Federal housing officials have uncovered administrative problems at the city's Department of Housing, requiring the city to refund $6.2 million in federal block grant funds.
In an in-depth audit, city housing officials were faulted for using improper accounting procedures and poor recordkeeping for some programs.
The Inspector General's Office of the U.S. Department of Housing and Urban Development conducted the audit at the request of the Baltimore HUD office after numerous disagreements with city officials over financial issues, said Jim Kelly, spokesman for the local HUD office.
The audit, begun in 1992 and performed by HUD's regional branch in Philadelphia, reviewed four years of records, 1988 to 1991, and found no wrongdoing on the part of city officials.
The final audit report was issued last month and the city plans to appeal some of its findings.
"We may have to duke this out in court," said city Housing Commissioner Daniel P. Henson III, speaking yesterday at a news conference held to announce a number of Housing Department initiatives.
The city Housing Department, by documenting some expenditures, was able to get its original $7.6 million bill reduced to $6.2 million, pending approval of documentation to be submitted, said federal officials.
Henson said it is difficult to dispute some of the findings because key people are no longer around. Henson said the city has made changes in accounting procedures and documentation as a result of the audit report.
If the Housing Department is unsuccessful in its appeal, as much as $6.2 million from the city's general fund would have to be refunded to the city's community development block grant fund.
More than half of the money in question, or $4 million, is related to the city's using block grant funds to help pay salaries for city building inspectors. In return for doing so, federal regulations require that a portion of building permits and other fees be paid into the city's block grant fund, said Joseph O'Connor, acting community development director for the local HUD office. Instead, the city has deposited all such fees in the general fund.
Henson disagrees that the city should be penalized for this practice: "We believe HUD is just flat-out wrong on this."
Among the other expenditures called into question for lack of documentation or other problems are: $300,000 for the housing weatherization program, $130,000 allocated to the now-defunct Park Heights Street Academy, an alternative school, and $1 million for the Council for Equal Business Opportunity, or CEBO.
Henson said further documentation may be provided on the weatherization program. However, the city lacks documentation on the other programs, he said.
The first step in the appeal process is an informal Washington hearing with HUD officials. If necessary, the city could then appeal to an administrative law judge at HUD and then to U.S. District Court.
At the news conference, Henson also announced the following initiatives:
A Henson-appointed committee, mostly city department heads, will make recommendations regarding a proposal to give tax breaks to owners of vacant downtown office buildings that are converted to residences.
Henson plans to double the number of housing authority residents enrolled in city Housing Department job training programs to 2,000 this year.
Pub Date: 1/15/97