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HUD audit finds fund questions

Although a federal investigation into a claim that Ironton city officials misused HUD money shows the original source of information was inaccurate, auditors did leave town asking serious funding questions.

Wednesday, December 13, 2000

Although a federal investigation into a claim that Ironton city officials misused HUD money shows the original source of information was inaccurate, auditors did leave town asking serious funding questions.

The U.S. Department of Housing and Urban Development audit began after an anonymous hotline complaint alleged the city misused Community Development Block Grant money based on the information received from the HUD 2020 Internet map.

Teams from the HUD Inspector General’s Office launched a 14-month audit process, which involved an extensive eight-month period of sifting through mounds of old paperwork in the community.

Federal investigators reviewed all records relating to HUD funding over an eight-year period, but neither city officials nor officials of the Ironton Lawrence County Area Community Action Organization were found to be responsible for the faulty map information, CAO community development director, Ralph Kline said.

"That was the lead in their executive summary," Kline said. "They are saying that the (map) information there was meant to be in general terminology, not exact locations."

Kline said the audit team was able to track every federal dollar that was spent.

"Our experience was that during the eight months they had a HUD team here, they examined every document they could," he said. "They looked at everything that came through under the block grant fund. There were no funds unaccounted for."

HUD’s assistant district inspector general Heath Wolfe of the Chicago, Ill., federal Office of Audit agreed with Kline, adding that the original allegation was the misuse of funds.

As supervisor of the Ironton audit, Wolfe said investigators questioned some costs associated with several rehabilitation projects.

"We did find HUD’s 2020 map to be incorrect," Wolfe said. "However, we found that the City of Ironton misused over half a million in federal funds. We consider that serious."

Over the eight-year period, from October 1992 to June 2000, the city received more than $3.6 million in block grant funds, of which, an "estimated 14 percent was misused," he added.

Kline said caution should be used to interpret the term "misused," adding it can often become misconstrued.

"The term is more of an auditing term," he said. "In reality, they are saying there are technicalities we have to go back and address and you have to be very careful when you talk figures in this – in particularly, when you consider a situation where a homeowner allowed their hazard insurance policy to lapse or a document of some kind is missing, which results in a $15,000 to $20,000 finding they term as ‘misused.’"