HUD OKs PEDP lending upon improvements in oversight
THE PROVIDENCE ECONOMIC Development Partnership, chaired by Mayor Angel Taveras, has gotten the go-ahead from U.S. Department of Housing and Urban Development to resume lending to small businesses after improvements to the agency's procedures.
PROVIDENCE – The U.S. Department of Housing and Urban Development has cleared the Providence Economic Development Partnership to restart lending to local small businesses under its revolving loan program.
Roughly 18 months after the program was suspended because of poor oversight, loose underwriting and improper spending by administrators, the federal agency in a letter on Thursday said the city had cleaned up procedures enough to begin running it independently again.
The revolving loan program now has $1.4 million to lend to businesses that have been denied private financing.
“The city has initiated significant management and organizational changes within the past year which has resulted in improved internal controls,” wrote Robert D. Shumeyko, director of HUD’s Office of Community Planning Development in Boston. “In recognition of the significant progress and the city’s commitment to promote transparency and accountability of the City’s economic development activities, we have authorized PEDP to invite businesses to apply for [Community Development Block Grant] funding and make recommendations to HUD for funding approval.”
Along with the clearance, however, the letter informed the PEDP that it still owes $528,532 out of $618,145 that was improperly spent or loaned between July 1, 2005 and June 30, 2011.
“We have worked closely with HUD to improve oversight, accountability and transparency at the PEDP,” said Mayor Angel Taveras, chairman of PEDP in a news release about the clearance. “I thank HUD for its commitment to Providence and for its recognition of our efforts to bring the PEDP’s activities into compliance. The PEDP is once again in a strong position to support our work to create jobs and spur economic development in Rhode Island’s Capital City.”