Guest what - Lake County has an affordable housing grant - I hope they are better at following the rules than this city, Montebello, California, which LIED about the project being complete when construction had not even started. One reason to worry is that Lake's Board of County Commissioners make it very hard for the separate Auditor in the Court Clerk's office to do performance audits of programs, AND they don't have their own controller type person to ensure accurate accounting is used. Yes, they have a budget manager, but not a Controller. The accounting is done separately in the Court Clerk's department, and their manager does not exercise Controller functions over the BCC.
Remember the RECENT problems with the SHIP program (grants to remodel houses of poor people). That got in the news when the manager of the program was letting relatives and criminals get the loans?
However, another issue could also be the cause in Montebello - many cities in that area are now run by Mexican immigrants, and they hire their own relatives to do much of the work in the cities. I used to live in Southern California. The hispanic officials are not educated and do not always follow government rules. I had a controller friend in a nearby city where all the elected officials were hispanic. They kept pressure on to hire all their relatives and hometown friends, so the five Senior "White" administrators cut a deal to all take early retirement with severance pay so the officials could do what they want. That is how towns are run in Mexico, and this might the the case here.
vj
Auditors for the U.S. Department of Housing and Urban Development
recommend that Montebello repay $1.3 million in federal funds, plus
interest, because the city didn't properly use an affordable housing
grant, according to a report released Monday.
"These are very serious findings," said Bill Vasquez, director
of HUD's Office of Community Planning and Development, which oversees
the HOME program regionally. "We'll be looking at it further to see if
there's any way this can be mitigated but based on all the evidence so
far, this is significant."
James Todak, agent in charge for HUD's Office of Inspector
General for Investigation, said his office has opened an investigation.
"We're looking into that matter," said Todak, whose office
handles criminal probes. "We're not commenting on any open
investigation."
Montebello City Attorney Arnold Alvarez-Glasman said Monday
evening he had just received a copy of the report and couldn't comment
in detail.
"The city will review the allegations and findings," he said.
"The city takes these matters very seriously and recognizes that if
there's any action on the city's part, we will evaluate those actions after a thorough review with the City
Council and also with HUD."
Interim City Administrator Randy Narramore and Planning and
Community Development Director Mike Huntley didn't return phone calls
seeking comment.
Montebello received a draft of the audit in May. In a June 14
letter of response, Narramore disputed its findings.
"While raising some important points, the draft audit contains
numerous statements and conclusions which we believe to be inaccurate
or simply wrong," Narramore wrote.
In November 2006, $1.3 million in HOME funds were committed
toward acquisition of property near Whittier Boulevard and South Sixth
Street for a proposed 62-unit development with 10 affordable dwellings,
but the project fell through, according to the HUD audit.
The funds weren't withdrawn until June 2008, then in February
2009 the money was given to a second developer - Danny Ku of Ku and
Associates - as a forgivable loan, according to the report.
While Montebello reported the project had been completed, a
HUD inspection of the site found no project had been started, according
to auditors.
As a result, the city's affordable housing needs weren't met
and "the project's status was misrepresented to HUD," according to the
report.
Projects should commence within about 12 months of HOME fund
commitment, according to the audit. HOME funds must also be spent within
15 days of withdrawal, according to the report, but because the city
waited eight months to disburse the money to Ku, the auditors
recommended Montebello repay the $1.3 million, with interest.
An owner participation agreement (OPA) submitted by Montebello
to HUD had signatures that "inappropriately appeared to be cut and
pasted" from another document, according to the HUD report.
"They basically drew (the HOME money) down without having the
appropriate commitment documentation signed and then held on to it quite
awhile," said Vince Mussetter, assistant regional inspector general for
audit. "They still haven't begun construction on the project."
Upon further inquiry, Montebello admitted the owner
participation agreement had actually not been approved, according to
auditors.
However, Narramore wrote to HUD last month that Montebello
"acted in good faith to implement the intent and requirements of the
HOME program and associated regulations."
Narramore blamed delays on a poor housing market and wrote
that he felt asking the city to repay the HOME money was overly harsh.
He also said the project is still expected to move forward.
Ku, whose office is in Walnut, said he's waiting on the city
for entitlements on the property, which must be in place before the
project can move forward.
"I just do my part and I have an agreement which I'm abiding
by," Ku said. "Like all businessmen we want to get it done."
HUD's Office of Inspector General and Office of Community
Planning and Development will begin coordinating corrective action with
the city, said Tanya Schulze, regional inspector general for audit.
Montebello has been struggling financially and last year had a
$4 million operating budget deficit. Close to 40 employees were laid
off, took furloughs or retirements, and a fire station was shut down to
save money.
562-698-0955, ext. 3028
Auditors
recommend Montebello repay HUD $1.3 million, plus interest
Read more: Auditors
recommend Montebello repay HUD $1.3 million, plus interest - Whittier
Daily News http://www.whittierdailynews.com/news/ci_15500863#ixzz0tYrMWdRY
