Memphis HUD program wasted $400,000, audit says


By Chris Butler | Tennessee Watchdog

MEMPHIS — Memphis officials accepted almost $4 million from federal taxpayers to carry out Housing and Urban Development programs, then proceeded to waste about $400,000 of it.

The waste, documented in a federal Office of Inspector General audit released last week, occurred because Memphis officials were careless with grants.

Specifically, Memphis Division of Housing and Community Development officials wasted Community Development Block Grant money, as well as money from the Housing and Rehabilitation Program, otherwise known as HARP.

HUD WASTE: One of the many findings from the federal Office of Inspector General Audit concerning how federal HUD money was wasted in Memphis.

HARP is a federally funded loan program for low- to moderate-income families with code violations and in need of home repairs. Under the program, Memphis officials, with HUD money, solicit bids from licensed general contractors.

Memphis HCD Director Robert Lipscomb is on vacation until next week and was unavailable for comment Monday.

Tennessee Watchdog also left messages with HUD’s Knoxville and Atlanta offices, both of which oversee department operations throughout Tennessee. No one has returned our messages.

“Inspectors approved payments for home repairs that did not meet rehabilitation standards or were not properly repaired as contracted,” according to the audit.

“These conditions occurred because the City did not properly write its rehabilitation specifications for contractors and perform inspections as required. In addition, the City did not follow its policies and procedures to ensure that the contractors performed acceptable repairs.”

Consequently, the audit went on, more than $400,000 in federal money was used contrary to program requirements for 61 rehabilitation contracts for work not completed or not completed correctly, placing hardships on the property owners themselves.

The audit documented improperly installed shoe molding and flooring; one property had a severe leak after repairs were supposedly made.

The audit recommended city officials pay back the $400,000. City officials concur with the findings.

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