Lourdes Santiago, director of Toledo's Department of Neighborhoods, concedes the city may have to repay nearly $106,000.
The Toledo Municipal Court failed to follow rules when it doled out thousands of federal grant dollars for home repairs and the city of Toledo did not keep tabs on contractors renovating homes, according to an audit released recently.
The U.S. Office of Inspector General - which audited the city following a Blade investigation into the city's department of neighborhoods and after a request from U.S. Rep. Marcy Kaptur (D.,Toledo) - recommended that Toledo be forced to reimburse nearly $82,000 of Block Grant funding and also to provide proper documentation regarding $24,000 in spending or pay that amount back.
“The city did not ensure that federal regulations and its own policies were followed in the administration of Code Violation Abatement Program administered by municipal housing court Judge C. Allen McConnell.
“The city did not ensure that the Toledo Municipal Court conducted independent cost estimates and obtained sufficient price quotes for housing rehabilitation services and completed work specifications that sufficiently detailed the services for program projects,” the audit said.
The audit also claimed that the city did not make sure contractors did the work, that the costs were reasonable, that federal rules about lead-based paint were followed, or that the households being helped under the program were income-qualified.
City Neighborhoods Director Lourdes Santiago, in a letter to Toledo City Council Friday, acknowledged the audit and the possibility that the city could be forced to repay $105,991.
“Fortunately, the policies, procedures, and controls deemed lacking in the report have already been implemented by the [Bell] administration,” Ms. Santiago wrote.
When Ms. Santiago took over as neighborhoods directors in January, 2012, she promised to swiftly overhaul the department. An internal investigation completed the following month detailed allegations of bid-rigging, favoritism, misuse of funds, and document falsification. It concluded most of the accusations could not be fully verified.
The 19-page report painted a picture of a deeply dysfunctional department where problems included an off-the-books petty cash fund, intimidation of a police officer who was investigating a department employee, an employee running his or her own contracting business, licensed contractors lending their names to unlicensed contractors, and a “probability” that one contractor was given access to another’s sealed bids.
Miss Kaptur (D-Toledo) said she was glad the Inspector General acted quickly on her request for an investigation after The Blade brought the issue to light.
"Taxpayers deserve to know whether their tax dollars are being used wisely and whether the funds are being administered properly," she said in a statement issued late Monday. "Now that we have learned of these serious deficiencies, we must insist that the city implement the necessary reforms so the funds are not being misused."