Luallen to Discuss Audit at Metro Council

There’s plenty of interest in today’s Accountability and Oversight Committee meeting at City Hall. It starts at 4, and you can watch it on Metro TV.

State auditor Crit Luallen is getting the rock star treatment, and Kelly Downard’s committee is anxious to hear just how bad things were in the Metro Housing Department.  Luallen is expected to further illustrate the screw-ups in the department.

The Metropolitan Housing Coalition, which advocates local housing policites, is urging citizens to attend the meeting.

Luallen received the following list of questions from members of the Council. It’s the only item on today’s agenda, but it doesn’t seem like an hour will be long enough to get through the list.

1.     Explain the state requirements of when the State Auditor’s office must audit Louisville/Jefferson County Metro Government.
2.    Will the State Auditor’s office be performing the FY10 financial statement and A-133 Federal grants audit?
3.    How does this audit compare to the magnitude of management findings and recommendations found in other audits performed by your office?
4.    Describe the terms “questioned costs”, “unallowable expenditures” and the very basics of acceptable grant management including the general life cycle of a grant.
5.    In general, what percentage of Metro’s Federal grants are entitlement grants versus competitive grants and what is the difference between the two.
6.    Crit Luallen stated in the Courier Journal that, “It is unacceptable for any government agency to have such a severe level of mismanagement and poor oversight. “…  “It is clear by the types of serious issues and multiple concerns we found in the housing department that the city must take every step necessary to correct them. “  “This cannot be done overnight.  The city has begun to address the issues, but the problems embedded in this department will take time to resolve by a full-time management team with strong financial expertise.”    When your auditors finished your field work with Metro Government, do you think a “full-time management team with strong financial expertise” was in place?  What did your recommendations reveal was needed in a management team – (ie. Numbers, background, expertise, etc.)
7.    Since the financial management in this department was so inadequate, can a correlation or prediction be drawn for the financial management in the rest of this organization?
8.    Although you described the financial management in the Housing and Family Services Department, what responsibilities were not being met by the Finance and Administration Department, Human Resources Department or the Mayor’s Office that should be addressed?
9.    Describe what you believe to be the major issues with Metro’s financial management.
10.    The audit stated HUD has been asked to review the $6.1 million in payroll which the State Auditor’s could not adequately test to determine if the city should reimburse any federal funding.   One of the biggest concerns was the volume of expenditures repeatedly moved from one account to another “made it impossible for auditors to determine with assurance if payroll expenses were charged to the correct federal grants – ultimately causing the disclaimed opinion.”  Has that subsequent testing been completed and if so, what was the result?  Please explain why the use of “journal entries” were a problem in this department.  Do you think excessive use of journal entries is the normal process within Metro Government?
11.    Your testing was of FY08.  When do you believe the vast majority of these problems began?
12.    The audit stated the city is working to reconcile more than $1 million of differences in prior years between the city and federal financial management systems.  Has that reconciliation been completed?  What it being done with current employees or were experts brought in to help with the reconciliation?  Why was HUD training not taken by Metro Staff?
13.    A bank account unknown to the Finance Department was discovered by the Auditors.  Was money being deposited into that account and disbursed from that account without any entry into the general ledger?
14.    Do you believe Metro employees are aware of the ethics guidelines adopted by this government?
15.    We have reviewed and summarized findings and recommendations from past years and while there were many in the Housing Department, nothing of this magnitude.  Should the independent CPA firm who performed the June 30, 2007 audit have reported these issues or at least made some of the recommendations?  (We were actually told in the audit review that things in the Housing Department were improving)
16.    The audit stated the auditors found the housing department did not adequately correct earlier reported audit findings.  What was the major cause that past findings were not corrected?
17.    The recommendation of a tip line is something that has been discussed and recommended by our Internal Auditor in the August 2008 Ethic Program Internal Audit.  How would you suggest we implement a tip line (ie. Third party administer, internal audit, 311 MetroCall, with police tip line, etc)
18.    Do you have any concerns about Metro getting large funds from the Stimulus Package and do you have any recommendations on controls over these funds?

A Move in the Right Direction for Homeless

Here’s some positive fallout from the State Auditor’s investigation of policies in the Metro Housing Department — the Mayor is making some changes in the way federal monies are used to get “homeless people off the streets, back to work and into safe housing.”

There is $9.2 million in funding available for this purpose, and after meeting with the heads of non-profit agency heads who work with the homeless, Abramson announced today that the new approach will make $1.5 million more available, and it will be used to hire an additional 20 case managers to help the homeless. See, new jobs!

After the agencies held a press conference last week complaining about lax policies in getting funding, the Mayor agreed to meet with them and make changes. Some grants were delayed by as much as six months in getting to agencies because of simple incompetence in the Housing Department.

Abramson said he’ll designate another $750K in the next budget for homeless assistance grants, a move that will appease leftover resentment from the agencies.

“Using this existing committee of non-profit agencies, the process can be streamlined and the decisions can be made by those who know the challenges the homeless providers face,” said Tina Heavrin, director of the city’s Housing and Family Services Dept.

Can “Louisville at Work” Work?

Mayor Abramson is likely stepping very carefully in trying to figure out to spend $100 million in federal stimulus money. So he’s called on some trusted allies who recently retired from the Administration to get it done. Another thing — Rick Johnstone, Jane Driskell and Kim Allen are available and can hit the ground running. It’s good to see a sense of urgency in place.

