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B-164537 1 (1970-10-28)

handle is hein.gao/gaobabkqs0001 and id is 1 raw text is: C) /1 A S-7 AkeaO PTR d&W bm L~a % ATES B-164537 RELEASED OCT LM089796 Dear Mr. Broyhill: We refer to your letter dated April 10, 1970, and our subsequent discussions and agreements with Mrs, Elizabeth McCann of your staff re- garding your request that we inquire into alleged rental arrearages on space leased to Youth Pride Economic Enterprises, Inc. (Corporation)p at 2620 to 2630 14th Street NW, Washington, D.C. (1400 Fairmont St. NW.), and the possible use by the Corporation of Federal funds to purchase an apartment building, As we informed you on July 23, 1970, we arranged for the Department of Labor to review these matters during an audit it was making of the Corporation's expenditures under a Department contract. The purpose of this letter is to advise you of the results of the Department's audit, our evaluation thereof, and the additional actions that the Department proposes to take on certain unresolved issues, The Department's audit showed that the rental payments for the prop. erty leased by the Corporation on 14th Street were current as of August 3. 1970. The results of the audit, however, are inconclusive as to whether the Corporation used Federal funds in the purchase of the Buena Vista apartment complex at Shipley Terrace and Buena Vista Terrace SE., Washington, D.C. The Department of Labor contract under which the Corporation re- ceived Federal funds was entered into on August 5, 1968, and was amended on May 22, 1969. The contract authorized funds up to $1,172,010 to be provided to the Corporation for investment in corporate enterprises to enable the Corporation to employ permanently 275 disadvantaged persons before August 5, 1970. The Department disbursed $1,054,809 to the Corpo- ration under the contract. No additional contracts have been entered into between the Department and the Corporation. According to the Department, the Corporation commingled the funds received under the contract with other Corporation funds and this pre- cluded a determination by the auditors of the exact use made of funds received under the contract, At the request of the Department, the Cor- poration attempted to account for the funds received under the contract and in the resulting report showed expenditures totaling $1,030,290. This amount was $24,519 less than the amount the Department disbursed to the Corporation under the contract, Of the $1,030,290 reported by the Corporation, the Department questioned whether $120,909 should have been

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