The Southwest Community Federal Court Union, 401 M St. SW, actually has paid the federal government $106,000 due from the sale of food stamps here. An Agriculture Department spokesman said erroneously that this money was still owed, a statement that was reported Tuesday in The Washington Post.
The District government may have to repay the federal treasury more than $800,000 that is missing from or owed by 10 city-licensed sellers of food stamps, according to U.S. Agriculture Department investigators.
Among the unaccounted for food stamp funds is nearly $300,000 missing from two now defunct establishments that sold food stamps - a furniture store and a credit union - that are now being investigated by a federal grand jury here.
The District also will have to reimburse the federal government for what it is unable to recover of $250,000 that two clerics of St. Phillip's Pentecostal Church were coinvicted in September of swindling from the food stamps they sold.
In addition, Agriculture Department auditors report that at least $294,000 is owed the government by seven other present and former food stamp sellers - including six neighborhood credit unions - that are not facing criminal action.
An Agriculture Department audit has found evidence that the D.C. Department of Human Resources, which has responsibility for overseeing the food stamp program here, has disregarded federal regulations in choosing these food stamp sellers.
As a result, the federal government could stop paying all or part of the $490,000 it now gives the city as its 50 per cent annual share of the administrative cost of the District food stamp program, an Agriculture Department official said.
Most of the abuses and irregularities among District food stamp vendors were uncovered after a nationwide investigation was undertaken last winter by the Agriculture Department of 6,700 food stamp outlets - including 12 in the District - suspected of not returning food stamp receipts on time.
"The situation in the District was among the most serious disclosed," another Agriculture Department official said last week.
Bertrell L. Hallum, administrator of DHR's Payments Assistance Administration that is responsible for overseeing the food stamp program in the District, declined to comment on the findings of the federal auditors except to say, "I think we are operating under general compliance" with federal regulations.
The federal investigation of the food stamp program here was not aimed at the more than 40,000 food stamp purchasers in the District who pay a fixed amount each month and receive bonus coupons, depending on their net income and number of dependents, that supplement their food budgets.
Instead, the auditing by the Agriculture Department focused on most of the credit unions and other nonbanks here that sell food stamps to qualified purchasers. Of the 54 sellers in the city, 39 are banks, three are District government offices and most of the rest are credit unions.
Only two of these establishments currently are under investigation by the federal grand jury, according to investigators. One is the former Xavier furniture store, previously of 1401 North Capitol St., from which $203,724 allegedly is missing.
The other is the defunct D.C. Business Federal Credit Union, where federal auditors found $88.451 missing. Charted in 1969, this credit union was placed in involuntary liquidation in 1975 by the National Credit Union Administration, the federal oversight agency, after fund shortages and mismanagement were uncovered. It had an office South Capitol Street.
According to Bonnie O'Neil, assistant to the director of the Agriculture Department's Food and Nutrition Service, which oversees the food stamp program at the federal level, the following present and former food stamp sellers in the District are being billed for the following sums:
The Change Federal Credit Union, of 1413 Park Rd. NW, which owes $127,584 and was terminated as a food stamp seller in 1974.
Southwest Community Federal Credit Union of 401 M St. SW, which owes $106,000.
Armstrong Neighborhood Federal Credit Union, of 1502 North Capital St. NW, which owes $20,844.
Fides Community Federal Credit Union, of 722 7th St. NW, which owes $23,085.
Far East Federal Credit Union, of 622 Division Ave. NE, which owes $16,290.
American Federation of Community Credit Union, of 2436 1/2 18th St. NW, which owes an unspecified amount.
According to the Agriculture Department, most of the at least $294,000 in owed funds in which no criminal charges are pending involves "lapping," the term used to describe the practice of many food stamp sellers of deliberately running late in repaying government funds thereby building up large sums held without paying interest to the government.
Since the Agriculture Department probe, one District food stamp seller Anacostia Southeast Federal Credit Union, of 1918 Martin Luther King Ave. SE, has reimbursed the federal government $129,601, Ms. O'Neil said.
Two other food stamp sellers who were audited, Friendship House Community Federal Credit Union and Hospitality Community Federal Credit Union, were found to have all funds accounted for, she said.
In September Bishop Lucius S. Cartwright, 33, and the Rev. Albert R. Hamrick, 40, of St. Phillip's Pentecostal Church, at Wheeler Road and Barnaby Street SE, were each sentenced to six months in prison an fined a total of $7,000 for stealing more than $250,000 in food stamps funds they had collected from stamp purchasers.
According to an interim report of a current audit of the District food stamp program by Agriculture Department investigators, licenses to stamp sellers "were not awarded in accordance with prescribed Food and Nutrition Service procedures. The resulting increased costs to the federal government may be disallowed."
The current audit was asked to look at how the D.C. Department of Human Resources was selecting food stamp sellers after complaints were received from Stanley S. Walters, president of Financial Transactions Corp., a check-cashing business that was first authorized and then halted by the city from selling food stamps.
Financial Transactions Corp. has filed a suit asking $168.018 in damages from the city, claimed it was discriminated against when the District decided to grant food stamp sales to many credit unions that were charing $1 per transaction while it was ready to do the work for 75 cents a transaction.
Walters said an interview that the District's decision to pay 25 cents more for the same service has cost the city tens of thousands of dollars. Hallum declined to comment on the Financial Transaction Corp. suit.
Though a $1 fee to food stamp sellers for each transaction is said by an Agriculture Department official to be a number or comparable cities. The nation, it is less than is charged in close to the average charged around.
In Chicago the food stamp seller's fee is 85 cents a transaction. In New York City, it's 80 cents. In Baltimore it averages 75 cents. In Philadelphia, it is only 40 to 45 cents, less than half the cost here.