Accounting Issues Persist for John Hope … and, Far Worse, for Government

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The impression about financial irregularities at the John Hope Settlement House has been that all of that took place years ago. Well, yes, it did. But now the problem seems to be that the organization cannot demonstrate to HUD’s satisfaction that it has taken sufficient corrective action to prevent a repeat.

[Providence Director of Community Development Brian] Hull said the Department of Community Development was troubled that audits of John Hope’s books showed shortcomings in 15 areas, such as monitoring payroll, tracking cash receipts and payables, loans to employees without a loan policy in place, late debt payments and a lack of documentation in numerous other areas. The city sought guidance from HUD’s New England area office and the agency, which finances the CDBG program, told the city not to give John Hope the grants “at this time.”

“We note that the entity responded to many of the auditor’s concerns but no evidence was provided to support whether the discussed corrective actions were verified or whether the corrective action taken resolved the deficiencies,” New England HUD Director Robert Shumeyko wrote.

In light of that, it was prudent for the city of Providence (at the recommendation of HUD) and the state to pull back on grants to the organization, though apparently the organization can re-apply if it can show it has come in compliance with HUD’s accounting requirements.

The bigger issue here is that, whether it is social programs or corporate welfare or community grants, government has an obligation to keep tabs on the tax dollars it hands out and make sure that they are not abused. (We are stipulating for a moment the worthiness of the expenditure. The John Hope Settlement House is, for example; corporate welfare is not.) While the Gallison scandal has compelled the state and the city of Providence to start checking into grants as with the John Hope Settlement House and others, little is done to prevent waste and abuse in other programs – the aforementioned social programs, for example – where far larger amounts go out the door. It’s simple. If our elected officials lack the resources or inclination to properly oversee the tax dollars they hand out, they need to stop doing so.



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