HUD cites Empowerment Zone

Nov 4, 1998 at 12:00 am

Inadequate control over spending and inaccurate reporting. These are some of the major problems cited in the first audit of the Detroit Empowerment Zone released last week by the Office of Inspector General for the Department of Housing and Urban Development.

Between March and August, HUD auditors reviewed 10 of Detroit's 73 EZ programs, in the $100 million federal program begun nearly four years ago to rebuild Detroit's most impoverished neighborhoods.

Roger Niesen, assistant inspector general for the office of audit, says that the inaccurate reports involving all 10 programs indicate that there may be reporting problems with the other 63 activities HUD did not review.

"All you can do is look at what we found," says Niesen. "Since every one had reporting problems it is probably the same situation with the others."

EZDC (Empowerment Zone Development Cooperation) Executive Director Denise Gray and the Mayor Dennis Archer's office did not return Metro Times' phone calls.

Inaccuracies cited by HUD auditors include:

* The money generated by the EZ funds was closer to $2.5 billion than to the roughly $3 billion stated.

* A non-EZ program was reported as an EZ program. This means that the activity, which generated $8.9 million and resulted in 40 individuals getting jobs, had nothing to do with the EZ efforts though the report said it did.

* Seven of the 10 EZ programs were reported as having performed better or worse than they actually did. One program was reported as benefiting 6,000 people when it in fact only helped 2,064.

* Eight of the 10 programs were said to have used a total of $23.3 million in EZ funds and other public money when only $8.9 million was spent, indicating the program is moving more slowly than officials said.

According to the report, the EZDC, which the city created to oversee the zone, "did not perform on-site monitoring reviews or verify the accuracy of the information" it was provided.

Niesen says EZDC officials have assured HUD that reports will be accurately completed in the future. They are to conduct on-site monitoring and verify the accuracy of the information before submitting it to HUD.

He says that audits of the other nine cities around the county awarded EZ money also showed inaccurate reporting.

"The reporting inaccuracy is pretty much all over," says Niesen.

The inspector general's report can be downloaded by following links from Reading the file requires a free Adobe Acrobat Reader, and you will be directed to download the reader if you try to download the report without one.