Regulation by Strangulation?

December 06, 1990

Municipal officials seem incensed that the U.S. Department of Housing and Urban Development, having itself been tarred and feathered for a series of costly scandals, has lambasted the city for lax administration of community development block grants. Unless the city provides satisfactory explanations to Washington, it may be forced to repay $2 million.

Is this legitimate criticism? Or is it, as one ranking city administrator suggests, "regulation by strangulation"?

While the 74-page HUD report repeatedly talks about "serious problems," these relate to the city's compliance with federal rules. There is no suggestion of corruption or criminal mismanagement. And while the target of the criticism is Baltimore City, most of the grant activity under review predated Mayor Kurt L. Schmoke.

Mayor Schmoke and Housing Commissioner Robert W. Hearn should not ignore the HUD report, however. It's one thing for federal auditors to demand retroactive documentation for housing projects which previously never required such paperwork. It is quite another thing for Maxine S. Saunders, the local HUD manager here, to accuse Mayor Schmoke of refusing to meet with her to discuss the federal report before its release.

That such a meeting did not take place was politically dumb -- even if the mayor felt the audit referred to the deeds of prior administrations or that the matter should be handled by Dr. Hearn. In particular, Mr. Schmoke ought to be alarmed by HUD's conclusion that "our findings and judgments raise serious questions about the city's capacity to administer its program resources effectively and efficiently."

In preparing the report, HUD auditors visited every agency in city government and every unit in the housing department charging salary costs to community development block grants. Some of their objections are nit-picking, but many of their observations are worth considering.

For example, auditors wonder why both the planning department and the housing department have employees performing essentially the same duties. "We cannot determine that it is either necessary or reasonable to pay salaries for two planning staffs," the auditors write. "The city should review the functions of both staffs and, where duplications exist, it may wish to eliminate them." In these tough budgetary times, that's the kind of advice Mr. Schmoke should embrace, not ignore.

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