Sun Sentinel
May 11, 2010

Federal inspectors to review Deerfield Beach's community development block grant program
Six-week analysis will determine if audit is needed

By Linda Trischitta

DEERFIELD BEACH

A federal survey of the Deerfield Beach Community Development Block Grant program is set to begin Wednesday.

Neither the U.S. Dept. of Housing and Urban Development's regional inspector nor the department's Washington, D.C., spokesman would say whether this survey is part of routine reviews by the federal government or whether it was triggered by an audit recently performed for the city.

The block grant program was already under scrutiny by city officials. It assists low income residents with housing rehabilitation, counseling and economic development.

The block grant program was reviewed by HUD in 2008, Deerfield Beach spokeswoman Rami Altherr Musto said. It is a segment of the Community Development Division, which will receive $742,692 from HUD this fiscal year, she said.

After a four- to six-week review of the program, HUD's regional inspector general will decide if a full audit is needed.

The HUD inspectors are not from its criminal investigation staff, sources said.

According to correspondence sent to the city from HUD, inspectors will review prior audits, general ledgers; payments; grant agreements and purchasing procedures from Oct. 1, 2008, through April 31, 2010.

In February, the city hired Kessler International to audit the Community Development Division. Kessler's first review of the division and some participants in its programs alleged "significant internal control breaches" and "suspected fraud."

After the first Kessler report was delivered to Deerfield officials on April 20, the city placed two CDD employees on paid administrative leave and dismissed three volunteers from city boards whose nonprofit groups were named in the report.

No criminal charges have been filed, though the state attorney received a copy of the first Kessler audit.

On May 4, city commissioners ordered a second forensic audit from the company that will analyze some of the same CDD operations that federal inspectors plan to review.

Linda Trischitta can be reached at ltrischitta@SunSentinel.com or 954-356-4233.