Fillmore District Audit Shows Little Oversight

By MATT SMITH and ZUSHA ELINSON
Published: January 5, 2012
New York Times

Emmit Powell hesitated when he was asked to talk about the City of San Francisco ’s efforts to promote his popular barbecue restaurant as the anchor of a showcase redevelopment project in the Fillmore district. The venture led to his financial ruin.

“I went through a lot there, and I don’t really want to go back into that situation,” said Mr. Powell, a onetime gospel singer, real estate investor and restaurateur. “It was devastating for me. I lost my business. I lost my home. I lost my property. I don’t want to blame them, because I don’t think it would do any good.”

For 30 years, Mr. Powell ran the popular barbecue joint Powell’s Place in Hayes Valley. The Fillmore neighborhood redevelopment project was closed in 2009, and today Mr. Powell’s former restaurant — and $360,000 in San Francisco Redevelopment Agency loans that he could not repay — exist only as line items in a new city controller’s audit.

The agency is being criticized for handing out millions of dollars without proper controls or even standards for evaluating whether grants and loans did any good, and then making inadequate efforts to collect loan payments.

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Audit: $406M faulty Medicaid payouts

1/14/2012
By JIM DAVENPORT Associated Press

AIKEN — A federal audit released Friday said South Carolina may have spent more than $406 million on improper Medicaid payments and nearly 11 percent of payments were made in error.

The state’s error rate of nearly 19 percent was nearly triple the national rate of 3.6 percent.

State Department of Health and Human Services Executive Director Tony Keck said many of the people who received the improper benefits would have qualified for the money if procedures had been properly followed.

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Audit of Benton Harbor EM: ‘Financial controls missing’

Sun, Jan 15, 2012
By T. Kelly
The Michigan Citizen

DETROIT — While Benton Harbor Emergency Manager Joe Harris has been giving interviews in the last few weeks to Detroit-area media that paint the EM process as positive, an audit of Benton Harbor finances reveals continuing debt, a failure to follow basic accounting practices and undocumented spending of federal funds.

After nearly two years in charge, Harris did reduce the city’s cumulative fund deficit by $1.28 million, but overspent the city’s general fund revenues by more than $650,000 in fiscal year 2010-11, according to the Grand Rapids audit firm Rehmann Robson.

At a June town hall meeting, Harris incorrectly reported the city was out of debt and might have a surplus.

More importantly, the audit exposes the flaw of emergency management. The EM law empowers one person to operate outside the view of the public, sell public assets, dismiss elected officials and void contracts. The EM law eliminates the traditional American system of checks and balances that the split between legislative and executive branches provide.

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Mike Beebe Calls For Audit Of Forestry Commission

By The Associated Press
1/12/2012 2:33:40 PM

LITTLE ROCK (AP) – Arkansas Gov. Mike Beebe called on Thursday for legislative auditors to examine the Forestry Commission’s finances after a $4 million shortfall that prompted the layoff of 36 workers, and indicated that the audit’s findings may determine whether the agency’s director still has his support.

The governor said he hopes legislative auditors look at why the agency improperly used federal funds to prop up its budget over the years. He said last week he would ask the Legislature to use $2.7 million from the state’s surplus to pay back the grants and keep the agency solvent through the year.

Beebe’s office and finance officials have said the commission misled them on whether it had the authority to use the federal funds for its operations.

“The question is, why did they do that?” Beebe told reporters. “Was it a mistake? Was it intentional? Were they told to do that by somebody? Who knew about that? Those are the questions I want answered as fast as we can get them answered.”

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Charges filed in Valley Metro bus scandal

Saturday, January 14, 2012
By Laurence Hammack
The Roanoke Times

Three years after the start of an investigation into bid-rigging at Roanoke’s bus system, federal authorities have filed their first charges.

Court documents unsealed Friday named Diane Holdren, the owner of an interior design firm and the wife of William “Chip” Holdren, the former assistant general manager of Valley Metro.

Diane Holdren’s company, Holdren’s Interiors, was awarded contracts for an office renovation at the bus system’s headquarters that were the result of a bid-rigging scheme, federal authorities allege.

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Coliseum finance director earned Visa points on stadium upgrade

By Paul Pringle and Rong-Gong Lin II, Los Angeles Times
December 10, 2011, 5:15 p.m.

Last spring, the Los Angeles Memorial Coliseum set out to upgrade the sound system for its new video board. The equipment and shipping costs were steep — about $270,000.

Finance Director Ronald Lederkramer could have bought the gear the way other government agencies do, by issuing a check from the taxpayer-owned stadium.

