More than $300,000 worth of food stamps and cash are missing from the accounts of a Southeast credit union that sold the stamps under contract with the D.C. Department of Human Resources, according to federal and DHR officials.
The contract with Friendship House Community Federal Credit Union, at 536 8th St. SE., as a food stamp distributor was canceled on Jan. 31 after the deficit was discovered, according to Ulysses Banks, DHR deputy administrator of payments assistance.
In a Jan. 31 letter canceling the credit union's contract, DHR also demanded restitution of the funds and coupons within 15 days, Banks said. He said the deficit of $337,727 has not been made up.
"We are holding Friendship House totally responsible and we are looking to them to bring in restitution," Banks said.
According to Banks, it has not been decided whether actions to collect the funds will be taken by DHR or by the Department of Agriculture, which administers The National food stamp program for needy families.
Officials of the credit union could not be reached for comment, and telephones at their office were not answered yesterday.
Warren Morris, manager of the credit union, is on leave and has announced his intention to resign, according to Shirley Grasty, director of the American Federation of Community Credit Unions.
Grasty, whose organization includes Friedship House, said the resignation was unrelated to the missing funds and stamps. She said the credit union has been searching its book for an answer to the deficit, and that it is probably "just a paper error."
Bonnie O'Neil, assistant director of the Agriculture Department's Food and Nutrition Service, said her agency was aware that DHR billed the credit union for the missing funds in December.
"We don't know what the status is, but we will be checking on this," O'Neil said. However, Friendship House was not among 10 District credit unions that were reported by Agriculture as owing more than $800,000 is food stamp money last January.
Established in 1965 as an adjunct to the nearby community center of the same name, the credit union has since become an independent operation, according to Pete Ward, head of Friendship House.
Banks said the credit union was one of 53 outlets in the city that distribute food stamps under contract with DHR. It served about 2,000 families who purchased an average of $125 worth of stamps monthly. Banks said the families have been reassigned to other food stamp centers close to their homes.
Banks said DHR has in the past discovered that such deficit resulted from poor bookkeeping by distributors, but that they are entirely responsible for accurate record keeping.
DHR has has a series of problems with its food stamp operations in recent months. Two church officials were convicted last September of embezzling more than $250,000 in food stamp coupons and receipts.
In addition, the Agriculture Department last month charged that DHR improperly raised its administrative fees to food stamp distributors, form 75 cents to $1 per transaction, during 1976. DHR was ordered to repay about $13,000 in federal funds that were allgedly misspent as a result of the fee increase.