The federal Department of Housing and Urban Development will closely monitor how a tenant group of the Lackawanna Municipal Housing Authority spends a $211,080 grant, following an internal audit that revealed several unexplained cash withdrawals from the group’s checking account.
The audit, which The Buffalo News reported earlier this week, identified at least 42 unexplained cash withdrawals from the Citizens Bank account of the Baker Homes Tenant Council.
“As a result of such allegations concerning the Baker Homes Tenant Council, HUD will be closely monitoring the use of these funds to ensure that taxpayer monies are being spent appropriately and for their intended purpose,” said Adam Glantz, a HUD spokesman in New York City.
An accountant who reviewed the audit expressed concern about “apparent abuse” and described the numerous debit card withdrawals of small denominations as “signs of fraudulent activities.”
The audit also found that the ATM card was used to buy a $100 ticket to a National Basketball Association playoff game in San Antonio in May, violating HUD regulations for proper use of “tenant participation funds,” which are federal taxpayer dollars passed on to tenant councils through housing authorities.
HUD officials acknowledged in a statement this week that it had received a letter in September from the Lackawanna Public Housing Authority regarding the audit.
The letter was forwarded to HUD’s Inspector General’s Office in Buffalo for review, Glantz said.
While board members of the Baker Homes Tenant Council had access in 2012 and 2013 to about $7,500, HUD recently awarded the council a grant of $211,080 to assist residents with education, job training, job placement, and computer and financial literacy.
“HUD awarded this grant prior to any knowledge of the allegations of financial impropriety,” Glantz said in a statement.
But John Ingram, a Housing Authority resident who has been critical of spending by the leadership of the Baker Homes Tenant Council and sought a copy of the authority’s internal audit under the Freedom of Information Act, said this week that HUD was aware of unexplained spending long before the large grant was announced in late September.
“I just don’t understand HUD,” Ingram said. “They’ve been getting complaints for the last two years.”
Ingram said he did not want to see the grant revoked, but he was pushing for the removal of Baker Homes Tenant Council President David Hardy and other current board members.
“They have no business controlling any type of money,” he said. ‘We need for it to be checked. This cannot be going on.”
Hardy maintained in an interview that the council did nothing wrong and had spent money in accordance with HUD regulations, although he also admitted purchasing the NBA ticket and acknowledged that it was not proper. He said he planned to reimburse the money.
Ingram said he was forwarding the internal audit to the State Attorney General’s Office and the Erie County District Attorney’s Office.