U.S. review finds PB must repay $400,000 of its grants

PINE BLUFF — Pine Bluff owes the U.S. Department of Housing and Urban Development more than $400,000 after a final review by the federal agency found that community development block grants and Home Investment Partnerships funds were “improperly spent.”

In June, HUD sent its initial monitoring review to Pine Bluff officials, outlining problems with several areas of the city’s federal grant program dating back to 2010. The city responded to the review, and HUD issued its final report Nov. 1.

Home Investment Partnerships are the largest federal block grants given to state and local governments designed to create affordable housing for low-income households, according to HUD’s website. Community development block grants are designed to help communities improve the quality of life in urban areas.

The exact amount the city will owe has yet to be determined, said Larry Matthews, interim director of the Pine Bluff Economic and Community Development Department.

“We have some questions that we want clarified with HUD officials, and there is a possibility that we may appeal on some of the findings,” Matthews said.

Patricia Campbell, re-

gional public affairs officer for HUD, said that a letter to Matthews indicates Pine Bluff officials have provided what HUD needs to clear the city on three of the agency’s 14 findings.

Campbell said the city is liable for the remaining findings, and city officials have 30 days from Nov. 1 to provide HUD with a payment plan.

HUD’s initial review found that the city did not have adequate record-keeping procedures in place at its Economic and Community Development Department, but the city has since put measures in place to satisfy HUD officials, according to the letter sent to Matthews by the federal agency.

The city also satisfied HUD’s requirements related to disbursing program income to pay for costs before making cash withdrawals from the U.S. Treasury as required by federal regulations.

In addition, the city satisfied HUD’s requirements for having proper written policies and procedures in place for management of the Homebuyer Assistance Program.

But the city will have to pay back hundreds of thousands of dollars to HUD, according to the agency’s final report.

One of the largest chunks of cash owed is related to inadequate record keeping to substantiate a sub-grant of $150,000 to the CASA Women’s Shelter. The city has agreed to repay the funds from nonfederal sources during 2014.

The city must also repay more than $121,000 for not following federal guidelines requiring that no more than 20 percent of its grant and program funds be spent on administrative costs, according to HUD’s report.

Other funds the city must repay include more than $83,000 for using Home Investment Partnerships funds on a residence without first going through a competitive bidding process and more than $45,000 for failing to follow Home Investment Partnerships procedures when purchasing three properties.

Money to repay HUD could come from various sources, including city coffers and a reduction in the amount of grant money the city receives from HUD each year.

Pine Bluff received more than $539,000 in community development block grants in 2012 and more than $233,000 in Home Investment Partnerships funds, HUD officials said.

Matthews said he and others in his office are “cleaning up messes made in the past.”

Matthews assured that “while I am in office, we are going to go by the book. Going forward, as long as I am director, we will make sure we have HUD’s approval in regards to any programs.”