County Housing May Owe $3.5 Million

Federal Audit Reveals Misspent Grants and Shoddy Documentation

Wednesday, July 17, 2013
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Santa Barbara’s Housing and Community Development Division could be on the hook for as much as $3.5 million to the federal Department of Housing and Urban Development for either misspending federal affordable housing grants or for failing to document that the expenditures complied with federal guidelines. Since 2005, the county has received $10.8 million from the federal government to develop low- or very low-income housing. Late last year, HUD’s Office of Inspector General conducted an exhaustive audit of how $8 million of that was spent. Auditors concluded $444,000 was unjustifiable and will have to be paid back, and $3.1 million may have to be repaid because the documentation to justify these expenditures is not adequate. The auditors also found that county housing officials complied with federal rules and regulations in distributing $3.9 million in federal housing loans.

Triggering the audit was the recent bankruptcy of the Lompoc Housing and Community Development Corporation, a major recipient of HUD funds that were deployed through the county housing office. The auditors concluded that the Lompoc nonprofit had serious reporting, performance, and compliance problems dating back to 2005, yet the county continued to distribute funds despite the repeated failure to comply with requests for documentation. “There are concerns as to why the County continued to disburse funds,” the auditors concluded, “when there were continuing issues.” The Lompoc housing nonprofit was represented by former county supervisor Joni Gray’s husband, George Wittenburg, yet Gray did not recuse herself from votes to authorize federal housing funds to that troubled agency. For this transgression, Gray recently agreed to pay a $3,000 fine to the California Fair Political Practices Commission.

The federal auditors also looked at other low-income housing developers and discovered a pattern of poor oversight and supervision by county housing officials. The county’s housing program has been marked by a high degree of turnover from top to bottom, and the auditors concluded that contributed to lack of management, haphazard record keeping, and a chronic failure to inspect the premises of housing projects built with federal funds. Herman Parker, who took over as director of Housing and Community Development just as the Lompoc housing crisis came to a boil, commented that he is in discussions with HUD officials to resolve any outstanding issues. “We have what you’d call a disagreement between what the feds feel is appropriate documentation and what the county feels is appropriate documentation,” he said. “But there is documentation. We are still in the process of working through these issues.”


Independent Discussion Guidelines

Mr. Parker. Our sympathies. This was a dumb merger of HUD to Parks. But then again, this BOS hasn't been known for two many smart decisioins in over 6 years or so. Again, buck stops with the Sups.

BeachFan (anonymous profile)
July 17, 2013 at 8:47 a.m. (Suggest removal)

And to the taxpayers, who keep electing people who think their main job is to provide very well-compensated jobs to people regardless of their ability. Who will be fired for these failures? Who will reimburse the taxpayer?

JohnLocke (anonymous profile)
July 17, 2013 at 9:22 a.m. (Suggest removal)

Yet again, very misleading Independent headline word choice for this article. It should be screaming about the nearly half million dollars of "unjustifiable payments" the county made from our tax dollars. Screaming!

Details please about who, what, when, where, how and why nearly a half million dollars was found to have been unjustly disbursed. That is your lead story.

foofighter (anonymous profile)
July 17, 2013 at 10:49 a.m. (Suggest removal)

Why don't you start your own newspaper if you're such an expert foo? Why don't you write the piece, because you'd have to use your real name?

Ken_Volok (anonymous profile)
July 17, 2013 at 12:21 p.m. (Suggest removal)

God love the independent Fourth Estate.

foofighter (anonymous profile)
July 17, 2013 at 6:33 p.m. (Suggest removal)

Does anyone really think the county is really interested in provide housing for low income people?
A few years ago there was an audit of the 'for sale' affordable house, a large percentage of these were not legal (owners not living there, sublets, owners owning other market rate homes). The excuse --the county does not have enough resources to monitor!
The county is interested in getting the money to build affordable house, with a big chunk goes to their administrative overhead (salaries and pensions). The county is interested in collecting rents to pay on going salaries and pensions. But sorry there is no money to do the job of monitoring!!
Take a look at the housing budget, they do not pay property taxes, they need more money from the county for repairs. Their overhead is outrages compared to private property management even when taking into consideration the rents are low.
Sorry, but affordable housing has nothing to do with providing for those in need, it is about revenue for the county.

loneranger (anonymous profile)
July 18, 2013 at 3:06 p.m. (Suggest removal)

The feds, while they're at it, should look into the City of Santa Barbara Housing Authority. Know of nothing wrong, but these are public monies, some of which are federal dollars ---- and it would be valuable to have it vetted or not, including the management costs.

Or maybe this is something the GJ should look into, with a comparison of other cities of all facets, including city percentage of subsidized lower incomed housing units?

at_large (anonymous profile)
July 19, 2013 at 11:15 a.m. (Suggest removal)

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