly, it is irresponsible of the City Paper to publish unverified information without confirmation of the veracity of the source or the innuendo provided. To put it plainly, your source does not have their facts straight and has no idea what they are talking about. Further, we suspect that your source may be a recently terminated employee who is simply being vindictive. Whatever “findings” your source is providing do not mention Executive Director Tyrone Garrett by name, don’t point to any law violated, and neither do they imply any act of corruption. The audit was a failed political hit job that went far wide of its mark.

Our job is a more important one–getting to the truth of the matter, and protecting the Agency. In fact, at the behest of the DCHA Board of Commissioners, the report in question is under review by our Office of General Counsel and an outside law firm that has demanded the production of records by the auditing firm. That review may result in a request for a refund of fees and/or a revisiting of the unsubstantiated assertions made in the document. DCHA has the right to do that, and is obligated to do so, unlike the City Paper. Until our investigation is complete, best practice dictates that DCHA and the public would be better served by not jumping to conclusions, be influenced by public comment or sharing documents in real time.

It is ironic that the firm hired to identify so-called fraud, waste, and abuse, actually wasted time and money on an unsubstantiated and erroneous document.

Our goal and mission is to move the Authority forward and support low-income residents as they work to improve their lives and living conditions. We have an obligation to ensure that we are providing the most stable housing possible for the most vulnerable citizens. We will not be deterred by erroneous matters that do nothing to advance our critical mission.

The oversight hearing, where Garrett will testify before the housing committee, is scheduled to begin today at noon. LL bets he’ll get a few questions about the missing audit and its findings.

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