Audit faults housing agency $2.5 million lost to mistakes in procedures.

January 28, 1992|By Thomas W. Waldron

Inadequate credit checks and lax collection procedures at Maryland's housing agency may have cost the state more than $2.5 million, a new legislative audit concludes.

The state Department of Housing and Community Development failed to monitor some programs, kept some inadequate records and violated some of its own internal controls, the report by the legislature's Department of Fiscal Services concludes.

Housing Secretary Jacqueline H. Rogers angrily denounced the audit yesterday, calling it misleading and often inaccurate.

The audit, which covered the years 1987 to 1990, found no cases where housing funds were misspent. But among its findings was an instance in which procedures were not followed.

In that instance, the department has had to repay more than $2 million on a loan it insured for the developer of a $14 million city housing project that now is in default.

The department failed to follow some of its underwriting procedures and didn't make sure that the developer was capable of managing the project once it was built, the audit concluded.

In the case, housing officials acknowledged some lapses in procedure and said the problems are either corrected or will be soon.

Ms. Rogers disputed many other findings. In fact, she took the unusual step of calling a news conference to rebut the audit before it was officially released.

She accused the legislative auditors of "harassment."

William S. Ratchford 2nd, director of fiscal services, defended his auditors, saying the audit was no different in approach or tone than others the department has done.

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