Investigation: Throwback Thursday – HUD Approved Duplicate Payments, Nonexistent Loans
By Adam Andrzejewski
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Investigation by Adam Andrzejewski originally published by RealClearInvestigations.com and RealClearWire.com
In 1983, the Department of Housing and Urban Development wasted $1.2 million – $3.7 million in 2023 dollars – thanks to gross mismanagement that included duplicate payments, making loan payments on non-existent loans, and paying excessive management fees.
Senator William Proxmire, a Democrat from Wisconsin, awarded HUD his Golden Fleece Award for its horrendous financial mismanagement in multiple areas.
According to Proxmire, HUD had contracts with various properties to rent out housing at a subsidized cost to low-income people, with HUD paying a portion of the rent for the renter. Taxpayers covered about 75% of the rent for these units.
Unfortunately, HUD administrators barely looked at the proposals, resulting in poor oversight and plenty of financial mismanagement.
In one case, HUD double counted the cost of a guard service, which added $161,000 to a project. In another, HUD approved a ground maintenance proposal to spend $60,000, despite the work only costing $49,000.
HUD also mismanaged loan approvals. Once, it allowed a rent increase to pay for a $336,000 mortgage, but the mortgage taken out was much lower at $276,000, meaning the rent should ultimately have been raised by less than what was approved.
Property management fees also haunted HUD, with the agency routinely paying about double what its own criteria says it should, costing an extra $95,000 per year.
This reckless mismanagement hurt taxpayers and low income renters, and could have been completely avoided had bureaucrats given appropriate oversight to the agency’s projects.
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By Adam Andrzejewski – The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
This article was originally published by RealClearInvestigations and made available via RealClearWire.