Wednesday, December 10, 2008

Affordable Housing Office Scandal

The Hillsbororough County Commission requested the County Internal Performance Auditor investigate why the Affordable Housing Office lost $2 million in grant money. The CIPA released it's report.

Based on our review and analysis, the County’s affordable housing assistance programs have historically been plagued with unprincipled management and business practices. Many of the problems date back before 2003. The very nature and demonstrated susceptibility of housing assistance programs nationwide to misappropriation, corruption and greed requires that County Administration establish effective controls and oversight. It is imperative that specific controls be installed and enforced that provide assurances that dignity and integrity prevail with all housing programs; grant funds are adequately safeguarded; and business practices are authentic, legitimate, and transparent.

Hillsbough County ranks 516 out of 54 in national HOME funding. This is due to years of mismanagement and poor oversight. The AHO had a "laissez-faire" attitude about committing matching funds. Things were so bad that the AHO couldn't keep up with it's bookkeeping records. The kicker is the corruption.

Beginning in 2001 the Community Improvement Department (CID), the housing agency at that time, began a cycle of failing to commit all HOME grant funds. To prevent immediate losses of grant funds that had accumulated during their tenure, it appears that former County housing managers entered speculative or bogus projects in the Federal tracking and reporting system in 2004, 2005 and 2006, committing grant funds that set idle and unused because the projects never materialized. This practice is unauthorized and went undetected by HUD for several years. When these projects were identified and removed from the Federal tracking and reporting system in June 2007 it put the County’s housing program out of compliance with HUD requirements for timely commitment.

The AHO is under investagation by U.S. Attorney Robert O'Neill. The report shows former AHO director Howie Carroll was involved in corruption. The AHO received $16 million last year. Carroll used part of the money for Little Manatee Housing Corporation and Rainbow/Oasis Apartments. Little Manatee Housing Corporation and Little Manatee Housing Corporation did not qualify for funding.

Additionally, HUD-Jacksonville, during a September 2007 monitoring review, determined that a County’s affordable housing project, Rainbow/Oasis, was out of compliance with Federal requirements. In September 2006 the County removed the lien requirement on the owner of the project and allowed the sale of the project to accommodate non-eligible tenancy. The funds were previously committed by the County’s housing agency in 1997, paid for, in part, with County HOME grant funds. The rehabilitation project was completed in February 2001. HUD requirements prohibit the sale of federally-funded housing projects before the expiration of the affordability designation period, in this case 10 years, or until the year 2011. As a result of this ineligibility, the amount of HUD’s participation in the project ($731,511) was uncommitted and is included in the current shortfall. HUD did not require repayment of these funds as it did in the case of Little Manatee but a different financial/reimbursement arrangement was made to account for the funds. This event is discussed in greater detail on page 75 of this report.

The renovation of Rainbow/Oasis was completed in 2001. Yet, it was still receiving federal funding. The county was forced to pay back $200,000 for Little Manatee. This is a major story. I hope the media gives the provides coverage.

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