NC agency under fire after using mortgage-relief funds for meals and more

RALEIGH, N.C. (WNCN) — Federal investigators say the North Carolina Housing Finance Agency misused more than $100,000 in federal funds.

A six-year audit by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found the agency spent thousands of TARP dollars on meals for employees. The audit found about $3 million in improper expenses across 18 states which receive TARP funding, as well as the District of Columbia.

TARP launched in 2008 as part of a national effort to address the subprime mortgage crisis. North Carolina received $706 million dollars from TARP to assist with the Hardest Hit Fund, designed to help homeowners make payments if they lose their jobs or have their hours cut.

North Carolina Housing Finance Agency executive director Scott Farmer said the $107,578 in question is a six-year total and came from the administrative side and not the homeowner side.

“The treasury budgets a certain amount available for use by programs and a certain amount available for administrative costs. The amount we’re reimbursing to Treasury actually goes back into the administration bucket. No homeowners were harmed,” Farmer said.

The audit by SIGTARP inspectors said the North Carolina agency’s culture involves regularly charging TARP for expenses that other state agencies were not charging.

Much of the North Carolina spending went to meals for agency and Treasury Department employees, including catered parties and employee recognition events. The SIGTARP report said meals are not listed as permitted expenses in Treasury’s contract and constitute waste.

The audit report said the culture at the North Carolina agency was that officials could use almost any justification to charge TARP for barbecues, parties, celebrations, restaurant outings, gifts, gym memberships, regular employee meals, and employee cash bonuses.

Inspectors found the agency spent nearly $2,000 in TARP funding for three catered lunches from the now-closed The Square Rabbit in downtown Raleigh. Those events were for employee recognition and a holiday party, and the total tops $2,000 when including pizza purchased for employees who stayed at work during the party.

Four catered luncheons from Clyde Cooper’s Barbecue cost about $2,500. Farmer said the audit miscategorized some of the expenses, including the meals from Clyde Cooper’s.

“They were lunches where staff was working on an audit report, and they were working long days, and we brought in lunch for them while they were working,” Farmer said.

He said Treasury audits found nothing wrong with the meals. The SIGTARP listed a wide variety of additional food expenses, including meals for one or a few people at restaurants ranging from fast food to steakhouses. One receipt was for a couple of coffees at Dunkin Donuts while another was for a bottled water at a CVS pharmacy.

Farmer said the North Carolina Housing Finance Agency repaid a “good portion” of the money that was in question.

“In some instances, I think there was an issue where things may have been coded incorrectly and charged against the Hardest Hit Fund. Those are the amounts that we are reimbursing. We’re taking steps necessary to make sure that they’re billed to the appropriate accounts,” Farmer said.

“We could debate back and forth as to which ones may or may not have been allowed under the federal rules, but we felt it was better to move forward with the program and try and help folks, get back to the business of helping folks with the program,” he said.

“We run all kinds of housing programs across the spectrum from homelessness prevention, to home ownership, to foreclosure prevention, to rental housing as well as supportive housing for persons with disabilities. Depending on the program, we help literally thousands of families each and every year, and we basically do about a billion dollars worth of housing each and every year.”

Farmer said the state agency has helped keep about 25,000 families in their homes through the foreclosure prevention program. There is about $90 million left in the Hardest Hit Fund.


...[READ MORE]   Source: WNCN Durham County News