AP NEWS

City could have to repay $500,000 in federal housing money

March 9, 2019

HATTIESBURG, Miss. (AP) — A south Mississippi city could have to repay $500,000 that the federal government says was “inappropriately used ... without adequate documentation.”

WDAM-TV reported the U.S. Department of Housing and Urban Development demanded money back from Hattiesburg after an audit of housing program funds from 2013 to 2017.

Hattiesburg officials said they intend to seek a meeting with HUD to discuss the issue.

The city used the money to buy, build and repair housing, but the program has had very public problems. Hattiesburg pastor Kenneth Fairly was convicted in 2016 of theft for skimming $60,000 from some projects.

The HUD audit, requested by Mayor Toby Barker, questioned $506,000 of the $1.1 million the city spent over the period. The vast majority stems from spending for which there isn’t proper documentation, not allegations of theft.

The audit found that 16 of 23 case files were not “adequately supported” by proper documentation and that the “city’s staff was not fully aware of HUD’s or its own requirements,” and that the city “lacked adequate procedures to ensure compliance.”

Hattiesburg Urban Development Director Andrew Ellard said the city disagrees with some findings. He wrote in a letter that documents submitted by the city on some projects should have sufficed to justify expenses.

In other cases, some money paid out, such as housing for tenants while tests for toxic materials in a residence were being conducted, were never included on the contractor’s final bill.

Worse, Ellard said, some documentation in storage had been destroyed in a tornado in 2017.

“In the end, we’re definitely going to be beefing up some of the policies and procedures for the department and make sure everybody is pleased with how they’re written and how they’re put to use going forward,” Ellard said. “In terms of the funds that they refer to that may have to be paid back to HUD, that’s also still up in the air. That kind of depends on how our conversations go with our local field office.”

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Information from: WDAM-TV, http://www.wdam.com

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