HUD official denies blame for the slow housing grants
Published 11:35 pm Saturday, December 2, 2006
A U.S. Department of Housing and Urban Development says the agency is not responsible for the alleged slowness of processing grants for a Mississippi housing program.
“We feel as though our audit efforts have in no way contributed to the delay of the disbursement,” said Ken Donohue, HUD’s inspector general.
Donohue joined State Auditor Phil Bryant on Friday in Biloxi for a forum on post-Hurricane Katrina issues.
HUD has provided $5 billion for Katrina relief. Gov. Haley Barbour named the Mississippi Development Authority to oversee the distribution of housing grants to hurricane victims.
Bryant, who is in charge of prosecuting fraud associated with the Homeowner Grant Program, has agreed with Barbour that federal audits are one reason grant checks have been slow to reach homeowners.
“(The state) said, ‘OK, we’ll sign the contract, give us the money, we’ll do all those things,”’ Bryant said Friday. “Now people are saying, ‘Hurry up. You gotta get the money out.’ I even hear people on the federal level saying, ‘You got to get that money out.’ Well, it’s the federal guidelines that are applying to MDA that are slowing the process down, and rightfully so.”
Bryant and Donohue agree that fraud prevention is necessary.
“If you don’t have those internal controls and safeguards on the front end, you’re going to see so much of this money stolen and defrauded,” Bryant said. “In some ways, it may slow the process down. But to slow down the process to eliminate fraud is a bargain. We want (the money) to go to homeowners who deserve it and are qualified for it.”
However, Bryant said fraud prevention is contributing to “less than 5 percent” of the grant program’s slowness.
“The amount of fraud that is occurring is so small, it’s astronomical,” he said.
Bryant said his office is working 40 active cases of fraud. Some 385 applications have been suspected of being fraudulent, Bryant said.
“It is our job to track those people down and hold those people accountable,” Bryant said. “We think we’ll be going to the grand jury before the end of the year. We’re going to be ruthless in our prosecution,” he said.
State and federal officials are still trying to find a balance between protecting against fraud and quickly distributing the money to homeowners, Bryant said.
Bryant said grant applicants have contributed to the slowness of the program.
“A lot of (the problem) is, if you look at the individual applications, they’re not completed properly or there is not adequate information provided, so we have to go back to the applicant and ask for additional information,” he said.
The grant program picked up speed after the state made numerous changes, which were prompted by homeowners’ and elected officials’ complaints.
As of Friday, about 6,000 grant checks had been paid to more than 17,000 homeowners who applied for the Homeowner Grant Program last April, according to the MDA.
Donohue said it has not been determined whether the state is administering its $5 billion in the right way. Results of a federal audit that is expected to be completed early next year will provide the final answer, he said.
“The story is yet to be told,” Donohue said. “That’s why we’re engaged now, to make sure that the program, at least from HUD’s standpoint, is done in an appropriate and effective way.”
Donohue said one of his concerns is that “the overall intent and purpose of the entire funding is collectively served for the community.”
“For example, slum and blight and these things,” Donohue said.
Bryant would not say whether his office is planning to audit MDA or a state contract awarded to two state lawmakers.
Sen. Tommy Robertson, R-Moss Point, and Rep. Jim Beckett, R-Bruce, could earn up to $1.2 million by finalizing grants for homeowners in Jackson and Harrison counties. They hired Rep. Jim Simpson, R-Long Beach, to help in Harrison County.
The lawmakers are named in a complaint filed with the Mississippi Ethics Commission that questions whether they violated the state Constitution by bidding on a state contract.
“I wouldn’t want to directly say that we are (investigating), because we don’t talk about individual cases or reviews,” Bryant said. “But I will say that we will review all of the money that is spent, whether it’s a contractor or the homeowner or someone contracting with the homeowners. I don’t want to indicate that we are (investigating.)”
Asked whether it is his job to audit the lawmakers’ contract, Bryant said, “It is not.”
Donohue also would not say whether his office is investigating the contract.
“I’m aware of the matter,” Donohue said. “But any matter like that, we won’t comment one way of another on it. I’m fully aware of it.”