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What's an audit for?; Answers lacking in how CDCs used block grants.

Last year, in the wake of a scathing audit of Worcester's federal block grants to several community organizations, then-Worcester City Manager Michael V. O'Brien noted that as much as $2 million in federal money might have to be repaid.

A year later, interim City Manager Edward M. Augustus Jr. is signaling that all is forgiven. The six housing groups that failed to provide appropriate documentation for the funds under their control have been told they won't have to repay any of the money.

Instead, the city will make good on any sums deemed ineligible, and once the U.S. Department of Housing and Urban Development is satisfied with their efforts, those sums will be credited to the city, which can draw upon them in a new round of block grants next time around.

In a report to the City Council, Mr. Augustus called his approach "the fairest and best course of action for these important community-based organizations,'' which have limited budgets and provide valuable services to low- and moderate- income neighborhoods.

Mr. Augustus is right about the limited budgets and valuable services of these community organizations, which have done much good work over the years. And the audit's findings do not in many cases mean there was wrongdoing, simply that documentation was lacking.

But the audit did show mistakes and missteps by both the CDCs and city officials. The city's warming relationship with HUD, and assurances that the better procedures are now in place, shouldn't obscure the fact that serious errors were made, for which too little explanation has been offered.

Among the audit's findings:

* The city expended $1,324,583 on ineligible costs that did not meet a program objective or were not reasonable because they exceeded the allowable amount for the developer fee.

* Worcester Community Housing Resources processed a $579 loan for which they charged the community development block grant program $6,652 in fees.

* WCHR administered a $635,000 revolving loan fund, but the agency didn't provide reports or documentation for any loans they made or any repayments they received, nor did city officials ask.

We think taxpayers would feel better about this matter if the manager, City Council or the CDCs themselves offered clearer answers as to exactly who spent the money, who obtained loans, what fees were paid, what goods and services were obtained and how much good was achieved for the neighborhoods these dollars were meant to help.

One of the chief purposes of an audit is to ensure accountability. That appears to be lacking here. Forgiveness may be a virtue, but when it comes to spending the public's money, satisfactory answers must be given first.

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Title Annotation:Editorials
Publication:Telegram & Gazette (Worcester, MA)
Article Type:Editorial
Date:Sep 7, 2014
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