October 1, 2010
HUD audit recommends Deerfield Beach reimburse agency more than $200,000
City did not report to HUD relationships of two commissioners to groups receiving money
By Larry Barszewski
Deerfield Beach — A federal audit says the city should reimburse the Department of Housing and Urban Development $224,742 for grants awarded to two groups that each had ties to a city commissioner.
The audit said another $170,546 in federal funds should also be reimbursed if the city cannot provide better documentation concerning the expenditures.
The audit by HUD’s Office of Inspector General found the city awarded HUD funds to two organizations connected to city officials without telling HUD because “the city lacked effective management controls to ensure compliance with HUD’s conflict-of-interest regulations.”
“As a result, HUD had no assurance that the city did not practice favoritism in the awarding of the funds,” said the audit, released this week.
The awards went to the Haitian American Consortium and the Westside Deerfield Businessmen Association.
The consortium listed Commissioner Sylvia Poitier’s dry-cleaning business as the group’s corporate address, but Poitier in 2009 voted in favor of two awards totaling $42,211 to the group. Former Commissioner Gloria Battle also voted for one of those awards, even though she was designated as a project director of the group.
Regarding the Westside business group, Poitier abstained from a vote awarding a $215,975 grant to the group because her daughter was its executive director, but the city never disclosed that relationship to HUD, the audit said.
The audit said HUD should seek reimbursement of the money spent on the two groups and that $33,444 of the money not yet disbursed to the Westside association should be put to better use.
Armando Fana, director of HUD’s Miami field office, said his office would review the audit’s findings to see if any issues can be resolved that would keep the city from having to pay some of the funds back, and to see if some technical assistance will help prevent similar problems in the future.
Battle said she did not realize the Haitian consortium was receiving money in the item when she voted for it. When she realized her potential mistake and queried the city attorney, she said she was told she was required to vote.
“I helped put that group together and I knew that would be a potential conflict,” Battle said. “At no time during HUD’s investigation did HUD contact me.”
Poitier could not be reached for comment despite several calls made to her phone on Friday. City Attorney Andrew Maurodis declined to comment on the report.
Blogger XXXXX, who has made a career recently of going after Poitier and Battle, said the audit vindicates his efforts.
“I believe this is only the start of it,” XXXXX said. “We used this one issue as an example, but there are many issues just like it.”
The audit is not so much about Poitier and Battle, but why the city didn’t inform HUD of the potential conflicts of interest and seek the proper waivers.
The city already has addressed some problems within its community development division that handles the HUD grant money. The division’s two coordinators were laid off and the division has been reorganized and placed under the city’s senior services department.
“I think there’s going to be more accountability under the [department] it’s under now,” Mayor Peggy Noland said. “I think they’re going to be more attuned to what can be done and what can’t be done.”
This may not be the last report from HUD. In April, City Manager Burgess Hanson forwarded HUD a forensic audit report done at the city’s request that alleged there were “significant internal control breaches” and “suspected fraud” in the community development division and with program recipients.
Those issues brought up by forensic auditor Michael Kessler are separate from the latest HUD audit. HUD officials said they could not comment on any other ongoing investigations. If any criminal investigation were being conducted, its results would go to the U.S. attorney for any potential actions, officials said.
In addition to the conflict-of-interest matters, the HUD audit also found the city billed $142,148 in staff salary time to HUD programs in 2008, without providing sufficient documentation.
“In some instances, the city allocated up to 95 percent of an employee’s salary to the program,” the audit said.
Also, another $28,298 in housing assistance in 2008 was given to a person who owned other property at the time of the application, without the city including that property in the person’s annual income as required to determine eligibility, the audit said.