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?

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.

Big News Day Wrap-up Notes and Giggles

Only the Beginning: That audit on the Housing Department has everyone at City Hall busy. In three weeks, the Metro Council’s Oversight Committee will hold a Q&A with a rep from the Auditor’s Office.

500 Rally for Mountains: Ashley Judd wants to see mountaintop removal ended, and told 500 people at a rally in Frankfort today. She’s supporting Sen. Kathy Stein’s bill blocking coal companies from filling valleys with soil from mountaintops. Media note: photos of Ashley in the H-L, nada in the C-J. [Herald-Leader]

Can’t Stop Laughing: Page One has a post explaining what Gary Tapp’s homo bill really means. [Page One]

Another DTV Note: I know you probably turned off the TV after my appearance on the CW this morning, but later in the Louisville Live show this morning the CW became the first, and only, local station to shut down its analog signal. A farmer in Campbellsville complained, but otherwise everything went smoothly.

Eats Makes a Big List: We’re proud to announce that our own food and dining blog, Ville Voice Eats, has been selected by a significant national food blog as one of the “Best Food Blogs in America.” Congrats to our own David Domine for consistently coming up with great stories.

Fun with Facebook: I just got an e-mail with the subject line: Steve Forbert Sent you a Message on Facebook.  Steve has a new studio album coming out. How cool is that?

Page One & The ‘Ville Voice on TeeVee

Crit Luallen’s damning audit of Metro Housing in Louisville, the gay hate legislation in Frankfort, Francene and the JobJam this Saturday and Jim Bulleit speaking out.

The first few seconds were cut off because the CW apparently can’t figure out how to start at 10:00 A.M. instead of a minute before, killing our TiVo.




Auditor slams Metro Housing Department

State Auditor Crit Luallen has released a report that claims gross mismanagement at the Louisville Metro Department of Housing and Family Services led to questionable spending of millions of dollars in local and federal funds. Luallen used strong words to describe the ineptitude of Metro officials.

“It is unacceptable for any government agency to have such a severe level of mismanagement and poor oversight,” Luallen said in a release. “It’s 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.”


CLICK ABOVE for the full report

Much of the blame is directed toward former director Kimberly Bunton, a Jerry Abramson appointee, who resigned in August after the Courier-Journal discovered that she directed nearly $2,000 in agency funds to her mother.

But according to the state audit, that was the tip of the iceberg of problems in the city department, which was responsible for distributing $18 million in federal funds. Bunton’s incompetence and mismanagement resulted in findings of $459,000 in questioned costs; a loss of $363,054 due to mismanagement and $359,630 in federal funds distributed without proper oversight, according to the audit, which reviewed financing from July 2007 through June 2008.While Bunton was clearly in over her head, the scope of the findings indicate problems in the department are widespread. After Bunton resigned, Abramson brought Tina Heavrin in as interim director.

Problems in the department first made public notice last June when the Courier-Journal reported that $19.5 million in federal housing grants had been awarded to the city but never spent over a 13-year period . Then there was news about a loan on property owned by deputy mayor William Summers IV. He had missed four payments on a loan due to an oversight.

Just last week, WHAS-TV reported that the department had hired Summers’ son for a $64,000 job without posting the position or interviewing other candidates.

The lengthy audit questions everything from staff training to payroll administration to ethics in its report, finding questionable decisions large and small.

For example, it found that a grant intended for reducing poverty and revitalizing low-income  communities was used to pay Bunton’s cell phone bill. Money intended for one purpose was frequently used for other purposes.

In its responses, Metro Government takes the position that it does take the charges seriously and is making changes to improve the functioning of the department, but Luallen’s report shows that it’s got a long way to go.

For those of you unable to access PDF files at work, there’s a quick summary of the audit results after the jump…

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