PROVIDENCE – R.I. Housing was included in organizations that misappropriated a collective $3 million in unnecessary expenses charged to the Hardest Hit Fund, a federal homeowner-relief program designed as a safety net to save unemployed or underemployed Americans, according to the Office of the Special Inspector General for the Troubled Asset Relief Program Audit Report released in late August.
The report said R.I. Housing spent $1.2 million in unnecessary funds from the HHF funding, including severance payments to former employees and over $1 million for backdated rent, a new customer service center build-out charges, operating expenses and online-system expenses that include non-HHF use. Other expenses include $75,703 in unemployment payments to former employees and employee-parking reimbursement.
In the Office of the Special Inspector’s report, it states: “To be authorized under TARP law, [the] Treasury set a strict test in its contracts for state agency expenses: expenses must be ‘necessary’ to facilitate the loan modifications authorized by the Emergency Economic Stabilization Act.”
However, R.I. Housing disagrees with the audit’s conclusion. According to R.I. Housing spokeswoman Emily Martineau, “R.I. Housing strenuously disagrees with the characterization of the expenses outlined in the recent SIGTARP report; the corporation has consistently been a diligent and conscientious steward of Hardest Hit Fund funding. There are more than 3,300 Rhode Island families who have remained in their homes thanks to R.I. Housing’s effective deployment of HHF assistance.”
Martineau also said in a statement given to PBN: “The expenses questioned in the SIGTARP report were included in the HHF budget submitted by R.I. Housing, which was approved by the U.S. Department of the Treasury. Since the program’s inception, R.I. Housing has consistently been under budget with respect to administrative expenses for the HHF program.”
Across the country at several different housing agencies, the audit found that of the total $3 million in TARP funds found as unnecessary spending, $150,618 was spent on barbeques, parties, dining expenses and picnics; $342,407 was spent on employee bonuses, cash debit cards, gifts and other perks; and $598,374 was used in car allowances, free parking and transportation perks, among other expenses.
SIGTARP could not be reached for comment at the time of this publication.
Chris Bergenheim is the PBN web editor.
