The Daily Item, Sunbury, PA

December 19, 2013

HUD tightens rules in wake of Point Twp. grant problem

By Rick Dandes
The Daily Item

LEWISBURG — PHILADELPHIA — The federal agency that disperses both housing and community development grants to Pennsylvania now will require a much greater level of oversight and documentation when it hands out money — this, as a result of a botched grant program for low- and moderate-income housing in Point Township, Northumberland County.

The township originally received a $318,000 HOME grant in 2004 for building a 16-unit housing complex called Kingspointe. Fourteen units were to be sold to low- and moderate-income buyers in the Home Investment Partnership, or HOME, program.

The project ultimately failed to meet affordability requirements, the U.S. Department of Housing and Urban Development, said, and it wanted its money back.

The state Department of Community and Economic Development originally ordered Point Township to repay the money because it was felt that municipal officials failed to adequately document how the Yoder Group, of Turbotville — which was hired to construct the homes — spent the grant. That matter was seemingly cleared up to DCED’s satisfaction, but HUD still had questions.

It now appears that the Yoder Group is in consultation with township officials, HUD and DCED administrators about who will reimburse HUD for the $318,000, and when.

Meanwhile, HUD drafted a Nov. 8 letter to Nadab Bynum, DCED director, outlining the new procedures in oversight responsibilities when the agency doles out grant money. That letter was obtained by Point Township resident Mark Heintzelman, who made a Right to Know request for information about the monitoring of the HOME grant money.

Heintzelman released the letter Wednesday.

In the letter, DCED is told that in the future, “For all HOME grants, DCED will require all home buyers and rental projects involving developers to submit a draft copy of the developer’s agreement with the application.”

If  that application is approved, HUD said, the sub-grantee, which in this case, for example, was Point Township, will not be permitted to set the project up until DCED receives a signed copy of the agreement.

A second requirement is a revised review process.

HUD will require DCED to provide full supporting documentation for all HOME and Community Development Block Grant funding. “Reviewing this process, DCED will require that all draws be approved by DCED prior to the sub-grantee drawing funds through the agency’s Integrated Disbursement & Information System,” according to the letter.

Further, DCED will require that sub-grantees submit an invoice for approval to DCED.

DCED then will be required to conduct a preliminary review of all invoices to assure compliance with contract time frames, consistency with contract budgets and that the costs are certified.

Attempts to reach Bynum on Thursday were unsuccessful.