oversight

Hotline Complaint, Buffalo Municipal Housing Authority, Buffalo, New York

Published by the Department of Housing and Urban Development, Office of Inspector General on 2004-09-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                 U. S. Department of Housing and Urban Development
                                                                          New York/New Jersey Office
                                                                       Jacob K. Javits Federal Building
                                                                         26 Federal Plaza – Room 3430
                                                                     New York, New York 10278-0068




                                                                          MEMORANDUM NO:
                                                                               2004-NY-1803
September 15, 2004


MEMORANDUM FOR: Joan K. Spilman, Director, Public Housing Division, 2CPH


FROM: Alexander C. Malloy, Regional Inspector General for Audit, 2AGA


SUBJECT:       Hotline Complaint
               Buffalo Municipal Housing Authority
               Buffalo, New York

                                      INTRODUCTION

We completed a limited review of two programs at the Buffalo Municipal Housing Authority
(BMHA). The review was initiated from complaints filed with the Office of Inspector General’s
(OIG) Hotline. In general, the complainants alleged embezzlement in the Buffalo Public Housing
Resident Council Corporation and misappropriation of funds in the Micro Loan programs.
Pertaining to the Micro Loan Program, there were specific allegations made against the entity
that is administering the program, Temple Community Development Corporation (TCDC). The
overall objective of the review was to determine whether there is any validity to the allegations.

                               METHODOLOGY AND SCOPE

We performed our on-site work at offices of the BMHA, the TCDC and the Buffalo Field Office
of the United States Department of Housing and Urban Development (HUD). Generally, the
review covered the period between January 1, 2001 and December 31, 2003; however, it was
extended as necessary. Our on-site review work was conducted between June and August 2004.

We interviewed: members of HUD’s staff; employees of at the BMHA; representatives of
TCDC; a BMHA contracted investigator; and a complainant. Also, we reviewed program records
maintained at HUD, the BMHA, and the TCDC. In addition, we analyzed and tested controls
over the grant funds provided to the Resident Council Corporation (RCC) including tracing and
accounting for expenditures charged to the grant.
                                                                                  Memorandum


                                       BACKGROUND

The Buffalo Public Housing RCC’s activities are to aid public housing residents to become self-
sufficient by providing supportive services. The scope of services includes but is not limited to
providing transportation services to residents authority-wide for the purpose of shopping,
doctor’s appointments, training programs, meetings and events. Also, the RCC is responsible for
managing and maintaining a community center. In its most recent agreement with the BMHA,
the RCC was awarded a maximum of $244,833 for the period of June 1, 2004 through June 30,
2005. According to the budget, 73% of the RCC total budgeted expenses are for salaries and
fringe benefits.

The Micro Loan Program was part of a $500,000 1997 Economic Development and Supportive
Services grant that HUD awarded the BMHA under the Combined Notices of Funding
Availability for fiscal year 1997 for the Public and Indian Housing Economic Development and
Supportive Services Program. The BMHA entered into a subrecipient agreement with the
Buffalo Urban League to act as a micro loan administrator for $87,000 of loan funds. The
purpose of the program was to provide funds to public housing residents wishing to start or
expand their own small business operation. The Buffalo Urban League did not make any loans
during the term of their agreement. The BMHA then entered into an agreement with TCDC to
administer the $87,000 of loan funds.

                                   RESULTS OF REVIEW

The results of our review do not substantiate the allegations that a BMHA Housing
Commissioner embezzled funds from the RCC Program. Nor do the results substantiate the
allegations that the BMHA Executive Director provided micro loan funds to people who did not
meet the criteria for the loans. Furthermore, we did not find anything in TCDC’s records that
substantiated the allegation that the President of the TCDC obtained micro loan funds for his
home or that funds had been directed to the Buffalo Economic Renaissance Corporation.
However, we could not verify the accuracy of the program income received by the TCDC
because adequate records on loan recipients’ repayment activities were not maintained by
TCDC. Our concerns regarding the administration of the Micro Loan Program are reported in a
separate memorandum.

Should you or your staff have any questions, please contact Garry Clugston, Assistant Regional
Inspector General for Audit at (716) 551-5755, extension 5901.




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