Niagara Gazette

Local News

July 16, 2014

Audit finds Niagara Falls Housing Authority overspent $1.5M on HOPE VI

Niagara Gazette — The U.S. Housing and Urban Development's Office of Inspector General recommends the Niagara Falls Housing Authority reimburse the U.S. Treasury for more than $1.5 million in HOPE VI funds drawn in excess of need to cover expenditures for a North End housing development project.

An audit, released last week by the inspector general's office, found that authority officials "did not always administer" federal grants related to the HOPE VI project in a manner consistent with HUD requirements. 

Specifically, authority officials drew more funds from a line of credit offered by the federal agency than were needed to cover project expenditures, according to the report.

"As a result, more than $1 million in phase 1 HOPE VI funds drawn was not applied to project expenditures," the audit reads. "In addition, the authority earned $26,785 in accrued interest on these funds through February 2014, which should be returned to the U.S. Treasury. Further, Authority officials drew $403,324 more in HOPE VI funds than was needed to meet its share of the development costs for phase II."

Authority officials maintain they followed all program guidelines, including those related to funding, during the project's development. They also said they are working with the HUD office in Washington, D.C. to resolve the matter.

Stephanie Cowart, the authority's executive director, said HOPE VI grants were administered under close supervision of HUD officials from the Buffalo and Washington, D.C. offices.

"The Niagara Falls Housing Authority followed all HUD requirements to the letter of the law," she said.

Cowart said the project was a complex, mixed-funding project and the authority has been communicating with HUD officials to address the concerns raised in the audit.

HUD officials did not respond to a call placed to the Washington, D.C. office Wednesday afternoon.

HUD awarded the Falls housing authority with $20 million in HOPE VI grant funds in September 2006. The money was used to demolish the 134-unit Center Court housing development in the city's north end and replace it with new housing units.

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