Feds: Michigan charged housing, demolition fund $330000 for parking – Detroit Free Press

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In this June, 2015 photo, a contracted demolition crew from Detroit-based Homrich demolishes a house on Dolphin Street, as part of the city's blighted house demolition program.(Photo: Keith Matheny, Detroit Free Pres, Keith Matheny, Detroit Free Pres)

WASHINGTON The state of Michigan charged a federal fund dedicated to housing relief and tearing down abandoned homes more than $330,000 to give employees free parking, an audit found today.

The Michigan State Housing Development Authority (MSHDA) responded to the claim, which was contained in an audit that found millions in what a special inspector general in Washington characterized as unnecessary expenses charged to the federal Hardest Hit Fund by various states, saying the charge was reasonable.

"The parking for contract employees who work in downtown Lansing -- where parking is not free and is actually at a premium because it is the state capital -- was essential to meet staffing levels required for the important work of helping families in Michigan avoid foreclosure," said Katie Bach, a MSHDA spokeswoman. "Not paying this expense would have put (the state) at a disadvantage in attracting and retaining the talent required."

The number of contract employees receiving the benefit has fluctuated over time, from between 65 to nearly 100 at the height of the program.

Bach said the MichiganHomeowner Assistance Nonprofit Housing Corp., which MSHDA created to oversee the Hardest Hit Fund in the state, approved the charge,believing it was "a reasonable and customary expense of doing business, withwhich previous federal audits have taken no issue."

The Hardest Hit Fund, created in 2010 under the Trouble Asset Relief Fund to help keep residents in their homes and stabilize neighborhoods in the wake of the housing crisis, has committed a total of about $761 million to Michigan since its inception, about half of which has been targeted for demolitions, especially those in Detroit.

In previous reports to Congress and the U.S. Treasury, Christy Goldsmith Romero, the special inspector general for the TARP, has found instances of alleged waste, including last year uncovering what it said was $8.2 million in waste and abuse in Nevada that included car allowances, rent payments and overhead expenses Romero concluded were unjustified.

In the most recent report, which was sent today to Treasury Secretary Steve Mnuchin, Romero and her auditors found that state agencies in Michigan, South Carolina, Nevada, Rhode Island, Ohio and California charged TARP more than $600,000 for transportation costs which would have been more appropriately paid for by the states themselves.

It recommended the states be required to pay back the money.

The Michigan state agency charged TARP $330,575 to give all employees the perk of free parking, the audit said. The Michigan state agency decided at a Board of Directors meeting in February 2011 to provide free parking for employees working on the Hardest Hit Fund.

Every dollar spent on unnecessary expenses is a dollar that is no longer available for homeowner assistance, the audit said, noting that funds were charged to cater barbeque dinners in North Carolina and to pay back rent on offices in Rhode Island among other expenses.

Michigan officials didn't immediately respond to the suggestion that the funds be repaid.

In Michigan, the audit also found charges of $77 for refreshments for a meeting with Treasury officials in 2015; $55 for gifts for employees from Bed Bath and Beyond and some $6,000 in other charges for food and beverages over the last seven years.

The Hardest Hit Fund and the demolitions it largely funds in Detroit have become a source of controversy, which questions being raised about costs and payments made to contractors. This week the Detroit Land Bank Authoritys demolition director resigned after just seven months on the job and a federal investigation into Detroits aggressive demolition program is continuing.

The citys inspector general also said this week that two contractors submitted doctored photos of sidewalk repairs done in connection with the demolition program in order to get paid.

Contact Todd Spangler at 703-854-8947 or at tspangler@freepress.com. Follow him on Twitter at @tsspangler.

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Feds: Michigan charged housing, demolition fund $330000 for parking - Detroit Free Press