Nine months after the U.S. Department of Housing and Urban Development sought repayment of about $1.4 million in grant funds used to support low-income housing programs in Albuquerque, it is seeking another nearly $3 million in repayments because of record-keeping problems and poor oversight of millions of dollars in federal funding. In a scathing audit of the city’s Community Development Block Grants program issued last month, and which covered 2013-2015, HUD’s Office of the Inspector General said, “These conditions occurred because the city did not have the capacity to implement an effective grant administration.”
This, despite department director Douglas Chaplin’s promises after the first critical report, which covered an even earlier time period, to address the problems. The city ended up paying $345,000 after that report (and still may be on the hook for the balance of $1.4 million), and Chaplin pledged: “The intent here is to fix this in a very permanent way going forward, so that we don’t have these findings come up in the future.”
“These findings” included record-keeping problems and poor oversight that earned the city a “high risk grantee” flag from HUD, and OIG recently threatened to withhold further funding “until the city shows that it has the capacity to implement an effective program in compliance with all requirements and all recommendations in this report are met.” Instead, the inspector general graciously settled for extending the “high risk grantee” designation another year.
But “the future,” under Chaplin’s direction, ended up including the city being criticized by OIG for: contracting with a bidder 28 percent higher than the lowest bid; using nearly $573,000 in CDBG funds to buy a building to be used in part for non-CDBG activities; incurring $1.83 million in ineligible costs that must be repaid; and owing an additional $1.1 million unless it can prove required documentation. These occurred between 2013 and 2015; Chaplin became director in late 2013 and was the department’s associate director from 2011-13. In response to the latest audit, he said in an emailed statement, “As director of the department, I can assure the public that we take the findings and recommendations of this report seriously and use them as an opportunity to make improvements and create a CDBG program the community deserves.”
The city is contesting $1.1 million of the $3 million HUD is questioning, but it bears noting this is the second time in as many years the city has been called on the carpet and at least the third time HUD has asked for a repayment (in 2011 HUD questioned $1.7 million in stimulus spending). Looking at the amounts the city is being told to repay, these are not simple paperwork discrepancies. And given this track record, Chaplin’s go-to platitudes and boilerplate promises are hardly reassuring.
What’s at stake are million of dollars in grant money that low-income residents rely on for affordable housing and other programs. Failure to comply with HUD requirements could result in the city losing future funding – and it’s not pocket change. Albuquerque received $11.7 million in HUD funding in 2013-15.
As poor as New Mexico is, the need for affordable housing – and the millions in federal dollars that provide it – is extreme. The city can’t afford to lose any if it hopes to address homelessness and myriad related problems – panhandling, tent cities, addiction, crime, etc. Chaplin isn’t delivering, and the Department of Family and Community Services is not living up to its name. City officials in this and the next administration need to actually get the CDBG house in order. Then needy Albuquerque residents can do the same.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.