All three are volunteering — for now, according to Chad Carlton, the mayor’s spokesman. Johnstone, the former deputy mayor, will oversee the stimulus spending. Driskell is the former CFO, and Allen was in charge of public protection. They’ll be attempting to maximize the stimulus revenue by overseeing grant applications and other aspects.

This is a great opportunity for the Mayor and his team to do something right and something good, because we in the media will be watching for stupid crap that wastes money.

Here’s a list of the Mayor’s priorities:

  • Building and improving roads and schools;
  • Expanding water lines and strengthen floodwalls;
  • Maintaining our police force at its current strength while other cities struggle with layoffs and cutbacks;
  • Building a new firehouse in Beechmont that our crippled city budget may not otherwise allow;
  • Weatherizing homes to lower utility bills and help struggling citizens keep their homes;
  • Retraining people who’ve lost jobs and educate young people who are looking for their first job;
  • Building affordable housing;
  • And helping prevent homelessness

“These new federal dollars give us a unique chance to create a lasting legacy in our city,” Abramson said. “We will build and improve roads and schools, expand water lines, strengthen our floodwalls and weatherize homes.”

Read the List of Members of the Mayor’s Team after the Jump…

Read more

How Many Homeless in the City?

The Coalition for the Homeless is conducting its “Point-in-Time” survey tonight to determine just how many people are homeless in Louisville.

It’s not an exact science, but the organization is fanning out with 60 volunteers to count residents in shelters and camps. Mary Frances Shafer, community coordinator for the Coalition, says she expects that this year’s number will go up from the 961 that were counted a year ago.

Originally, the count was set for late January, but weather caused the delay. The count is required by HUD every two years, but Shafer said the local group chooses to count every year.

“We expect it to go up,” Shafer said, “becuase of our experience of seeing more people in the shelters every night.”

She said the results won’t be known for several weeks.

We Need More Scandals Edition

Still Pissed: Fox41’s Bill Lamb is still pissed at the federal government about having to keep his analog signal on through June. But Bill, you could have shown some guts and gone forward without the other stations. [Fox41]

Look, More People to Blame: Are you starting to get the feeling that the courts are going to eventually make Max Gilpin’s parents rich? After reviewing more evidence, they’re adding the principal, athletic director and an assistant coach at PRP to their civil lawsuit. And Sheldon Berman is standing by principal David Johnson and criticizing the newspaper. [C-J]

Give Me a Home: The homeless problem is getting worse, and a lot of people are moving in with relatives. And it doesn’t help that the Metro government can’t administer federal grants. [C-J]

Speaking of Homeless, Jerry Takes a Meeting: After representative of several homeless groups held a press conference yesterday saying, no, they weren’t surprised at all the mismanagement allegations in the state auditor’s report, Jerry Abramson set up a meeting with them for next week. The groups indicated that they’ve been silent about the problems for years out of fear that speaking out would endanger their grant money. [WAVE]

Casinos Still in Power in Indiana: Give them credit for trying, but Indiana lawmakers lacked the courage to pass a strong statewide smoking ban, instead providing an exemption for casinos and bars.  The bill that passed the Hoosier House requires places like Horseshoe to make 20 percent of its space non-smoking.  That place, by the way, really stinks. Smokers can have it. Now the bill’s up to the Senate. [IndyStar]

Let the Spending Begin: But none of that stimulus money will go toward building bridges. $52 million is going to Jefferson County Public Schools, and Sheldon Berman says that means he won’t have to layoff so many workers. [WHAS, C-J]

Return to Appalachia: That Diane Sawyer special on eastern Kentucky pulled some huge ratings, and the producers are back in the hills to produce a follow-up that will air Friday night at 10. It got the biggest audience for a 20/20 episode since 2004. [Herald-Leader]

Ashley on Tape: Watch Ashley Judd’s speech in Frankfort yesterday, thanks to the H-L, and read Billy Reed’s love letter to her. [Herald-Leader, BillyReedSays]

Heard on the Homo Mafia Gayvine: There’s some hanky panky going on at the Kentucky Equality Federation, and Jack Conway’s crew has sniffed it out. [Page One]

Homeless Agencies Heaping Blame on Administration

Imagine that.

The organizations most directly affected by the city’s inability to efficiently handle grant monies are having a press conference to release some pent-up anger they’ve been harboring about the city’s system for years.

One insider told me that the agencies involved have been fearful of criticizing the Administration about the way grants are handled by the city. Criticizing the Mayor, they reasoned, was a good way to make a bad situation worse. But with the release of the State Auditor’s report, the cat’s figuratively out of the bag. So make way for the truth.

Now the agencies want to make it clear that delays in awarding grants have been caused by the administration, not by the agencies. Some grants have been in the process of being paid since last July, and as time goes by, the agencies must come up with ways to survive financially.

As a press conference today, Marlene Gordon, executive director of the Coalition for the Homeless, says she’s concerned about the money from the federal stimulus package coming through the city. As for the problems encountered in the last year, she said:

“Now is not the time to turn back unspent housing dollars.   Through the Freedom of Information Act, The Coalition has learned that $88,000 of Shelter Plus Care funding which could have easily been spent was returned by the city in 2008–enough funding to house 15, disabled adults in one bedroom apartments for an entire year. “