By Darryl Fears
Washington Post Staff Writer
Sunday, January 10, 2010; C04
Federal housing officials ended their threat to withhold $12.2 million in AIDS funding from the District because of concerns over the city's oversight of money issued to nonprofit programs that deliver services to residents affected by the disease.
In a letter Thursday to Mayor Adrian M. Fenty (D), Housing and Urban Development Assistant Secretary Mercedes Márquez wrote that "the findings and concerns identified in the monitoring report are closed."
The report said the District Department of Health failed to issue a timely audit for 2008 as required by law, was not reviewing audits from organizations that received program grants, and submitted incorrect federal cash transaction reports for several years starting in 2005.
The agency's concerns were addressed in meetings involving Márquez, council member David A. Catania (I-At Large) and D.C. HIV/AIDS Administration Director Shannon L. Hader. Catania, chairman of the council's health committee, held a series of Friday hearings with Hader and city Department of Health Director Pierre Vigilance to resolve the issues.
The hearings determined that the city's audit was delayed in part because the chief financial officer's office had not established a procedure for reviewing information submitted by the Health Department, Catania said.
Márquez commended the city's actions in her letter, which also notified Fenty that HUD was forwarding the $12,213,518 Housing Opportunities for People With AIDS grant agreement to the city, allowing it to withdraw money for programs.
The loss of the funding would have affected jurisdictions outside the city. The District shares the $12.2 million with Arlington, Fairfax and Loudoun counties, as well as with Prince George's County, which oversees services in much of Southern Maryland. Separate HUD reports on site visits and technical assistance also raised concern about AIDS programs in some of those jurisdictions.
The federal money is crucial in the District, which has about a three-year waiting list for housing for indigent people with AIDS. A report last year determined that the HIV/AIDS prevalence rate was at least 3 percent -- affecting about 15,000 adult residents -- the highest in the nation. The rate was determined after an aggressive HIV testing drive matched only by two other major cities.
In October, a Washington Post investigation identified deficiencies in the services delivered to people with HIV and AIDS. Some nonprofit groups failed to file tax returns or secure a business license. Others submitted employee résumés with false information and spent hundreds of thousands of dollars on travel and executive salaries.
The Post investigation revealed, for instance, that one group, Miracle Hands, had a threadbare operation in spite of receiving millions of dollars in funding. As part of the monitoring report, HUD demanded that Miracle Hands return more than $7,000 before it would release the housing funds.
Last year, the city returned more than half a million dollars in AIDS housing funds to HUD for failing to address problems raised by HUD monitors in 2003 and 2006.