Audit finds city of Dallas misspent $6.6M meant for affordable housing
A federal audit by the HUD office of inspector general found the city of Dallas misspent more than $6.6 million dollars. The office believes the city of Dallas should be required to pay the money back.
The federal audit found everything from missing records to a project approved four years ago that remains an empty lot. Experts say its Dallas' most vulnerable residents who are the biggest losers.
Affordable townhomes at one site in Dallas were approved for land four years ago. Yet, construction on the project hasn't even begun despite nearly $1 million in federal HUD money approved for the project.
It is just one of the many examples outlined in this federal audit that spell out how auditors believe the city misspent more than $6.5 million that was supposed to help build affordable housing in the city.
Daniel Roby is the CEO of the Austin Street Center. He’s concerned about the audit’s findings.
“The people getting lost, in the meantime, are our most vulnerable citizens. Nearly 25 percent of people who are homeless are currently employed. These are hardworking people who go to work every day like you and I do,” he said. “It's terrifying. Dallas needs a well-organized city hall. It needs developers who have executed well on these types of projects and have the reputation to see these projects all the way through both the financial and construction side.”
The microscope on how Dallas was spending HUD money first began after the city's own auditor found poor record keeping of how $30 million in HUD money was spent.
FOX 4 asked to see the city's records in 2017 and viewed six boxes of records at city hall, finding much of HUD's required documentation, like final inspection reports, missing.
This federal audit examined how Dallas oversaw HUD money the city awarded to non-profit organizations called community housing development organizations. They're known as CHDOs for short.
The audit is highly critical of the city saying it, “did not exercise due diligence, ignored HUD's requirements and spent $60,000 on projects before the CHDOs incurred eligible expenses.”
On top of poor documentation for how CHDO's spent HUD money, the audit found that the city could not locate the entire project file for Citywide's Serenity Place apartments project during the audit. The project received $1.95 million in HUD money.
Roby says he just wants to have confidence that every dollar given to Dallas for affordable housing is used for that purpose.
“The development of housing units in Dallas have been almost completely in the luxury apartment area,” Roby said. “Those in poverty, all they've seen are their rents increase and housing not improve.”
The city manager declined to talk to FOX 4 about the audit. The head of economic development did release a memo to the mayor and city council about the findings. The memo says the city is working with HUD to resolve the findings and reduce or eliminate potential repayments.