Instead, he put the package of high-powered loudspeakers on his personal Chase Visa card, charging it in installments and paying those off with government checks that he and a lower-ranking employee signed, according to records and interviews.

In the process, depending on which Visa he used, Lederkramer earned roughly enough redeemable reward points for a week at the downtown Ritz-Carlton, two Bulova watches or even a pair of first-class round-trip United Airlines tickets to London or Tokyo worth as much as $24,000, award schedules show.

What Lederkramer did with all those points is unclear. But experts say his actions were a breach of duty, raising questions of whether a conflict of interest — his stake in the reward points — influenced his decisions as an official responsible for safeguarding the public’s money.

“This is absurd and appears to violate every procurement policy the city of Los Angeles has in place to protect taxpayers,” City Controller Wendy Greuel told The Times in an email.

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California questions $31 million in spending by Montebello

By Jessica Garrison and Abby Sewell, Los Angeles Times
September 23, 2011

State auditors found Montebello improperly handled $31 million, including instances in which officials used funds meant to improve blighted neighborhoods on fancy dinners in Las Vegas, golf, embroidered polo shirts and other “frivolous” items.

The two audits, released Thursday, mark more bad news for the city of 65,000 east of downtown Los Angeles. Montebello is seeking a private loan to avoid running out of cash this fall and is the subject of an FBI investigation into allegations that it misused federal housing money.

Officials from the state controller’s office spent months reviewing Montebello’s books dating back to 2005 and said they were troubled to learn that the city regularly used money designed for specific purposes to balance its budget — in apparent violation of the law.

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Audit results in temporary funds being cut off from regional transit agency

By: JOURNALNOW STAFF McClatchy-Tribune
September 02, 2011

GREENSBORO – The region’s mass transit agency, already confronting challenges this year with route cuts and fare increases, now faces a temporary cutoff of some federal funds because of concerns over its internal accounting practices.

The Piedmont Authority for Regional Transportation received a letter last month from the U.S. Federal Transit Administration suspending PART’s access to certain federal grant revenues until PART resolves the accounting concerns. The concerns were raised in a recent audit of PART’s financial procedures conducted on behalf of the Federal Transit Administration.

“Because of the seriousness of these material weaknesses in the review, FTA has suspended PART’s drawdown privileges. … Once the findings are corrected, FTA may lift the drawdown suspension,” states the letter to PART from the regional administrative office of the Federal Transit Administration in Atlanta.

PART Executive Director Brent McKinney said that the mass transit agency is addressing the audit recommendations and expects to have the suspension lifted in the next couple of weeks. The suspension of access to Federal Transit Administration money hasn’t affected PART’s day-to-day operations and bus service, McKinney said.

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9/11 led to spending binge on homeland security grants

By Chris Strohm | National Journal | September 2, 2011

The U.S. government has doled out more than $35 billion in homeland-security grants to state and local governments over the past decade. Yet even as questions persist about how effective the spending has been, officials are bracing for belt-tightening cuts.

The grants built up a network of capabilities in states, urban areas, and other regions since the Sept. 11, 2001, terrorist attacks. Tens of thousands of first responders trained for dealing with terrorist attacks and natural disasters. At 73 “intelligence fusion” centers, analysts sift through data and share classified information over secret networks. Local police and fire departments have pricey radios, robots, and armored vehicles.

But reports over the years have revealed problems involving no-bid contracts, equipment that didn’t work as planned, and poor coordination of resources. For example, emergency-response officials in California – by far one of the largest recipients of homeland-security money – used sole-source contracts to spend about $6.2 million on license-plate readers, $4 million on public-safety radios, and $1.2 million for intelligence-analysis software, according to an audit by the Homeland Security Department’s inspector general. State officials acknowledge no-bid contracts were a problem and say they are reforming their procurement policies.

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Flint could lose out on federal housing funds

Monday, August 29, 2011, 6:55 PM
By Kristin Longley | Flint Journal

FLINT, Michigan — The city potentially could lose out on $1 million or more in federal dollars for housing for low-income residents because of lagging, incomplete projects and inadequate record keeping, documents show.

The problems, which were cited in past audit reports of the affordable housing program, still haven’t been corrected to the satisfaction of the federal government.

In a letter to the city, U.S. Department of Housing and Urban Development officials warned that management of the HOME Investment Partnerships Program is in “disarray” and said city officials are cooperative but not “truly knowledgeable” about the HOME regulations and requirements.

“The city is very close to a finding of no capacity to operate a HOME program,” the letter states. “Such a finding would prevent the city from receiving future HOME allocations until its capacity sufficiently improves.”

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