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Turner: Dayton’s ‘mismanagement’ puts millions of federal dollars at risk

U.S. Rep. Mike Turner, R-Dayton, today issued a stinging rebuke to the city of Dayton for what he characterized as its “mismanagement” of federal dollars used to support affordable housing projects.

In an earlier report, this news organization revealed that the U.S. Department of Housing and Urban Development Departmental Enforcement Center issued a report in June recommending the city repay $166,000 in federal Home funds for spending the money on “unallowed” costs.

The Departmental Enforcement Center also questioned the city’s expenditure of about $646,700 of federal funds and recommended the city show how it spent $502,000 or repay that as well.

RELATED: Why a federal agency says Dayton spent $166K on ‘unallowable’ costs and wants explanations on other funds

Today, Rep. Turner sent a letter to Dayton Mayor Nan Whaley saying it’s unacceptable that the city has continued to “permit mismanagement of funds and place millions of future federal dollars at risk.”

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“Your mismanagement of federal Home funds for low-income Dayton residents has placed over $1.7 million in jeopardy,” wrote Turner, a former Dayton mayor.

Dayton City Manager Shelley Dickstein said she would not respond to Turner’s letter through the media but would send him a response.

Dickstein told this news organization that the city of Dayton has not received any direct request from HUD for repayment of funds and that the Departmental Enforcement Center’s June report was only preliminary.

The city, Dickstein said, is still waiting for a final report, and there’s been no communication from HUD that mentions anything about the city having to pay back funds.

Also, she said, the city has done a “great deal of work” to improve the management of the city’s Home program, including replacing leadership, creating a new position to oversee the program and implementing new policies and procedures related to record keeping and administration.

“We’re in the process of hiring a forensic accountant to review all files and documentation one more time,” she said.

MORE: Dayton forced to give up $477K for missing HUD deadline

In an interview, Turner said he is calling on the mayor to sit down with his office and HUD to come up with a plan for fixing the city’s problems with the program.

Turner last year requested the city provide his office with specific steps it planned to take to address what he called “mismanagement” of Home funds after the city forfeited about $477,000 for missing a deadline.

Turner says he never received a response from the city and claims the city is harming its residents, including many people who live below the poverty line.

“This program is not that hard — it’s not that hard to take federal dollars that you’ve been given and use them properly,” Turner said.

On Wednesday, city officials and leaders told this news organization that they have made big changes to the administration and record keeping of the Home program.

Officials said the city is committed to fully complying with Home program regulations and best practices and that the city’s fiscal year 2018 Home program funds are not at risk.

In June, the Departmental Enforcement Center released a report based on an on-site visit its staff made to the city in December. The center’s staff reviewed a sample of the 240 voucher revisions the city made between 1997 and 2015.

RELATED: HUD has ‘significant’ concerns about Dayton’s handling of federal funds

The center said the city could not explain why money in a variety of instances was reassigned from one project and property to others.

HUD representatives from Ohio visited the city in July for a follow-up review that was supposed to take a closer look at the city’s program. That report has not been released. City officials said additional records and documentation were produced that supported some of the questioned costs.

But in an August letter, HUD said during the follow-up visit it identified additional vouchers that the city revised, and $172,800 was spent on the Schwind building project. The Schwind building was torn down to make way for a new Student Suites housing project that never moved forward.

HUD said the project was never completed and never met Home affordability requirements, and the city should have repaid the funds, but instead revised the vouchers to use for other activities, the letter states.

MORE: Turner says Dayton mismanaged federal funds, wants detailed plan

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