An elusive $98,000 the Toledo-Lucas County Homelessness Board owes the city of Toledo, which in November it claimed could not be found and wanted forgiveness for the debt, has turned up and will be handed over next month, the agency said Thursday.
Paul Tecpanecatl, chairman of the board that oversees federally funded homeless shelters, said in November an independent audit discovered a “major accounting error that led to the overspending of $98,000 in homeless prevention and rapid rehousing.” He stressed that “no money is physically missing,” but a “specific fund code was overspent.”
A week later, Mr. Tecpanecatl and Tom Bonnington, homelessness board executive director, said they had misstated what happened to the public money and rescinded their request for the city to forgive that debt. At that point, they said the agency knew about the problem for more than a year.
Mr. Bonnington said Thursday the money had been located. It was buried in a mess of sloppy accounting, he said.
“We have it set up to pay the city by Feb. 15,” he said. “The money was in between our bank account and being fronted for homeless services.”
Mr. Bonnington, who took over as executive director in mid-2013, blamed accounting methods for the error.
“They didn't have good accounting processes in place," he said. “The money is all there and accountable for. We know specifically which fund it is allocated to.”
Mr. Bonnington said the agency pays property owners rent for homeless people or people in danger of becoming homeless. Reimbursements for those rents did not come quick enough or pending reimbursements were not accounted for, he said.
The homelessness board has used three pots of money since 2009 — $3.2 million of federal money funneled through the city of Toledo; about $700,000 of state money provided through Lucas County, and about $200,000 from the United Way of Greater Toledo — to pay for rents, rent deposits, and utilities of rehoused homeless people or people in danger of becoming homeless.
Former Toledo Neighborhoods Director Lourdes Santiago said late last year that the homelessness board owed the city $98,000. She said it was not because of the homeless prevention/rapid rehousing, as initially stated by the agency. The issue arose when the agency didn't reimburse the city for funds backed by a state grant, Ms. Santiago said.
“They didn't have the cash flow to support it and we paid out the money for different activities [so] the homelessness board had to reimburse the city,” she said.
Since 2009, taxpayers have fronted the agency $700,000 for homelessness prevention. After the agency received the state grant, it was supposed to repay that in total to the city but only sent $602,000, Ms. Santiago said.
“We have been asking them for it for over a year,” she said last month. “At the last minute, they tried to tell us they wanted it forgiven because they said it was homeless prevention/rapid rehousing, which was not the case.”
An audit found cash-management problems.
“During the audit period, the organization had not implemented a cash-management system to ensure compliance with the 15-day rule relating to prompt disbursement of funds and had not drawn down funds and not expended less than $5,000 within 15 days of the drawn down [funds],” the audit states.
The audit also found the agency missed state deadlines to submit an audit regarding grants totaling at least $100,000.
The homelessness board and the neighborhoods department under former Mayor Mike Bell were criticized for their roles in deciding federal allocations for Toledo homeless shelters. The city gets the federal money, the homelessness board is the subrecipient, and shelters are sub-subrecipients.
Mayor D. Michael Collins, before he was elected, promised to restructure the homelessness board and the city’s neighborhoods department.
Tom Kroma, new Toledo neighborhoods director, said he is evaluating the city's relationship with the homelessness board.
He said the misplaced $98,000 was caused by “accounting errors and overspending, not someone taking money.”
In 2012, the Toledo-Lucas County homelessness efforts scored low enough in a federal review to jeopardize future funding, a review of federal documents showed. It scored 83.7 out of a possible 134, below the identified funding line of 97, according to U.S. Department of Housing and Urban Development documents.