Feds demand $1 million repayment from Miami Beach in affordable housing battle

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Rendering-of-Princeton-Park
Rendering of Princeton Park, an affordable housing complex in South-Dade (Housing Trust Group)

Miami Beach city manager Jimmy Morales has announced that the federal government is asserting the city has misused funds from the U.S. Department of Housing and Urban Development (HUD) and is now demanding a repayment of $1 million.

He said that the city has already asked the HUD whether it could pay back the misspent funds by requesting less in the future. The HUD has not yet responded but Morales is not optimistic about receiving an approval.

In a letter written by Morales to the city commission, he said that after the HUD’s Office of the Inspector General (OIG) conducted an audit, it found that Miami Beach “did not ensure that it charged supported and eligible expenditures to the programs and lacked due diligence when supporting and approving expenditures.”

The OIG’s report showed that funds for the HOME Investment Partnership Program and the Community Development Block-Grant (CDBG) were misspent.

According to Morales, the funds were handled by the Miami Beach Community Development Corporation (CDC), which practiced poor recordkeeping. Years before the current city manager took over his office, the agency already had careless employees and potentially dishonest administrators. Morales said he has tried to fix the agency over the past four years, but previous actions committed by its employees and administrators would still cost taxpayers millions.

“As a result of this extensive review, OIG discovered considerable shortcomings in the city’s HOME and CDBG programs as previously administered,” Morales stated in the letter. “It should be emphasized that the program failures identified in the reports occurred during the previous administration.”

Morales came to office in April 2013, only after the previous city manager Jorge Gonzalez was booted amid multiple corruption investigations. Gonzales, however, was never implicated in any corruption case.