City auditor finds Park Heights Corp. misused more than $60,000 Audit report says organization used federal funds to pay cash advances.

August 27, 1991|By Joan Jacobson | Joan Jacobson,Evening Sun Staff

The city auditor has found the now-defunct Park Heights Community Corp. misused more than $60,000 in federal money by paying cash advances to employees, by claiming bogus office expenses and by paying for an out-of-town trip and auto repairs.

An audit report released yesterday by city auditor Allan L. Reynolds notes a continuing history of financial problems at the northwest Baltimore organization, dating back six years.

In January, the city's Department of Housing and Community Development closed down the community corporation, following allegations of financial irregularities and infighting.

The group, which provided housing, sanitation and energy assistance to some of the poorest communities in northwest Baltimore, was financed with a $215,000 annual grant from the federal Community Development Block Grant program.

While city auditors have been sifting through the corporation's financial documents, the city state's attorney's office also has been investigating the group.

According to the audit, the state's attorney's probe has discovered a former president of the community corporation cashed an insurance refund check of $2,500 for an accident involving the group's van.

The president was allegedly reimbursing himself for out-of-pocket costs to repair the van, but "no accounting of those costs was ever made by the president of the corporation," said the audit. Reynolds refused to identify the president. The organization had three presidents in the past year.

Isaiah C. Fletcher Sr., the last executive director of the corporation, was informed about the findings of the audit in June, according to the audit report. However, Fletcher has a non-published number and could not be reached for comment.

The audit, based on a sampling of the group's financial records, also recommended that the city attempt to recover about $57,000 of the misused funds.

But Reynolds said the group does "not appear to have enough resources to pay that amount of money back."

He said he did not know how much money remains in the corpora

tion's bank accounts.

Reynolds said he did not know what the city plans to do to recoup the money.

The audit found:

* The organization made a "significant number of cash advances to employees." Although most of the advances were repaid, $5,212 were still outstanding as of Jan. 11, the date the city housing department shut down the center.

* The community corporation erroneously reported to the city that it had spent $14,225 on rent, gasoline as well as legal, auditing and computer services that were actually never paid. The group reported that

it paid rent of $10,000 over a two-year period to the city for office space, but the city never received the money, said Reynolds.

* The group improperly used federal funds to repair a vehicle and to finance a trip to New Jersey. Reynolds would not say why anyone from the organization went to New Jersey.

* The corporation exceeded its budget by $30,442 for the amount of salaries and fringe benefits charged to the federal block grant program.

* While reviewing a sampling of the organization's expenditures, auditors could not find vendor invoices for $7,035 in canceled checks.

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