Pr. George's audit finds flaws in U.S. housing grants' use
Friday, December 4, 2009
A Prince George's County government audit released this week found significant procedural failings in how millions in federal housing grants given to area nonprofit groups were spent and overseen.
The report by the county's Office of Audits and Investigations, which reviewed fiscal 2004 through fiscal 2008, examined more than $4 million given to 15 nonprofit groups known as Community Housing Development Organizations, or CHDOs. Such groups must be certified by the county to receive federal dollars from the U.S. Department of Housing and Urban Development's HOME Investment Partnerships Program, which funds affordable-housing projects.
The audit revealed that progress reports on the housing projects were not submitted by the nonprofits in 67 percent of reviewed cases, and in many cases it was unclear whether the housing project sites were visited by county staff. Also, more than half of the expenses submitted by the groups for reimbursement reviewed in the audit lacked supporting documentation.
All the groups were certified by the county, but auditors could not find sufficient documents supporting the certifications in 14 of 15 cases, according to the report and county officials.
Housing Director James E. Johnson and the county executive's spokesman acknowledged the problems Thursday and said steps are being taken to address them.
"The Department of Housing and Community Development is taking great strides in reforming the agency," said James P. Keary, spokesman for County Executive Jack B. Johnson (D). "They agreed with the recommendations made by audits and investigations and have even detailed the remedies in their response."
Asked to identify the 15 groups Thursday by The Washington Post, the county would not. Keary said housing officials needed more time. A HUD spokesman did respond to a request for comment.
The audit is the latest example of the county's housing department troubling administration of federal money earmarked for affordable housing. In October, the agency nearly lost more than $5 million in HOME funds. The county had two years to designate the funds and inform HUD by the end of October how it planned to use the money, and it almost allowed the money to expire.
A report issued by HUD showed that as of June 30, Prince George's was rated in the bottom third among localities for how they handle HOME funds. The ranking looked at criteria that included what percentage of the more than $44 million the county received since 1992 had been allocated and spent.
Last year, another county audit found that a former member of the board of a nonprofit, the Prince George's County Community Development Corporation, obtained $25,000 in affordable-housing funds without the board's knowledge. The state's attorney's office is conducting an investigation with HUD in connection with the incident, said Ramon Korionoff, spokesman for Prince George's State's Attorney Glenn F. Ivey.
The county's housing director during the period the audit reviewed, Thomas M. Thompson, was fired by the county executive in June 2008. James E. Johnson took over the agency later that year as acting director and has since been sworn in as director.
Housing projects that receive HOME funds are approved by the County Council. On Thursday, County Council Chairman Thomas E. Dernoga (D-Laurel) said that he was not surprised to hear of the recent findings but that he hopes a recent leadership change in the agency will bring improvement.
"The County Council . . . has raised concerns about the operations of the housing department for a number of years," Dernoga said. "It is good that the audits and investigations office did what it is supposed to do . . . I am hopeful that new leadership at the department will ensure that these recommendations are implemented expeditiously, as they have agreed to do."
Dernoga was referring to a memo attached to the audit dated Nov. 4, in which then-acting housing director James Johnson agreed with the findings and recommendations made. The memo states that the department had created a new, "comprehensive" checklist for certification and re-certification of the CHDOs, which requires the signature of several county officials. The memo also says the department is in the process of upgrading the "Central Filing System" for its HOME programs and has made improvements to how it tracks expenses.
According to the report, CHDOs are "private nonprofit, community-based service" groups which primarily develop affordable housing in their communities. To be certified, the groups must meet certain legal and organizational criteria, the report states.
"Proper documentation is essential to ensure the transparency, continuity, and reliability of public processes," the report states.